Chitownproperty

Buyers commonly request home warranties in today’s market, as a way of squeezing one more concession out of eager sellers. But not every warranty is the same, so you need to read the fine print before assuming that your expenses will be covered for the first year in your new home.

Warranties on existing homes are different than new construction, and usually cover only specified equipment. Also, most existing home warranties only cover repairs, not replacement. In the case of such repairs, much like make auto insurance claims or finding a provider in your healthcare network, you should call the warranty company first to find an approved maintenance contractor.

Warranties typically cost $300 to $500, with the more expensive ones obviously being more comprehensive. If you are interested in purchasing one, just make sure you understand exactly what it covers so you won’t be left holding the bag if something does break after you’ve moved into your new home.

CNN is reporting this year’s list of most profitable home renovation projects. The top two, outdoor siding replacements, may not have much relevance for Chicago buyers in the condo market, but it’s a good option for those with single-family homes. Siding replacements recouped an average of 87-88% of their cost. Window replacements and bathroom remodeling also scored high, rounding out the top five.

The bad news however, is that remodeling costs jumped in 2006 while the amount such jobs added to resale value remained the same. The average kitchen remodel jumped almost 20% this year while returning 80% of that cost. Part of this disparity has to do with the overall decline in housing prices as of late. The trend emphasizes the important point that remodeling jobs should be thought of less as money makers and more as projects done for your own enjoyment, while you still own the home.

If you own real estate or are in the market for a new home, no doubt you’ve paid attention to — and been slightly frightened by — the recent news that median prices and sales numbers have dropped significantly for the first time in years. But as this Tribune editorial by Kenneth Harney points out, a closer look at what the numbers mean reveals a different picture, particularly in Chicago.

First of all, Harney emphasizes, is that in light of the spectacular gains in real estate prices in the past few years, a 1.2 percent decline in the national median price isn’t all that surprising. Secondly, since that number is a national figure, it doesn’t reveal discrepancies in local markets. For instance, the median price of a home in Chicago actually rose 1.7 percent over the last year. That national figure is brought down by larger decreases in areas that saw the greatest investor speculation.

As a home buyer, the second piece of news, falling sales volume, means that you’ll have more homes to choose from as local inventories increase. And for sellers, it means that you need to think about adjusting your asking price, or be willing to wait a little longer to sell. Either way, it’s not the dreaded crash that the most strident critics predicted, rather a return to what we used to call a normal housing market.