I recently helped an Islamic client complete a “Murabaha” closing. Islam prohibits payment of interest. This makes it difficult (if not impossible) to buy a property using a mortgage.

Devon Bank has a Murabaha program that works quite well. At closing the Buyer assigns the contract to the bank, the seller deeds the property the bank and the bank immediately transfers the house to my Buyer for the original purchase price plus the bank’s “profit.”

There is no reference to interest payments in the loan documents and all of the bank’s profit (interest) is rolled into the loan agreement. The bank sent a representative to the closing to help us all out and it closed easily.

One potential pitfall: There are two deeds in a Murabaha closing. One from Seller to Bank and a second one from Bank to Buyer. If you are closing in a town that has a transfer tax make sure you get an exempt stamp for the second deed.

I just received a letter from the Cook County Assessor telling me that I did NOT need to fill out a homeowner’s exemption packet this year. For years, the county insisted on annually mailing postcards (and in recent years a packet) to every homeowner in the county. Homeowners were forced to sign and return the card in order to qualify for the homeowner’s exempetion for real estate taxes (reducing taxes about $400.00). Needless to say many people overlooked the cards or they were lost in the mail

The county has wisely dispensed with the yearly application. Now you only need to apply for the exemption if you just bought your property.

This change came out of left field. I called the assessor on April 16 and was told the packets were late and would be mailed soon. No one will miss filling out what was really an unnecessary form.

First the boom areas in Chicago were Bucktown and Wicker Park, then Logan Square and Humboldt Park (which is now considered pricey)…now the big, new areas are Englewood and Garfield Park. The Tribune, in an excellent story, reports how these poor areas increasingly are home to 20 and 30 year old real estate bargain hunters. At the same time poorer, longtime residents are being hurt by increasing real estate taxes.

I’m not trying to rain on the parade, but the Chicago Reporter at the beginning of 2003 said that the Harrison, Austin and Marquette police districts on the West Side (that encompass these neghborhoods) represesented less than 1/5 of the city’s population but had 40% of Chicago’s murders.

The Reporter story says jobs and education will change these areas, not extra police (or, for that matter, Costco-trained suburbanites seeking condo bargains).

There is a good web site for current and prospective landlords that gives a lot of decent information including why it’s best use an LLC to hold real estate rental property.

I caution Buyers NOT to obtain a mortgage loan to buy their house over the internet. It may be okay to get an internet loan if you are refinancing, but even then I would be wary.

An internet loan is like a front row seat on the Titanic. I represent a Seller now and his Buyer got (tried to get, is more like it) an internet loan from a broker in New York. The closing has been set and cancelled three times, because the internet lender can’t get it together and doesn’t understand our closing system here in Illinois. Don’t get me wrong, I love the internet, but it doesn’t work in a mortgage loan setting. You need a reputable local mortgage broker for mortgage. Someone that you can talk to and who knows how the system works here.

There is a good survey by bankrate.com that shows the high, low and average closing costs in catergories like “tax service fee” or “application fee.”

Title charges have risen in Illinois in the past few years and Buyers’ title charges are about $1000 now. Add to that, loan fees and other “garbage can” charges (an add-on charge like an “administrative fee” or “funding fee” found on most loans) and most Buyers are at around $2500 for total closing costs these days.

If your house, or a house you inherited, is left vacant, you must be careful and do the unthinkable, that is, read your homeowner’s insurance policy. In handling estates and trusts, frequently the deceased’s home is empty and must be sold. Another circumstance that pops up alot is a client moving out of his house to rehab the house.

Most times you will find that the insurance still covers you, but theft and vandalism are not covered if the house is vacant more than 30 days.

If you are rehabbing your house, and move out, many policies still cover you for everything including theft and vandalism.

Some insurance agents state in a blanket fashion that there is no coverage on an empty home and then try to sell you a policy for $4000 or more per year in premium.

Do yourself a favor and check the terms of your insurance policy. It will give you peace of mind and save some cash.

(Credit to Terry Griffin Esq. for the above)