If you are buying a home in Chicago, you need to know the steps between going under contract and going to the closing table.
Once both Buyer and Seller have reached a meeting of the minds with regard to all terms, any contract changes have been initialed and the contract has been signed and delivered to both parties a Contract is considered executed. The time between going under contract and the closing varies based on what is negotiated, but customarily real estate closings in Chicago take anywhere from 30 to 60 days.
Time is of the essence when you are under contract.
The clock starts ‘ticking’ once the contract is executed – which means the contract is delivered to the buyer and seller. There is a lot to do on the front end of a contract, so lean into your Realtor for support and referrals.
In Illinois, attorneys are used for real estate closings. Realtors are not licensed to write or interpret the terms in the contract, but we can complete the contract form. If you don’t have an attorney, your Realtor can provide an expert referral for a real estate attorney.
- Deliver Contract and disclosures to an attorney for review.
- Deliver the initial earnest money for deposit as agreed in the contract. Customarily the listing office holds the earnest money, unless othewise agreed. Th initial earnest money ranges from $1,000 to $5,000, depending on the value of the property. This money is part of the down payment and goes toward the purchase price.
- Buyer orders Property Inspection – It is important that the Buyer is present for the inspection. Learn about the Elements of the Home Inspection.
- Buyer applies for a mortgage as soon as possible; lender requires a copy of the purchase agreement.
- Lender orders the appraisal, generally (but necessarily) after the property inspection has been completed.
- If the property is part of an Association, the Seller delivers the homeowners association budgets, declaration, bylaws, and meeting minutes for the Buyer and attorney to review.
- Buyer performs Property Inspection – Discuss with your Realtor and Attorney the problems or defects to the property. Note, if the parties are not able to reach an agreement on modifications to the Contract (i.e. repairs or credits to Buyer), you or your attorney must give written notice to terminate the Contract within the inspection contingency period.
- After the attorney review and inspection period is complete, the Buyer delivers the balance of earnest money. Any earnest money over five thousand dollars will be held in an interest-bearing account until closing and applied to the down payment of the Buyer’s loan.
Preparing for closing
- Buyer obtains homeowner’s insurance; many lenders require a copy of the policy and possibly a receipt at closing.
- Lender issues a loan commitment for the Buyer and Seller’s attorney schedules the time and place of the closing.
- Seller’s attorney delivers the documents for closing including a plat of survey, a title search and insurance policy, a certificate of a paid water bill if part of a homeowners association a paid assessment letter.
- Seller’s attorney delivers title insurance commitment to the Buyer’s Attorney and Lender – This discloses who owns the property, whether or not the taxes have been paid, any outside claims affecting the property.
- Buyers determine how to take title (i.e. joint tenants, tenants in common, or tenants by the entirety.)Both parties submit a change of address notifications and request changes in utility services. in utility services.
- Schedule movers, coordinating with Seller’s move date/time.
- If there is a mortgage on the property, the seller orders a loan payoff letter from their lender.
- Schedule final walk-through – Ideally, the final walk-through will be scheduled within twenty-four hours of closing and the property will be vacant and a minimum of ‘broom clean’. It is important to confirm that items that needed repair have been repaired, items that were to be included are on the premises and the property is in the same condition is as the time it went under contract. Learn more with our Final Walk-Through Checklist
- Buyer’s attorney receives an estimate of closing costs from the lender or title company. Often the estimate is not ready until a few days before closing.
- Buyer will bring the driver’s license/proof of identification, a cashier’s check, or wire funds to the title company. Buyer must attend the closing to sign original mortgage documents.
- Seller brings all keys and garage door openers.
- Once the mortgage underwriter approves loan documents the funds are released to the seller, and the buyer receives the keys! Time to celebrate!