After all the back-and-forth on price and haggling over concessions
and repairs, it’s finally over and your offer to purchase the home was
accepted.
Now, the real work begins.
Granted, you and the seller are no longer front and center on the home purchase stage; there are some details you’ll need to attend to after the offer is accepted.
For the most part, however, this is the point where real estate Chicago Land agents really earn their money and a good one proves that he or she is worth every penny.
Once you sign the purchase agreement and hand it to your agent, he or she will return to the office, check it over for accuracy and ensure signatures and initials are in the proper places and then get going on all the time-sensitive duties.
Escrow Opens
Quite simply, escrow describes a holding of funds or other items by a neutral third party to a transaction until they are distributed according to the principal parties’ instructions.
In the typical Chicago residential real estate transaction, the principals include the seller, buyer and lender.
To open escrow, the agent or her transaction coordinator calls the escrow officer, typically employed by an escrow or title company, to arrange delivery of the purchase agreement and your good faith deposit (Earnest Money Check).
This is the point at which the clock begins ticking toward the closing date specified in the purchase agreement.
By the way, not all states use escrow. In non-escrow states, a real estate attorney handles these duties.
The Home Inspection
You’ll order a home inspection (we have a number of partners we can set you up with). Take your time when reviewing the inspector’s report and get all of your questions answered. We’ll be with you every step of the way.
Any adverse conditions revealed in this report, which may require repairs, will have to be negotiated with the seller.
Title Company
Next, a title search will be ordered. This is, in a nutshell, a search of the home’s chain of title (from the present owner back to the original owner).
The title company is looking for any problems with the home’s title, now or in the past. An example would be a lien against the property, or an additional loan against it.
The title company will issue what is known as a Preliminary Title Report and deliver it to the escrow holder.
It’s up to the seller, however, to clear any problems. If he or she can’t or won’t, you can cancel your agreement to purchase the property.
Appraisal and Loan Process
While all of the above is happening, your lender will send out an appraiser to determine the value of the home and begin processing your loan.
It’s important to return your lender’s phone calls as soon as possible.
Contingency Removal
While all of the above is happening on your behalf, without your involvement (other than to review the Preliminary Title Report and the home inspection and sign off on them), the next step in the process requires your involvement.
It’s time to remove the contingencies in the purchase agreement. Contingencies are events that must occur, according to the date listed in the contract, before the sale can close. Typical contingencies include:
- Final loan approval – failure to obtain a loan will kill the deal.
- Inspections – repair issue that arise from the home inspection are typically open to negotiation between the sellers. If the seller refuses to remedy any concerns you have the right to cancel the contract with the full return of your earnest money deposit.
- The successful sale of your current home (if you had one).
- Appraisal – if the home fails to appraise for the amount you are borrowing from the lender you can negotiate with the seller for a lower price, pay a larger down payment or walk away from the sale.
Once the contract contingencies are removed you can still walk away from the deal but you will forfeit your earnest money deposit and possibly be liable for damages if your contract includes such a clause.
Just two more steps and we’ll be at the closing table!
Homeowners Insurance
If you haven’t yet shopped for homeowners insurance, it’s time now to take care of it. Ask friends and family which broker they use, if they’re happy with the price they pay and the service they receive.
Final Walk Through
You have one final chance to walk through the home to ensure that it is in the same condition (or better) as when you agreed to purchase it.
This is when we ascertain that all the agreed-upon repairs were performed and that no damage was done to the home during the seller’s move.
We’ll be there with you.
Closing
At closing you’ll sign a mountain of paperwork, but when all is said and done, you’ll be a homeowner.
Congratulations!
