Your Questions About Home-Buying in Chicago – Answered!
Buying season is here! Here are the four questions I get most often from people buying a new home:
When should I involve my lawyer?
- As soon as possible. Under the standard Illinois realtor contracts, there is an “attorney review” clause, which means that even after you sign the agreement/offer to purchase, your attorney will have the opportunity to review and negotiate changes to the agreement with the seller’s attorney. However, sometimes the seller and/or their attorney will refuse to budge from the original deal so you want to make sure that conditions you want are included in the contract from the beginning. For example, do you want the seller to replace a broken fixture or include all of the appliances in the sale? Make sure that is in your initial offer. No matter what, ask your realtor to be sure your contract has an “attorney review” provision
What is title insurance?
- Title insurance is there to protect the buyer from any defects in the seller’s ownership For example, say the seller unknowingly received a fraudulent deed when they purchased the property… that could cause problems for you as the buyer down the road if the “true” owner came back and claimed he owned your home. Title insurance is important and your lender will require it.
Do I have to pay for title insurance?
- In Illinois, typically the seller pays for the title insurance. However, in a hot market everything is negotiable and some buyers may offer to pay for it to make their offer more appealing to a seller that is weighing multiple offers.
What is earnest money?
- Earnest money is a portion of your purchase price that one of the real estate brokers will hold in “escrow” during the closing period of your deal. Usually, there is a small amount given at the time of signing the agreement with your realtor and the seller, and after “attorney review” is completed you will pay the balance of the earnest money. As long as the deal goes well, the escrow monies are applied to your closing costs and/or down payment at closing. If you find something during the inspection that makes you want to back out of the deal, or if you are unable to obtain a loan, usually you will get your earnest money back. However, if you are not careful about the deadlines in your contract for cancelling the deal, it is possible that you would lose your earnest money.
It is important to have a real estate attorney involved in your real estate closing from the beginning to monitor important deadlines and provide suggestions to make your position as strong as possible. Good luck and happy house hunting!
These materials have been prepared by Statman, Harris & Eyrich, LLC for informational purposes only and are not legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Internet subscribers and online readers should not act upon this information without seeking professional counsel, as the advice appropriate for your particular circumstances may vary.