Type: Process Essays
Sample donated: Don Dunn
Last updated: September 23, 2019
Closings in IllinoisHaving a home in Chicago Illinois is what most people desire.Upon searching for the right one and agreeing on the said price, the finalprocess of purchasing is the closing process. Closings usually occur when apotential homeowner signs the necessary documents that make the house your own.
Nonetheless, the process normally entails a list of thingsthat have to happen. The closing processinvolves a series of steps.Open an escrow accountIt is an account that is held by a third party on behalf ofthe two parties involved in the home purchase transaction. Since a lot has tohappen to complete a house sale, having a third party will prevent a potentialbuyer and the seller from rip-offs.
The thirdparty is usually neutral and thus can hold documents and money involved in thetransaction process until the process is complete.Have a title search and get the title insuranceObtaining a title search and title insurance provides alegal safeguard, meaning that no other person can claim your property later. A titleofficer performs the title search to ensure that the title has no clouds orquestions that may deem the property unsafe to purchase.
If there are issuesthat can invalidate the sale, they will have to be resolved before housebecomes yours.Get an attorneyIf a person wishes to get a legal opinion on the closingdocuments, having an attorney is one requirement. Because most individuals, bethey well educated, usually never have a complete understanding of theirclosing documents; a real estate attorney will understand and know where thereare potential errors in the documents.Pre-approval of amortgageGetting pre-approved is an optional requirement when closinga deal. Nonetheless, it can help a person close the deal way faster. It is because being pre-approved will show the sellerthat the buyer has a strong financial backing; this gives the buyer bargainingpower when transacting. Furthermore, being pre-approved can make lenders offera rate lock, meaning you can easily get an interest rate for loans. Such loanswill not be affected by an increase in interest rates before the purchase iscomplete.
Negotiate your closing costsHaving an escrow account does not come free. Fees that anindividual can expect include application review fees, administrative fees,processing fees, appraisal review fees, email, and processing fees. In addition,the person must consider the attorney fees. The person should also make sure toeliminate junk fees. These junk fees may occur when a company tries to takeadvantage of a client because he or shehas no knowledge of the closing process. A brief research of the procedure isthus necessary.Complete a home inspectionEven though it is not a requirement, not having one will bea stupid move.
If you identify problems in the home when inspecting, you caneasily back out of the deal or ask the seller to rectify or pay you to have itrectified. This will, however, apply if a home inspection contingency isincluded in the purchase offer.Pest inspectionSuch inspection is different from the home inspection. A pestinfection will involve a specialist, who will determine if the house has wooddestroying pests. Such inspections are necessary because a small infestationmay spread and become damaging and costly to fix.
The inspection issues must beresolved before closing. In fact, mortgage companies will require that suchproblems be fixed before closings. Costs associated with closing can be coveredby the buyer (if reasonable) or by the seller if they are capable of paying.
Renegotiating of the offerDuring the closing process, even if the buyer’s offer has been accepted, if inspectionsshow problems, a person can renegotiate. A purchase price renegotiation willreflect any costs that the buyer might incur to fix the problems. A person canalso get the seller to incur the costs of any repairs and keep the purchaseprice as it was.It is therefore important to understand the purchasecontract before closing.
Lock the interest rate.A good lender will closely follow interest rates and advice youto lock them when they are at a low. You canalso watch the rates.Nonetheless, the unpredictability of interest rates mayrequire a person, to settle at reasonable interest rates and furthermore, onethat they can afford. Never rush to hit the lowest point.Eliminate contingenciesUpon drawing up a good purchase offer with the help of a real estate lawyer or agent,the offer must be contingent on thefollowing,· Get financing at interest rates that you canafford· Home inspections that are devoid of any problems· The seller sharing any problems with theproperty· Pest inspection not showing major issues ordestruction of the property· The seller carrying out all agreed repairsIn a closing process, such contingencies must be eliminatedin writing, by specific dates, which must be stated in the purchase offerbefore closing. However, some contingencies may be passively approved in thepurchase offer if a person fails to lay claims before their stated deadlines.Escrow fundingDepositing the earnest money when signing the purchase agreementwill signal the seller that you are true to your intentions.
Upon deposit, theseller takes the property out of the market. However, when the person backs outof the deal, the earnest money goes to the sellerand if they back out, the money goes back to the buyer.To finalize a purchase, one will have to deposit additionalfunds into escrow.
The initial deposit isapplied towards the down payment; thus, the person will have to submit theremaining down payment and pay the closing costs. However, it will only applyif the seller will not pay for them.Counter check thepropertyYou should go through the home one last time before signingthe closing papers. Ensure that there are no damages and everything that is inthe purchase agreement is there.Sign the closing papersIt is one of the most important steps of closing. Make surethat you read all the pages carefully, ensuring that the interest rate iscorrect and there is no prepayment penalty. Compare the closing expense toestimates obtained at the start of the process. In most cases, your real estateattorney will be in charge of supervising the execution of the necessarydocuments before closing.
Even though the closingproperty is exciting, there exist many legal issues in real estate transactions.Both the buyer and the seller will benefit from having real estate lawyers, asthey will take them through the entire closing process and the legalimplications thereof.