Residential Real Estate Closing Procedures
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The purchase or sale of residential real estate has, over the past few years, become very complicated. With attorney modifications, professional inspections and all types of notifications necessary as a result of mortgage contingencies, home to close and home to sell contingencies, it is necessary to have an experienced lawyer who has dealt with these issues.
You will need an experienced attorney to negotiate the various stages that occur from the sale of the home up to and including the closing.
Sale of a Home Without a Real Estate Broker
A number of people have decided that they want attempt to sell their homes by themselves. This allows them to save the cost of a realtor. Our office can assist you by providing you with a real estate contract that incorporates all the terms necessary to protect your interest in a real estate sale. In order to complete a real estate contract we will need the following information:
- Seller’s name and address;
- Property address;
- Purchaser’s name and address;
- Purchase price;
- Earnest money, that is the money that is tendered to a Seller to verify that there is a real estate contract for the property;
- Down payment amount, that is the amount that you will be paying at closing less the earnest money and any mortgage for the property;
- The amount of the mortgage that will be applied for;
- Closing date; and
- Possession date.
- Permanent Real Estate Index Number (optional).
Once we have received this information we can then draft a proposed real estate contract that becomes operational when both parties agree to the terms and evidence that agreement by signing the real estate contract. The Purchaser then tenders the earnest money to the Seller or the person designated in the real estate contract.
Earnest Money
The earnest money is usually held by the Seller’s attorney or the listing realtor. Earnest money is the consideration necessary to bind the parties to the Real Estate Contract. The amount of earnest money varies with each contract. It is not unusual for the seller to request a substantial sum, usually 5-10% of the purchase price, as earnest money. It is customary for the earnest money to be around $3,500.00-$5,000.00.
Seller’s Attorney
When representing the Seller our office provides the following services:
- Review the actual real estate contract and suggests attorney modifications, if applicable;
- Respond to the attorney modifications of the Purchaser’s attorney, after consultation with the Seller;
- Negotiate items on the list received from the Purchaser as a result of the professional inspection of the property;
- Order a title commitment for the property and make arrangements to clear the title to the property including but not limited to the following: Ordering pay-off letters from mortgage lenders; obtaining certificates of redemption on any unpaid real estate taxes; obtaining releases of federal and state liens, if necessary; obtaining the appropriate condominium assessment letters and transfer stamps, if applicable;
- Preparing all documents necessary to transfer the property from the Seller to the Purchaser, including but not limited to warranty deeds, bill of sale, affidavits of title, letters of directions to a land trust (if applicable) and the Seller’s transfer tax declarations with the state, county a nd municipality;
- Prepare Seller’s closing statement detailing the gross proceeds less all of the expenses of the closing to determine the net figure that the Seller will receive as a result of the closing;
- Attend the closing and deal with whatever may arise as a result of the final inspection of the property or any other of a number of issues that could arise at a closing.
Buyer or Purchaser’s Attorney
When our office represents the Purchaser of property we perform the following functions:
- Draft a real estate contract (if a realtor is not involved);
- Review the real estate contract and suggest modifications to the Seller including but not limited to the appropriate real estate tax proration based on the assessments for the property;
- Different forms of notification;
- Obtaining the condominium documents required by law and necessary for a bank to loan money on condominiums or planned unit developments;
- Request information relating to special assessments and/or zoning problems;
- Review the professional inspection report obtained by the Purchaser and forwarding notification to the Seller’s attorney of those items on the inspection list that either need to be corrected or for which the purchaser will accept a credit at closing;
- Review the title commitment to determine that the person that is the seller is actually the person who holds title to the property or the beneficial interest in the property and has the power to convey the property to the purchaser;
- Deal with any problems pre-closing with the Purchaser’s lender in order to alleviate any potential problems;
- Draft and send the appropriate notification letters in case there is a need for an extension as to the mortgage contingency, the home to sell contingency or the home to close contingency;
- Write the appropriate letter, if necessary, to cancel the contract based on a failure of any of the contingencies in the contract including but not limited to the professional inspection, attorney modification, mortgage contingency, home to sell contingency and home to close contingency;
- Review all paperwork involved in the initial purchase of the property including but not limited the real estate contract, the disclosure statements necessary and any other agreements that are ancillary to the purchase agreement;
- Obtain closing figure from the Seller’s attorney and/or the title company;
- Attend the closing and deal with all matters that can arise as a result of a closing including final inspection items and any items necessary to effectuate the closing.
Closing the Deal
Our office has working relationships with Chicago Title and Trust Company (the largest title company in the United States) and Attorney’s Title Guaranty Fund to insure that your closing experience will be as efficient and as competently handled as possible.
Our firm represents people throughout the northwest suburbs of Chicago, Illinois, including Arlington Heights, Palatine, Mt. Prospect, Schaumburg, Streamwood, Inverness, Hanover Park, Lake Zurich, and Deerfield.
To schedule a free initial consultation with a trusted residential real estate attorney, email us or call us at 1-800-835-4202.
