|Penthouse rooftop patio of my SOLD 451 W Huron listing|
I've posted these Chicago Real Estate Purchase Steps in varying forms over the years but I believe the message bears repeating. The buy and sell transaction process is handled a little differently here than in other areas of the country (or even in the state of Illinois). For example, it is important that a real estate attorney is retained for the title work as well as the actual 'closing' of the property, i.e., explaining the loan and deed documents and making sure that all the required paperwork is signed and dated correctly. Title companies in Chicago rarely 'conduct' the final escrow activities other than to provide 'instructions' to all parties, collect and distribute checks, and forward on all documents to their respective institutions (lender, Cook County Recorder of Deeds, current lien holders, etc) after signatures. Most attorneys, however, are not involved in the initial contract negotiation. They generally step in after the offer is accepted, right before the Attorney Review/Modification period begins. They are free to amend whatever is legally necessary at that juncture. (See Step 10 below.)
But before all of that, a dozen or so other events must occur in a fairly specific timeline. I think we all know that the initial stages of 'pre-purchasing' occurs on-line these days. Generally the consumer 'Googles' a few broad housing terms before finding a real estate web site they like and begin 'drilling down' to a specific property type in a specific Chicago neighborhood. For this reason, my list starts once you're ready to actually start looking in person.
Also, you must know--and be prepared for--the whole 'earnest money' aspect of submitting or accepting an offer in Chicago. While earnest money is not technically required in a real estate offer, good luck trying to buy something around here without it. Anywhere from $1,000 to $5,000 'initial earnest money' is expected once an offer is 'accepted' followed by an additional 5-10% of the purchase price after Attorney Review is complete. Personal checks are generally acceptable unless the closing is scheduled before funds can clear.
Finally, a few rules of thumb to consider when making or accepting an offer: 30 days and under is considered a 'quick' close; 45-60 days, 'usual & customary' length of time to close; 60 days or lmore, a 'long' close. So, without further adieu, the following are 23 necessary steps you will need to take before popping the champagne on your new balcony:
1) Initial Consultation (Screen / Interview Buyers Agents)
2) Mortgage Pre-Approval & Letter
3) View Prospective Homes / Identify a Property
4) Present Purchase Contract To Listing Agent
5) Initial Earnest Money ($1,000---$10,000 Made Out To Listing Office / Attorney Trust Account / Title Company)
6) Negotiate Offer (Counteroffer, Price, Terms, Close Date)
7) Acceptance Of Offer by Seller (Agreement) / Final Signatures And Initials On Original Contract
8) Contact, Fax Documents To Attorneys, Lenders, etc.
9) Contingency Periods Begin (Mortgage, Home Close, etc--Usually 30-90 Days from Accepted Offer)
10) Attorney Period Begins (Usually 5-10 Business Days From Accepted Offer) / Modify Contract/ Acquire Budget And By-Laws (Condominium)
11) Professional Home Inspection
12) Both Attorneys' Approval on Modified Contract (5-10 Business Days After Acceptance) / Appraisal Ordered (Lender)
13) Balance of Earnest Money, if Required, Due to Listing Office / Attorney Trust Account / Title Company
14) Await Appraisal (Lender)
15) Loan Commitment After Contingency Period Ends (Usually 30 Days From Acceptance)
16) Acquire Homeowners Insurance Policy
17) Interview With Condo/Co-Op Board (Usually In High rise Buildings)
18) Await Closing (UP TO 9 MONTHS IF A SHORT SALE)
19) Transfer Utilities & Change Of Address / Schedule Movers
20) Estimate Of Funds Needed At Closing (Good Faith From Lender including $7.50 per $1,000 City Transfer Stamp to be paid by Buyer)
21) Final Walk Through Or Punch List (New Construction)
22) Closing (Usually 30-90 Days From Signed Acceptance Of Contract By The Seller / UP TO 9 MONTHS IF A SHORT SALE)
23) Celebrate! You're A Home Owner!!!
Simple huh? Perhaps, but having a Realtor experienced in contract negotiation is a big plus in Chicago's high dollar market. 'Broker Reciprocity' allows for all of us brokers (or at least those of us who actually built and maintain websites) to share each others listings with the general public so anyone can find a property they like on their own. The transparent nature of the industry, with its thousands reciprocal of web sites, allows for this, anymore. Successfully executing a contract, however, requires great experience. There are several links to my GenoPetro.House search engine on this page and throughout my blog.
Reach out to me at any time or simply Google 'Geno Petro' for everything else in the property buying and selling universe there is to know about me. There's never a fee for my buy-side representation and my listing (sell-side) fees are aggressively competitive with my peers. Laid back, no pressure advocacy is my hallmark.