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Purchasing a home can be a very difficult and emotional endeavor. There are so many factors that come into play and so many decisions that have to be made.
The team members that are involved in purchasing a home are numerous. You need to select and have a really good real estate agent. Your agent is the quarterback of the team to make sure your deal closes without any delays, unexpected items or headaches.
You’ll need a good need a good mortgage broker to pre-qualify you for your intended mortgage and an attorney.
Once you identifying the property and securing a contract to purchase the property. It’s so important to then have a good inspector to make sure everything that has been represented is true and there’s no deficits or problems with the home.
At this point you need to pursue a mortgage which is going to require all of your financials for the last several years. Your mortgage broker that prequalified you will be instrumental getting you approved for your loan. Congratulations you have been approved.
Just before closing we will do our final walk-through.
Next comes the title company and of course the title officer that will handle the closing and provide all of the documents including a closing statement which will show exactly what our costs and credits will be.
The last step is we receiving your keys.
Below we are going to go into much more detail and explain all of the steps to successfully fulfill the process to purchase your new home.
Hiring a very good experienced Realtor to represent you is the most important decision you will make (other than the house) when buying a property in Chicago. The right Realtor will smooth the process, and how it costs you nothing as a buyer. But trust us, this is the important first step. The right expert will ensure you have every bit of information at your fingertips as you begin your search, and steer you through every possible aspect of the property purchase process.
The other key step in buying a home is of course having financing in place if you need it. Before you start your property hunt in earnest it’s a really good idea to get pre-approved for a mortgage, just in case you see something you really like. Without pre-approval you’ll most certainly not be the seller’s first choice should there be several offers, and you won’t really know for sure that you can even afford the property, or get a mortgage.
Please note: pre-qualified is not the same thing as pre-approved. Pre-qualified means you’ve given a lender your income details and financial commitments and they’ve estimated what you can afford. Pre-approved means they’ve actually checked your credit report, and your debt to income ratio, and properly analyzed your financial situation. Once they’ve done this you’re given a pre-approval letter. This can certainly help in sealing the deal when in negotiations with a seller, and indicates there’s a really good chance you will get a mortgage and the sale will go through.
Begin your search. Prices are rising steadily, and the deal you could get today, won’t necessarily be as well priced tomorrow. Your Realtor has access to the MLS (Multiple Listings Service) and will be actively using their expertise to find listings that suit your criteria and lifestyle goals, but you can also get proactive searching online.
The more you look at, the more informed you are about price points and what’s really in your budget. When searching online be prepared to listen to your Realtor’s feedback and advice on neighborhood and streets though, as he or she is the expert on the ground and has the experience to know if something is too good to be true, overpriced, or not the right location for your needs. Your Realtor’s local knowledge will be priceless in assisting you on this part of your journey.
Once you’ve found some listings which may work for you, we highly recommend making the trip to check them out in person. On the ground in Chicago you have the option of attending open houses, or your Realtor can book showing appointments with the listing Realtor on your behalf. If you really can’t make it to Chicago, then it’s even more imperative that your Realtor is of the highest standard and has impeccable local knowledge and market info!
Once you’ve found the right property and read through the Seller’s Disclosure (where the homeowner discloses any known issues with the property) it’s time to make an offer. In Chicago this is done with a formal contract that lays out the specific requirements and terms on the part of the buyer and seller.
Some Realtors may approach the seller’s Realtor first with an oral offer, to see how the other party responds before they take the time to put anything in writing. From our perspective, we strongly encourage all offers to be presented in writing from the beginning. Offers that come in writing are generally more seriously considered by virtue of the fact that the terms are in writing.
Obviously the seller doesn’t have to accept the offer, even if you offer the full price of the listing. And sellers are under no obligation to explain why they reject a particular offer. Usually, we find most buyers hear back with in a day or so, and in most cases the seller will let you know if the offer was too low, which is where the negotiation begins! You can bide your time at this point and gamble on seeing what happens, or increase your offer hoping to secure the property immediately.
The minute you learn your offer has been accepted ranks up there as one of life’s most exciting moments. It is important to keep grounded, however, in the fact that there are still many steps in the due diligence stage which may uncover issues or problems on either side. As with much in life, when it comes to real estate deals, the devil is in the details.
After your offer is accepted, if you haven’t already put down earnest money you will be expected to do so on signing the contract. Always be aware that earnest money could be at risk if the seller does what he or she is required to by contract and you do not.
Depending on how the terms were set out in the contract, usually within the first few days after execution of the contract you’ll put down the remaining deposit for the property. Then it’s time to begin checking off the contingencies set out in your contract, which is where the skill of your Realtor, and the quality of the team he or she’s assembled becomes paramount.
The purchase contract should be drawn up by your Realtor with all the details and signed by you. In many cases, buyers are asked to put up “earnest money” which is a small amount of the deposit, to demonstrate that you are serious about the purchase. Do bear in mind, if your offer is accepted and you then later pull out of the deal without the necessary provisions in the contract, you’ll forfeit that money.
There are two main contracts in Chicago property purchase. The standard contract provides that should problems be found with certain parts of the home during inspection, the seller is obligated to fix them, and there is an allowance for these repairs accounting for up to 1.5% of the house price.
We prefer to work with the alternative “As-is” contract. With this type of contract if the inspection report reveals issues with the house the seller is not obligated to make those repairs. This means the buyer has more flexibility to pull out, should they decide the house is not for them, and this is the only contract which allows the buyer to receive a full refund of the deposit should they be unhappy with anything in the due diligence phase.
You will attend a closing your Realtor and your real estate attorney. You’ll go through and sign all the paperwork, your Realtor or lawyer will check everything is as it should be as you go along. Then funds will be transferred from escrow and you will get your keys. Congratulations, you’re a Chicago homeowner!