Congratulations on making the decision to purchase property in Chicago! There are several advantages to homeownership, and we are sure that at the end of this exciting process, you will enjoy them all. Above all: HAVE FUN! That's what this is all about!
If you're new to the process, there can be many confusing terms to understand. Here, we will break down the process for you with some helpful tips along the way.
What are your current expenses, and how much money will you have on hand to allocate towards your new investment? How much will you need to be able to comfortably afford a mortgage (if financing your purchase), property taxes, association dues - if purchasing a condominium or in a co-op?
This can be someone in your bank's mortgage department, or a mortgage broker. The key is to find someone with whom you are comfortable discussing financial information. There are mortgage professionals of all kinds out there, so don't be afraid to interview two or three until you've settled on one who can provide a mortgage product that suits your situation.
We can help you with a list of lenders, if you are in the dark on this!
Once you've zeroed in on a mortgage professional, you will want to get a pre-approval letter. Your initial conversation will involve questions about your financial situation, debt, income, etc., and you should be prepared to have some answers. The result of that conversation should be a better understanding of how much house you can afford, and an actual letter from the lender stating that you have been "pre-approved" for a certain loan amount.
This letter is also helpful when it is time to make offers. It can signal to a seller that you are a serious and viable buyer for their property, and that a financial institution is planning on "backing" your purchase.
It's no secret that listings are available to everyone with an internet connection. (That may be why you made it to our website today!)
However, where a professional real estate broker can really add value to your search is in pricing, data analysis, offer strategy, negotiations, and his or her professional network. Think of your broker as your "coach" throughout the process, and also as your localized source for everything else you might need along the way. Got that great new house under contract, and now you need someone to inspect it to make sure that everything works as advertised? Your broker should have a list of professionals you can call. Need an attorney to represent your interests as the transaction moves towards closing? Your broker should be able to help in that department. Need title services? Yep. Broker.
Again - The key in working with a real estate broker is that you want a relationship with someone with whom you're comfortable communicating. This can't be emphasized enough!
In most Illinois real estate transactions, one broker works for the seller and one broker works for the buyer. If you are considering a purchase, it is essential that you choose your OWN real estate broker for representation, in order to avoid "dual agency."
In absolute terms, the buyer's agent is hired by the buyer to inform, negotiate and represent the buyer in the transaction. The buyer pays the agent NOTHING for this representation, and the seller pays all agent commissions.
Even though the buyer's agent is paid for out of the seller's proceeds at the end of a transaction, the buyer's agent at no time represents the seller. The seller's agent is also paid out of the seller's proceeds at the end of the transaction, and at no time represents the buyer.
The fun stuff! Once you've got an idea of who you'd like to work with, talk to your broker about what you'd like to find. Want that 3-bedroom condo in Wicker Park that you've been talking about for the last two years? Are you envisioning a 5-bedroom house in a great school district in North Center? Perhaps you're thinking of investing in a 4-unit building, renting out the units, and operating your new building as it's own business and LLC. Your broker can help you identify suitable properties in all of these departments.
Once you've found "the one" your broker will help you formulate a price offering and negotiation strategy based on current market conditions and the competitive landscape. Your broker will assist in drawing up the offer on the appropriate real estate purchase contract (different property types necessitate different contracts), and then it will be off to the races!
Your broker will take your offer to the listing broker, who will run that offer by the seller. The ensuing communications are a lot like a dance. Usually the seller will come down a little, and the buyer will come up a little, and the process will continue until everyone finds a suitable middle ground. The process can be emotional for first timers, so be prepared!
Once you've successfully put a property under contract, then the clock starts ticking. You have a finite amount of time in which to submit your initial deposit money (called "earnest money" in Illinois), have the property inspected by a licensed property inspector, and have your real estate attorney review and represent you in any contractual changes that need to be made.
In Illinois it is common to have an attorney represent you - along with your real estate broker - once you get a property under contract.
The other VERY IMPORTANT thing to do once you're "under contract" is to let your mortgage professional know that you've successfully negotiated for your target property and that it's time to start the loan application.
Your inspector will go to the new home and check out all of the systems, foundation, roof, appliances, etc., to make sure that everything is in good working order. If you are available it is strongly advised that you attend the inspection. It is a great time to learn about your new purchase! Once the official inspection report is issued, you will be able to either accept the findings, ask for items to be fixed, or ask for additional closing credits based on the newly discovered issues. Your real estate broker and attorney can help you decide how much is enough to ask for, based on the situational context.
Once all of the inspection, attorney review and other contingencies have been satisfied, it will be time to submit the rest of your deposit money (called the "Balance of Earnest Money"). During this time you will be contacted by your lender to sort out any additional information needed en route to obtaining your "clear to close" or official loan commitment. You may also be contacted by a closing agent from a title company with wiring instructions for your down payment, and the time and date information for where your closing will take place.
Finally, the big day: Closing. Closing usually occurs at a title company, but can sometimes occur at an attorney's office. It is meant to be at a 3rd party office, with a 3rd party bank account called an Escrow. All of your purchase money is held there "in escrow" until your attorney and the seller's attorney have walked each party through all of the documentation and paperwork needed in the transaction. REMEMBER TO BRING YOUR PHOTO ID! Once everyone has signed, dotted, crossed, and given the go ahead to "fund" then the purchase money will transfer to the seller, and you will get the keys to your brand new home!
Time to celebrate!
The data relating to real estate for sale on this website comes in part from the Broker Reciprocity program of Midwest Real Estate Data LLC. Real Estate listings held by brokerage firms other than our company are marked with the MRED Broker Reciprocity logo or the Broker Reciprocity thumbnail logo (the MRED logo) and detailed information about them includes the names of the listing brokers. Some properties which appear for sale on this website may subsequently have sold and may no longer be available. The accuracy of all information, regardless of source, including but not limited to square footages and lot sizes, is deemed reliable but not guaranteed and should be personally verified through personal inspection by and/or with the appropriate professionals. The information being provided is for consumers' personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing.
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