Buying a home in the competitive market that is Chicago can be frustrating and overwhelming. Luckily, I have the skills and knowledge to guide you through this process while alleviating stress and worry. Below is a synopsis of the steps in buying a home.
1. Get a pre-approval letter from a lender of your choosing stating what you can afford etc. This is when you discuss job, length of employment, down payment, APRs, rates, fees, etc. They will run your credit as well. At this point they will generate a pre-approval letter with terms which you can send to me. [If You Plan to Purchase all cash, disregard this portion. All you will need is a statement showing you have the liquid funds to purchase the home in your name].
2. I set you up on an MLS search, you mark the ones you are interested in. I set up showings flexible with your schedule, and we go see them. Hopefully we find a few you are interested in.
3. I work on comps (Comparative Market Analysis), making sure you are submitting a fair or below market price when making an offer. Then we sign offer, submit and negotiate…Come to terms that are fair and balanced for you. If you agree, we inform seller… Once seller signs, contract is executed. All contracts work on a 5 business day timeline, unless a certain date is written.
4. Initial Earnest Money is due 2 business days after contract acceptance (usually $1000-$10,000, depending on home price and situation). This will go towards purchase price and sits in escrow. This is also taken out of your down payment with lender. Once submitted you will receive a receipt showing the money is in escrow.
5. I can help you hire an RE Attorney and Inspector. Inspector usually costs around $300+ (depending on size of home) and lawyer usually $500. If you are using a mortgage, attorney fees are usually part of closing costs. I do not get any kickbacks or referrals from any Lender, Attorney or Inspector I use. Everything is above board.
6. Within 5 days of acceptance, we have an inspector go through property and give report to us and lawyer. This inspection can take up to 4 hours, and I highly suggest at least one of the buyers to be there, along with me. This lets the inspector show you any major issues and also gives you a tutorial on how the home works.
7. Attorneys negotiate credits for repairs or seller fixes if there are any, driven by your requests. Adjust price etc with your blessing of course. Keep in mind, we cannot ask for improvements. just fixes or credits for defects (I.E. If the hot water boiler is old and past it’s usable age, but still works, we cannot ask for a new one).
8. Appraisal is performed by your lender at your cost. The property must appraise for the bank to provide funding. Cost is usually +-$500, and is part of the banks fees explained in paragraph 11. If the property doesn’t appraise (rarely happens, since I do full comps), then either seller comes down in price, you make the difference in cash, or contract is terminated and you receive earnest monies back. [If you plan to purchase all cash, disregard this portion, unless you want one performed at your expense].
9. Lawyers sign off and then final earnest Money is Due 2-3 days after attorney approval/ sign-off. (usually $1000-$10,000). NOTE: More recently, buyers are going with just initial earnest money at a higher amount and no final earnest money, meaning less legwork for you getting and sending checks. If there is final earnest money involved, this will go towards purchase price and sits in escrow. Once submitted you will receive a receipt showing the money is in escrow.
10. At this point most of our work is done. Once lawyers sign off, we go into the “underwriting phase”. This is when the bank goes into all your financial details, credit, lines of credit, all of the small details concerning you being able to pay off loan. Be prepared to provide LOTS of information to them (1099s,W2s, income/debt etc). From the start of getting pre-approval letter to close, don’t make any large purchases, take out any lines of credit or lose your job, they will check! [If you plan to purchase all cash, disregard this portion]
11. You will have to pay some taxes and transfer fees to the government, these should not exceed 2% of the purchase price, and I can sometimes make the seller pay for these. These usually include attorney fees, appraisal fees, lender fees, title insurance, deed recording etc. Your attorney and lender can give you rough numbers for these. 2 days before close you should receive a HUD (closing statement) which outlines all details and total costs for the transaction. Attorney will let you know how much money to bring to closing if need be.
12. All goes to plan, we get what is called “clear to close” (usually 30-45 days from contract acceptance if transaction requires lender). We do a final walkthrough to make sure all of the contract obligations are met, seller has made fixes pertaining to inspection findings, and home is in same condition (pending seller fixes) as when we inspected. If a pipe bursts, or home falls down, then we can terminate or have seller fix asap, or provide a home warranty.
13. Closing is scheduled, you sign a lot of paperwork, deed and title are transferred. Once monies have been wired and in correct accounts, you get keys to your new home! On the buy side, you pay me nothing! Pretty cool right!
14. Live happily ever after!