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An Overview of Escrow
Escrow is the period of time between the parties signing a purchase agreement and when they actually close on the property. Typically, you’ll choose escrow or a title agent to function as intermediary to oversee the process. For example, to prepare a title report and monitor the loan process. This is usually a busy time for the prospective buyer.
By the time the escrow closes, the buyer needs to secure financing and remove any contingencies. In addition, they’ll need to schedule an appraisal and obtain title insurance. Naturally, if the buyer negotiates for contingencies in the contract, then the seller must attend to those matters promptly.
Without a doubt, issues arise frequently that call for negotiating. For instance, who shall pay for repairs that the home inspection calls for? The home buyer might insist that the seller either pays to fix a problem or lower the price. Buyers may have the right to withdraw from a deal if the parties cannot reach an agreement.
A Real Estate Purchase Agreement in the State of Illinois
A legal document, a purchase agreement contains the terms of a real estate transaction. It’s a written document that both parties sign. It includes important details like the offer to buy or sell, the sale price and a property description. The buyer is normally the party that prepares the agreement.
The state of Illinois is what’s known as an attorney-review state. That means that both parties typically have their Real Estate Lawyer Aurora IL review the agreement finalizing it. The purchase agreement states how much time the parties have for the attorney review, which is usually five days. In addition, it will state what occurs if the parties cannot come to an agreement.
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Generally, either side can choose to withdraw from a purchase agreement without risk of penalty within the review period. The attorneys can review the agreement and suggest modifications to any component of it. However, they cannot modify the purchase price or real estate broker’s fees. Lawyers usually propose modifications after a house inspection. For that reason, the review and the inspection frequently happen within that the same time period.
What Occurs at a Typical Residential Real Estate Closing in Illinois
Seller and buyer should fulfill each term in their purchase agreement by the time escrow closes. The closing is usually a meeting of both parties. However, a closing can take place in different locations and at different times.
The buyer and seller then exchange all the necessary funds and documentation. The buyer pays the seller the purchase price. In return, the seller gives the deed to the buyer along with other transfer paperwork and the title. The seller pays any remaining loans on the property and their Realtor’s commission. It’s not a requirement for sellers to attend a closing providing they pay their costs and sign the necessary documents.
Frequently, the buyer signs the finalizing documents at their title company’s office. Subsequently, the title company records the new deed displaying the buyer’s name at a local municipal office. This is when the buyer “officially” takes ownership.
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Illinois state law, in contrast to some other states, does not mandate that property involve a real estate lawyer Aurora IL in a transaction. Still, even if it’s not a requirement, many people choose to engage legal counsel at some stage in the process. For example, to conduct a review of a contract or for assistance with the closing. In other cases, a lawyer’s assistance may be necessary in the event problems develop after the closing.
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Real Estate Agents – Should You Hire One?
It’s not a requirement in the state of Illinois for home sellers to hire a real estate agent or real estate agency. Nevertheless, it’s certainly something that calls for consideration. The state does requires real estate agents to obtain a license. This means they go through training in some of the fundamentals of real estate law in Illinois. (However, they cannot offer legal advice.) They also have access to all the necessary paperwork along with experience in preparing homes for showing. They can schedule photographs and – importantly – market the property to prospective buyers. As offers come in, your real estate agent evaluates them to decide which ones are the best.
With standard real estate agent agreements, the seller agrees to pay the agent’s commission fee. This applies regardless of who secures the buyer. Consequently, even if the seller finds the buyer they still owe a commission fee to the agent.
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A real estate agent represents the seller and must represent their best interests while also complying with state laws. For example, the agent informs the seller of all offers made for the property.
Setting a Sale Price and Listing Your Residential Property
Before they list your home on the market, your agent researches comparable homes that sold recently in your vicinity. Without a doubt, this is essential for gauging market value. Using that analysis, the agent can then recommend a listing price.
Some of the factors your agent considers includes the size of your home and the lot. Upgrades such as new countertops, flooring and new appliances play a part in pricing too. In addition, factors like proximity to area schools, shopping and major roads impact home prices.
Your home’s appropriate listing price isn’t necessarily equal to its market value or what you hope it can bring. For instance, to attract more prospective buyers, you may want to put the listing price lower than market value. On the other hand, setting it at market value may be the right move too. Your real estate agent can apply their knowledge with the market to help you determine pricing.
Disclosing Information About Your Home
In many states, the laws mandate that homeowners must make specific disclosures when selling their home. These may include any type of physical, legal or environmental defects existing within the home or the property. For example, defects such as lead-based paint or materials like asbestos in the home. Other issues like foundational cracks or whether there are boundary line problems with neighbors are also relevant for disclosure.
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Your real estate agent has the disclosure forms you’ll need. Be certain to fill them out accurately. This helps establish confidence among prospective buyers. Also, failure to make proper disclosures can leave a seller vulnerable to lawsuits or penalties.
Prospective buyers then will submit offers on your listing. Generally, this is in the form of a sale contract. It’s a document that covers everything from sale price to closing date. In addition, contracts can feature conditions such as the buyer securing a mortgage before the deal closes. The sale contract becomes binding when the seller signs onto it.
Typically, sellers do not accept the buyer’s initial offer. They may make a counteroffer, or propose to make some changes to the sale terms. These are all factors that sellers discuss with their real estate agent prior to making a final decision.