Frequently Asked Law Questions

Real Estate Closing Questions

I have listed my house for sale through a real estate broker; do I need an attorney to represent me in my sale and closing?

It is advisable to retain an attorney who as a regular part of his or her law practice does real estate closings. The real estate sales contract generally provides for attorney review and modification. There are frequently property inspection and repair issues which must be negotiated. In today’s market, sellers are often asked to pay all or a part of the buyer’s closing costs. The real estate title must be ordered, examined and cleared. Closing documents including a deed, tax declarations, affidavits, a bill of sale and a HUD 1 closing statement must prepared by the seller or the seller’s attorney.

I am purchasing a house through a real estate broker, do I need an Attorney?

It is also advisable for buyers to retain an attorney to represent them in their real estate purchase. Generally for most people, the purchase of real estate is their single largest financial undertaking. The real estate sales contract will normally require legal review and negotiation about property inspection, financing, tax prorations and other legal issues. The buyer will typically be required to get a loan and must often request loan extensions if there is a delay in the loan process. The real estate title must be examined cleared and reviewed. In northern Illinois, there are frequently issues concerning SSA’s (Special Service Tax Areas) . In condominium and town home purchases there are use restrictions on the real estate to be considered. At the closing, buyers will be required to sign a note and a mortgage and many other loan documents which will be explained to the buyers by their attorney.

I have listed my house for sale with a real estate broker and have been told that I need a title insurance policy and a survey. Why I do I need these items?

Buyers and their lenders will always require assurance that ownership of the real estate being sold can be transferred from the seller to the buyer and that the lender’s loan will be a first lien on the real estate. Title Insurance gives this protection to buyers and the buyer’s lender. Surveys provide assurance that the real estate being sold complies with building set back and easement restrictions and show that the house and other structures are located within the boundaries of the lot being purchased.

I am purchasing a house through a real estate broker; Do I need any type of home inspections?

Many buyers find it prudent to have a general home Inspection which includes an inspection of HVAC systems , roof, foundation and other structural components and the electrical and plumbing systems. FHA lenders require termite inspections and it is not unusual for buyers to have an inspection to detect whether there is the presence of unacceptable concentrations of Radon gas in the subterranean surface of the residence being purchased.

I am a first time home buyer. What closing costs can I expect to pay to get a loan?

Loan origination and discount points; title escrow and title insurance costs; private mortgage insurance; home inspection fees; document recording fees; and attorneys fees. Closing costs vary from loan to loan and may be as little as 1% of the buyer’s loan amount and as much as 3% -6% of the loan amount depending upon many factors including the buyer’s credit scores and type and amount of loan applied for. For more information visit the Department of Housing and Urban Development website listed below (HUD).

I have listed my house for sale; What disclosures about defects and other matters must I give to a buyer?

The Illinois Real Property Disclosure Act requires the disclosure of known defects as listed in the statute by certain real estate sellers; Other Illinois statutes require disclosures concerning the presence of lead paint and mold; Various local and municipal ordinances require zoning compliance and other disclosures. The Radon Awareness Act effective 1/1/08 requires sellers to deliver an Illinois Emergency Management Agency (IEMA) radon disclosure pamphlet and to disclosure the presence of unacceptable radon levels, if known.

I have fallen behind in my mortgage payment and would like to sell my house. What if my sale proceeds are not adequate to pay off my mortgage loan?

Some lenders will permit an owner to sell real estate without paying back 100% of the mortgage loan. This type of sale is commonly referred to as a “Short Sale.” There are tax, credit and other issues associated with short sales that are not considerations in ordinary closings. The process to obtain lender approval for a short sale is much more complex than an a normal closing where the lender is paid in full and generally requires the participation of real estate professionals who are experienced in the short sales process.