6.0 Contract Is Now Available

The new 6.0 real estate contract is now available.  There are significant changes, especially to the mortgage paragraphs so be sure your attorney is aware of the changes and how they impact the client.

http://www.199closing.com

How Should the Seller Leave the Property?

Typically, unless the parties have an agreement to the contrary, a seller shall clean the property, remove all clutter, and leave the property in "broom swept" condition prior to vacating the premises.  If the seller fails to do so, he/she can be liable for damages to the buyer for the cost to remove such items and clean the premises.

http://www.199closing.com

Where Will My Real Estate Closing Occur?

Per most contracts, closings will usually occur at the title office nearest to the subject property.  It is typically a requirement that the title office be located in the same county as the real estate being purchased.

http://www.199closing.com

Remote Closing

If a buyer is looking to close remotely, meaning they will not physically be present at the closing, he/she must approve it with their lender.  The title company and attorneys likely will be able to coordinate such a closing, but lenders may not approve.  In a cash deal with no lenders, it is typically much easier to accomplish.

http://www.199closing.com

New Closing Statement Coming Soon

The settlement statement at closing will soon be significantly changing and will no longer be produced by HUD.  It will be slightly longer, but hopefully easier to understand.

http://www.199closing.com

Homeowner's Insurance Required By Lenders

If you are buying a property using a mortgage, you will be required by your lender to carry homeowner's insurance.  This is because the property is acting as collateral for the loan, so if the property is destroyed or damaged, any insurance proceeds will first be paid to the lender until their interest is covered, then any additional proceeds will be payable to the buyer.

http://www.199closing.com

Home Warranty Section

In the new 6.0 contract, the home warranty section was moved to the optional paragraphs. Be aware that the language is slightly different, with an actual cost to be inserted.

http://www.199closing.com

6.0 Real Estate Contract Coming Soon

The new 6.0 Real Estate Contract should be available within a couple weeks. It looks like it will be approved for use all over northern Illinois.

http://www.199closing.com

Purchase Contingency

If your home purchase is contingent on the sale of your prior house, be sure to indicate that on the contract.  This will enable you to terminate the contract if you are unable to sell the house. 

http://www.199closing.com

Acceptance Date

When signing a contract as a seller, make sure you enter an Acceptance Date with your signature.  This is a very important date as the rest of the contract tolls from this date.

http://www.199closing.com

"As-Is" Contracts

Even if the property is sold "as-is," the buyer can still terminate the contract following an inspection if it is not satisfactory.  The buyer just may not have the right to raise inspection items.

http://www.199closing.com

Verbal Representations

Make sure any offers made by the opposing party are in the contract.  Otherwise, they are difficult to enforce.

http://www.199closing.com

Home Warranty

If a buyer is unsure of the condition of the property, they can ask the seller to purchase a home warranty for them prior to closing.  It will usually cost a few hundred dollars and will usually last about 13 months from closing.  Based on the coverage, it can protect many fixtures as well as the house itself.

http://www.199closing.com

Final Walkthrough

As a buyer, make sure everything is in acceptable condition during the final walkthrough of the property.  This would be your last change to raise any final issues or revisit inspection items that have not been completed.  Once the closing takes place, you lose your leverage and authority to raise these issues.

http://www.199closing.com

Attorney Review Period

Before signing a contract, make sure there is an Attorney Review period in the contract in order to protect yourself.  This will allow your real estate attorney to propose any modifications or clarifications, in addition to being able to terminate the contract if you so choose.

 http://www.199closing.com

Post Possession Agreements

Post-possession agreements allow the Seller to stay in possession of a property after closing. We generally advise against them for buyers, but if necessary, we recommend an adequate escrow holding to protect against damages in addition to a daily per diem.

http://www.199closing.com

Down Payment Assistance

When a buyer is receiving financial assistance with their down payment for closing, many lenders will require a gift letter and verification of funds prior to closing.  Make sure you check with your lender if you will be receiving assistance.  Feel free to contact a real estate lawyer with our office with any questions.

http:/www.199closing.com

Dual-Agency for Real Estate Brokers

We generally recommend that clients do not use a realtor as a dual agent, meaning they represent both parties. There is an inherent conflict of interest as they are trying to get the highest price possible for the seller and the lowest price possible for the buyer.

 http://www.199closing.com

Sellers Provide Title Insurance

Sellers provide title insurance at closing.  Title companies' charges for this will be within $100 of each other, and can range from $900-$1600 or more depending on the sales price.

http://www.199closing.com

Real Estate Contract Dates

The most important date on your contract is the Acceptance Date.  That is when many of the time periods begin running, such as the Attorney Review and Inspection Period.

http://www.199closing.com

Short Sale Pre-Approval

Many lenders are now pre-approving short sales, allowing people to close on short sales much faster.  Be sure your broker or real estate lawyer contacts your lender prior to the beginning the short sale process to inquire about pre-approval.

http://www.199closing.com/services-1/

Wiring Finds to Real Estate Closing

Federal law requires that when a buyer or seller has tp bring more than $50,000 to closing, the entire amount must be wired prior to closing.  The title company will not accept checks of any kind as payment, even for a portion of the amount.

http://www.199closing.com

Marc Trestman Selling House in Chicagoland

Marc Trestman is selling his house in Winnetka for a reported $3.8M less than a year after purchasing it.









http://www.199closing.com

Inspection on Foreclosured Properties

Banks selling foreclosed properties usually won't address inspection items that buyers would like repaired/replaced.  We would still recommend conducting an inspection and requesting these items, although, in exchange for the reduced purchase price for which the property is selling, banks will likely reject any repairs to the property.

 http://www.199closing.com

Short Sale Time Frame

Typical short sales can take between 6 weeks and 6 months to close from point of offer.  The average time frame is around 3 months.  The length will depend on the lender review process, among other things.

http://www.199closing.com.

Mortgage Payoffs at Closing

Prior to closing, a seller's real estate lawyer will order payoffs for any mortgages or liens on the property so these items can be paid off at closing.  This will allow the seller to transfer clear title at closing.

http://www.199closing.com/services-1/

Lifespan of Surveys

Surveys older than 6 months are usually not sufficient at closing.  In a cash transaction, this may not be an issue pending buyer's approval.  Ask your real estate attorney for more info.

http://www.199closing.com

Tax-Exempt Proceeds from Sale of Property

Proceeds up to $250k for an individual or $500k for a married couple is tax exempt from the sale of a primary residence, assuming the property was not used for business or rental purposes and it was occupied by the seller for at least 2 out of the last 5 years prior to the sale.

http://www.199closing.com

Condominium Declarations and Bylaws

When buying a condo, make sure your real estate attorney obtains the bylaws and declarations, as well as a 22.1 disclosure prior to closing.  This will provide the rules and regulations of the association and information on any pending assessments.

http://www.199closing.com

Choosing a Real Estate Attorney

When choosing a real estate lawyer, be sure to retain someone who is familiar with the area where the property is located.  This familiarity is important during the attorney modification period and will make the process smoother.

http://www.199closing.com

Tax Prorations in Illinois

Taxes that have not been billed or paid prior to closing are typically prorated at 110% in Cook County and 105% in the surrounding counties, to be credited to the buyer. 

http://www.199closing.com

Real Estate Closing Costs for Sellers

In transactions with two realtors, a real estate lawyer will usually estimate closing costs for the seller at 8-10%...3-5% without realtors.  These costs can include a survey (when applicable), title fees, tax prorations, realtor fees, and attorney fees, among a few others depending on the transaction.

http://www.199closing.com

Tax Prorations at Real Estate Closings

Make sure your real estate attorney double checks the tax prorations on the HUD at closing. It is the most common place for errors. 

http://www.199closing.com

Real Estate Title Fees Rise

2013 saw a 10% increase in real estate title fees.  Title fees resulting from title insurance that is purchased by a seller for a buyer at closing in order to cover any defects in title of the subject property.  Real Estate Lawyers expect a smaller increase for 2014

http://www.199closing.com

Second Financing Date for 6.0 Contract

It looks like the new 6.0 contract will add a second financing date to the current "clear to close" date.  Under this contract, the buyer will also have to notify the seller when the buyer's loan has been submitted to underwriting.  Failure to do so will result in a complete waiver of the financing contingencies.  Therefore, the buyer's real estate attorney or lawyer will need to be in contact with their client's lender more than previously.

 http://www.199closing.com

Inspections For "AS-IS" Contract

In an "as-is" contract," the buyer should still order an inspection for their knowledge of any issues associated with the property.  If they choose to, the purchaser can still cancel the contract based on inspection issues, however, they may be unable to request repairs or credits for inspection items.

 http://www.199closing.com

How Are Realtors Compensated for a Closing?

Many people are unaware that in Illinois, both realtors in the transaction are typically compensated by the seller, based on a percentage of the purchase price.  There is usually no cost to the buyer(s).

 

http://www.199closing.com

Attorney Review Period

Be sure to get your real estate contract to your attorney ASAP after it is fully executed.  The Attorney Review period starts when contract is signed and will only remain open for a few days.  This is the time you can propose modifications or make clarifications.  To have your rights fully protected, your attorney will need to review your contract and prepare a letter to the opposing attorney during this period.

 http://www.199closing.com/about-us/

Beware of Hidden Fees

Beware of attorneys who add on charges at closing.  Many will charge additional fees for Powers of Attorney, correspondence letters, notarizing, etc.  Our real estate attorneys will never do that.  If you are using another attorney, be sure to agree upon a flat fee price upfront.

http://www.199closing.com

Frozen Pipes Becoming a Major Concern

When purchasing vacant properties, be sure to check for frozen pipes given the recent weather. Many purchasers are failing to do so resulting in a large initial expense after closing. 

http://www.199closing.com

Should I Get a Home Inspection?

One word of advice...always have a home inspection performed during a purchase. A few hundred dollars can save you a lot of aggravation and money in the future. 

http://www.199closing.com

Real Estate Market to Pick Up Soon

Based on past years, expect the real estate market to significantly pick up after the Super Bowl.  This is good news if you are selling because more buyers will be evaluating properties soon.  However, if you are purchasing, it may be in your best interest to submit an offer before then to beat the potential rush. 

 http://www.199closing.com

Interest Rates Will Rise, But When?

Everybody is waiting for interest rates to rise in the real estate market.  However, new information indicates that interest rates may drop once more before they rise. The best time to buy may be spring 2014.

http://www.199closing.com

5.0 Real Estate Contract To Be Replaced Soon

According to the real estate committee, the new 6.0 contract should be available for use by late spring/early summer.  The majority of the contract should remain the same, although it will contain some new language and modifications based on the suggestions of the real estate professionals in the area.  Stay tuned for more information as the launch of this contract comes closer.

http://www.199closing.com