A real estate transaction is not simply signing the deal and transferring money. Both buyers and sellers need to prepare and sign contracts, conduct inspections, obtain a loan, and perform other real estate-related tasks for a successful transfer of ownership.
The process may seem even more complex when you are executing it on your own, i.e., without hiring a real estate agent. Please consider engaging a licensed real estate attorney for a successful closing. Here are a few important factors buyers and sellers must consider.
Closing Checklist for Buyers
Once the seller has prepared the real estate contract, they will work with the buyer and an attorney to prepare for closing. This is when the keys to the property and ownership title will be transferred to the new owner but there are a few steps that we need to take to prepare for a successful closing.
Collect Home Inspection Reports: A homebuyer conducts a thorough house inspection to detect problems with the condition of the Property. An inspection helps buyers know which areas could be problematic and might require expensive repairs in the future.
Negotiate Repairs: Inspection gives buyers detailed insights into the condition of the property and areas that need repairs. Based on these reports, the buyer negotiates the price with the seller. If the property requires expensive repairs, the buyer can request the seller to lower the asking price. You could either ask the seller to repair the damaged areas or adjust the price of the real estate deal to compensate for the damages.
Appraisal: Appraisal helps you know the real value of the property and whether the asking price matches the home’s current market value. A buyer has to order an appraisal.
Get Loan Approval: A vast majority of homebuyers finance the purchase of the property through different lenders. If you are applying for a loan, you need to wait until your loan application is approved before going ahead with closing. This is one of the contract conditions which needs to be met promptly.
Buy Homeowner’s Insurance: The lender will ask you to buy homeowner insurance to protect the property and assets from natural disasters and other damages. Even if you aren’t getting a loan for a house purchase, you should get homeowner’s insurance to protect your asset.
Closing Checklist for Sellers
The seller has to prepare the real estate contract, which has all the details and business terms of the transaction such as contingencies, price, and terms and conditions. You should consider getting the contract reviewed by a real estate attorney in Illinois before it is signed by the buyer and seller.
Here’s a closing checklist for a seller conducting an FSBO transaction in Illinois.
- Order Title Commitment: Do not confuse it with title insurance. A title commitment is issued by the title company to provide a detailed status of the condition title and disclose all liens and incumbrances.
- Order Survey: A survey determines the boundaries of the property in question and the property’s size. It specifies whether the property is associated with any easement or encroachment.
- Get the Deed Ready: Deed is the legal document used for the transfer of title.
- Bill of Sale: If the seller is transferring the ownership of personal property, such as appliances and fixtures they must provide the bill of sale.
- Affidavit of Title: The seller is supposed to provide the affidavit, which confirms that the seller is the owner of the property and there are no liens against it.
- Collect Payoff Letter for any outstanding Mortgages: This letter shows the outstanding loan amounts and terms of the payoff.
It is best to hire a real estate attorney, especially if you are conducting an FSBO transaction. A real estate attorney will help speed up the closing process and ensure that the ownership title is transferred without any difficulty. To ensure a safe and smooth closing, contact FSBO Legal Services.