Buying a home is one of the biggest financial decisions that you will ever make in your life. It is a life-changing moment to finally own a house of your own and almost a dream come true for every home seeker. Therefore, there should be no possibility of any single mistake that can take your dream home away from you.
If you are buying a home in Illinois and are feeling worried about what final inspections you should conduct, what paperwork you should focus on, and what you should do before closing the deal, we are here for you.
We have built this special checklist for real estate closing in Illinois that will help you complete every task before signing the documents. Here it goes:
1) Reviewing mortgage disclosures
You will receive a closing disclosure from your mortgage lender at least three days before the closing date. This document is also called the HUD-1 statement.
In the given time, you should thoroughly read and review this disclosure to understand every aspect and detail of your loan, including interest rates, time period of the loan, etc.
In the disclosure, you can even find some additional (junk) fees, or the lender can ask you for some fees such as application fees, administrative, loan processing, broker rebate fee, etc. Although you can’t entirely avoid all of them, you can negotiate them or even speak up if you find something unreasonable.
2) Ensure the Funding Requirements
Before you sign the final documents, you must recheck your funding requirements, as once the deal is closed, you will be bound to pay the money even if you don’t have it. Failure in doing so can cost you unwanted loss of money in the form of deposit money as well as the services you enjoyed when the deal was active.
So, to protect yourself from any sort of trouble, just make a final check that you have arranged the money for the payments. When you are fully assured that your mortgage is finalized and you can pay the loan without any issue, only then sign the purchase contract.
3) Pay the Closing Costs
Numerous payments need to be made on the closing day, such as:
- Property Taxes
- Homeowner’s insurance
- Private mortgage insurance in some cases
- Loan fees
- Title transfer fee
Therefore, it is crucial that you consult the seller, make a list of them and carry cheques for the full amount due.
4) Search and Insure Title
The property seller is often not the only one entitled to the house. There may be some liens attached to it who could claim the property and challenge your transaction in the future. Therefore, it is necessary that you clear the title before you conclude the deal.
You can perform a search for public records and get a clear picture of the property’s title or liens against it. Also, you can purchase title insurance to protect you and your lender from any financial problems occurring in case of any liens claiming the title.
5) Get Home Pest Inspection
A pest inspection is one of the most essential prerequisites before you close the deal. If unnoticed, the termites or ants can wreak havoc on your property and cause you the loss of thousands of dollars. Also, pest inspection is one of the necessities for mortgage approval from some lenders.
A pest inspection differs from the general home inspection, and you can get it done for merely $75 to $125 in Illinois. Thus, without paying much, you can save yourself from a big financial loss.
6) Consult a Real Estate Attorney
If you buy a home in Illinois, it is not absolutely compulsory to hire a real estate attorney for the proceedings. However, if you do so, you can get an enormous amount of help.
Licensed attorneys can provide you with suitable legal opinions, draft legal documents, provide you with legal advice, and help you better navigate through the paperwork and legal proceedings. This way, by spending a small amount on the attorney’s fees, you can get full assurance that you are making the right decision and having a fair deal.
6) Read All the Paperwork
The closing day comes with lots of paperwork to be signed. The worst part is all the paperwork is crammed with complex language, jargon, and clauses that are challenging to be understood by general buyers. Ignoring them, however, can lead you to financial troubles in the future.
So, read all the paperwork carefully or hire a property attorney to make you understand everything about the agreement. Make sure that all the terms mentioned in the contract are known to you and if there is something you don’t feel justified with, ask questions or even ask for fees from the seller.
If your buying agreement had any contingency to be addressed by the seller, it is time to inquire about that. Before you close on your home, ask the seller for any contingency such as –
- Secure financing
- Appraisal of the property
- Completing a home inspection
- Correction of any issues found in the property
When you are going through the closing process, make sure that you carry every required document with you. It may include:
- Documents asked by your mortgage lender
- Your identification proof such as driving license
- Homeowner’s insurance
- The Deed
- The Affidavit of Title
- Bill of Sale
- ALTA Statement
- Transfer tax forms
- Settlement Statement
Keep all these documents with you along with a diary to note down questions that you want to ask during the closing process.
10) The Final walk through
The last but one of the most important things to do is the final walk through. You can visit the home within 24 hours of the closing date and check if everything is according to the agreements. This is the last opportunity in your hands to ask the seller for any malfunction in the property. So, it is recommended that you conduct it with utmost care.
When you run the final walk through, always verify that the previous owner has removed all of his belongings from the property and everything is restored or repaired as per the signing documents.