Whether our clients are involved in a residential or commercial transaction, our skilled attorneys and experienced staff can assist you in closing your transactions in a professional and efficient manner. Affiliations with area title companies, surveyors and other real estate professionals allow us to turn-around contracts and obtain answers to title matters quickly; as we know clients are often presented with time sensitive situations.
Residential Transactions (General): Whether you are a buyer or seller, we are involved in the preparation and/or review of your real estate contract and will help you in negotiating any home inspection issues that may arise in your transaction. We will conscientiously monitor any contract contingencies and time deadlines with respect to your transaction. We will also attend your closing with you and fully and accurately explain all of the relevant closing documents.
(Sellers) For our seller clients, we handle the preparation of all closing documents. We will also order and obtain the title insurance and survey you are most likely required to provide the buyer under your contract, order all payoffs on any outstanding mortgages you may have, and order any assessment letters and certificates of insurance if your property is a condominium or townhome. See the “Sales Questionnaire” form on this site setting forth in information you will need to provide us. Your completing the form and returning it to us as soon as possible will be necessary for us to effectively represent you.
The closing is the culmination of all the steps of buying a home and generally occurs at a title insurance company. At closing, all the parties to the transaction come together to finalize the deal, signing and exchanging many documents, finally resulting in the passing of ownership (and keys) to the buyer. Some of the more important documents a seller needs to present (and which your attorney will prepare and or obtain) are:
a. Deed: Transfers title (ownership) from the seller to the buyer and gets recorded with the county recorder of deeds.
b. Affidavit of Title: A statement from the seller representing that there have been no liens or other defects in title since the date title has been examined by the title insurance company.
c. Bill of Sale: Conveys the personal property (appliances and movable items) to the Buyer.
d. Transfer Tax Declarations: The state, county and certain municipalities tax the transfer of real estate based on the sale price of the property. The state charges $1 per thousand of value and the county charges $.50 per thousand. Municipal transfer taxes vary depending upon the municipality involved.
e. Seller’s Closing Statement: Ledger showing the Seller’s credits and charges and the amount of money to be netted from the sale.
f. Survey: Plat showing the dimensions of the lot and the relationship between the lot and the surrounding structures, drives, walks and fences. This is not normally necessary when selling a condominium property.
g. Paid Assessment Letter / Right of First Refusal: If your home is a condominium or within an association of other homes, the letter confirms that all current assessments have been paid and, if a right of first refusal exists, that the association has not elected to exercise its right to purchase the property.
h. Mortgage Loan Pay-Off Statement: Any mortgage encumbering the property (this includes home equity loans which are frequently secured lines of credit) must be paid off at closing. The statement is obtained from the lender and sets forth the amount necessary to pay the loan in full and clear the lien of record. Statements for lines of credit also require the Seller to sign the statement to confirm they are closing out the loan.
i. Water Certification: The City of Chicago, as well as some other towns, requires that all buildings have, other than condominiums (unless the condominium unit has its own separate meter) the water meter read and the final bill paid before closing. In Chicago, your attorney will order the certification and the water department may phone you to make an appointment to read the meter if it has not been read recently. For other towns the Seller may need to arrange for the reading ahead of the closing.
i. Zoning Certification: In Chicago, single family homes and apartment buildings up to 5 units must have the city’s stamp that it complies with the zoning ordinance. Apartment buildings over 5 units require a building registration.
j. Miscellaneous: Many municipalities and title companies have other particular forms or requirements necessary for the transfer of property.
The Title Company Documents that are signed are:
i. RESPA / HUD 1 Statement: This is a two column, two page ledger that discloses the closing costs, charges and credits from the perspective of both the buyer and seller. The Buyer’s funds necessary to close is calculated on the RESPA (see “Estimate of Buyer’s Funds Needed to Close” form on this to determine a rough estimate) and the Seller’s “cash to balance” is calculated as well.
ii. ALTA Staement: A statement signed by the buyer and seller disclosing to the title company that the parties are not aware of unknown liens or title problems concerning the property.
iii. IRS Form 1099: The title company normally reports the transaction to the IRS regardless of whether a tax will be due.
(Buyers) For our buyer clients, we will help walk you through any lender issues both before and at closing. We will also review all closing papers to make sure you are obtaining clear and marketable title and will explain these documents so you understand what you are signing.
Once you have signed the lender’s loan documents, your attorney will review with you the Seller’s conveyance documents. Note that at the closing the title company acts as agent for your lender to make sure you have properly signed the documents and met all other requirements necessary to “fund” the loan. This means the title company will not release the loan funds until obtaining authorization from the lender to do so. Oftentimes obtaining this authorization is what delays a closing. If you can make sure you have provided your loan officer with all necessary documentation (double check) it will smooth process. Aside from disbursing the funds, the title company records the deed, insures your title to the property and the lender’s lien position. The whole process should take an hour to an hour and a half but can last longer if the buyer, seller or lender are not properly prepared.
The Lender’s Documents that are signed by the buyers are:
a. Promissory Note: Your promise to repay the loan at a certain rate over a certain amount of time.
b. Mortgage: The lien that gets recorded on title pledging the property as collateral for your repayment of the loan.
c. Miscellaneous: Truth in Lending disclosures, tax transcript requests, first payment letter, name affidavits, tax, insurance and private mortgage insurance disclosures, loan application, commitment letter, flood certification disclosures, among other documents.
Attendance at Closing:
Not all the parties actually must be at the closing, and your Attorney can act on your behalf with a written power of attorney. The Seller usually pre-signs the deed and the various other transfer documents described above and the Seller’s attorney delivers them to the closing table and acts through the written power of attorney. The Buyer usually must be at the closing and sign the numerous loan documents, but under special circumstances, can have another sign for him or her under power of attorney as well. Well ahead of time, the buyer must get the lender’s permission and approval of the power of attorney form. The Realtors usually attend (and sometimes the loan officer) to make sure the transaction goes smoothly, but their attendance is not required.
The Buyer has to be prepared well ahead of the closing date to ensure that it will go smoothly. Below is a checklist of the tasks that must be thought about before closing. If you have any doubts about what is expected of you, ask your attorney.
i. Insurance: Insurance must be obtained irrespective of the type of property being purchased. For a home or apartment building, the buyer must present proof of insurance and a paid receipt or the transaction will not close. In the case of a condominium, the association procures insurance for the commonly owned structure, and a certificate evidencing insurance must be brought (usually by the seller’s attorney) to the closing. The unit Buyer should obtain condominium owner’s insurance for their possessions and the interior of the unit, including fixtures and appliances as these are not covered by the common insurance.
ii. Money: The title company will only accept a cashier’s or certified check. Make the check out to yourself, and you can then sign it over to the title company at the closing. Funds may also be sent by wire transfer but you will need specific “wiring instructions” from the title company in order to get the funds into the proper account. The wire can take up to a full day to generate, so plan ahead. We will do our best to get you the “bottom line” figure from the title company but understand that determining the amount is out of our control.. This process is often delayed because the title company must wait to get figures from the lender and the Seller’s attorney and then input them into their system. Often, the title company’s calculation won’t be available until later in the afternoon the day before closing. Sometimes the figure won’t be known until closing, so getting an estimate of the funds necessary to close will often be the only option. This is especially true if extra time is required for you to get the funds.
Generally speaking, the amount of the funds needed (“the bottom line” or “cash to close”) can be found by applying the following calculation:
Purchase Price $
Subtracting
Earnest money ($)
Loan Amount ($)
Tax credit ($)
Adding
Lender’s closing costs $
(see Good Faith Estimate provided
by your lender upon application)
Attorney’s fees $
Municipal tax (if any) $
Title charges $
Bottom Line $
Add Cushion (just in case) $
Cash to bring to Closing $