A Step-by-Step Guide to the Closing Process for Sellers

You’ve received a great offer on your home and you accepted. Congratulations! All the time, money, and effort you spent marketing the home with your realtor, preparing for showings, and accommodating potential buyers has finally paid off.

Now all that remains is closing on the sale. This is when the buyer becomes the new legal homeowner and you receive your payment. If you’re a first-time home seller or it has been a while since you placed a property on the market, this blog explains what to expect during the closing process and how you can make it successful.

Before the Closing

When you receive a contract from the buyer and their attorney, your attorney will review it to verify elements like the following:

  • The buyer’s earnest money is sufficient. (Earnest money is a deposit made to represent their good faith intention to buy your home.  At the closing, this money is applied toward the purchase price. In the event of a breach by the buyer, this amount is held pending the resolution of the dispute between the parties.)
  • The terms of their mortgage and the amount of time they will need to acquire the mortgage are acceptable.
  • All proration terms are fair.
  • The terms of your representations and warranties are not too broad.
  • Default penalties are reasonable.

If the contract is acceptable or appropriate modifications have been made, your attorney will arrange for the following to be carried out:

  • Ordering title insurance.
  • Collection of paid assessment letters and association information.
  • A survey (if indicated in the contract).
  • The fulfillment of municipal requirements such as inspections and tests of the water, sewer, and septic systems.

A title company will search county and state records to verify who currently holds the title to your home and whether any impediments exist, such as liens, unpaid mortgages, easements, and building lines. Once any title exceptions have been satisfied, your attorney will prepare all the documents needed to transfer title to the property, such as a closing statement, deed, and bill of sale.

As the seller, you are responsible for certain closing costs. In Illinois, they generally include:

  • The cost of the title search and title insurance.
  • Real estate broker or agent’s commission.
  • The balance of any existing mortgages or debt on the home
  • Any judgments or liens against the property.
  • State, county, and possibly municipal real estate transfer taxes. The amount will vary according to where the property is located. In Chicago, both buyers and sellers are responsible for portions of the transfer tax.
  • Prorated property taxes.
  • Any Homeowner’s Association dues payable on the closing date.

At the Closing

At the settlement table, you and the buyer sign all documents related to the closing and the buyer presents the wired funds or cashier’s check to the title company, who will then:

  • Arrange to have your mortgage paid off and your real estate team paid.
  • Ensure that the transaction and deed are recorded with the appropriate governmental body.

The buyer receives the keys and officially takes possession of the property unless an alternative arrangement is specified in the contract.

If you cannot make it to the closing for some reason, you can sign the deed and the transfer documents in advance and even grant your lawyer power of attorney to sign incidental paperwork. Your money can be wired to your bank or, if you are buying a new home that day or soon afterward, placed in the escrow account for the new purchase.

Work with a Chicago Real Estate Attorney

Selling your home or any other property that you own is one of the largest financial transactions you will ever carry out. The Chicago real estate team at Auricchio Law Offices will help you understand the buy-sell agreement, fulfill your obligations as the seller, and make sure that the buyer and their attorney do the same. We will also clear any title objections, advise you of any municipal or county requirements that must be met before the sale proceeds, and attend the closing. For more information, please call 312-263-0010 or contact us.

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Auricchio Law Offices

Auricchio Law Offices in Chicago provides a complete range of real estate services. We facilitate residential and commercial real estate transactions, advise and represent condominium associations, and represent property owners in real estate litigation. Whatever your real estate issue, we will work diligently to achieve your goals in a timely and efficient manner.

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