The Real Estate Process: From Contract to Closing in Chicago, IL
Shauna Zamarripa, Yahoo! Contributor Network
I began my real estate career working for a Fortune 500 home builder before embarking on a career selling residential real estate. After taking part in thousands of transactions, the process for me was painless and clearly defined. However, buyers and sellers can often feel lost when it comes to the flow of a transaction and can benefit from a primer. The closing process can take 30 – 60 days from the date of contract acceptance. Understanding the importance of each step better prepares buyers and sellers to expect the unexpected. Before embarking on your next real estate contract, reviewing the process can help make real estate very easy.
The offer
It always begins with an offer. A buyer presents a proposal to a seller. A seller will likely counter that offer. Negotiations can go back and forth as many times as needed before the parties reach a satisfactory resolution. If neither party can agree to terms the offer is void and the buyer moves on without financial repercussions.
The acceptance
Once both parties have agreed to the terms of the offer, the buyer deposits his earnest money. Earnest money is 1 percent of the sales price. The buyer will also write an additional check to purchase the unrestricted right to cancel the contract, known as the option period. An escrow company receipts the checks and contract, and the closing process commences.
Note: Immediately after the offer acceptance, the buyer should have a meeting with his loan officer in order to establish a list of financial items required for closing. Be advised that buyers often have to present items more than once, and should make copies of requested items and keep these items on file for quick recovery and re-presentation as required.
The option period
Option periods exist to allow buyers to complete inspections and negotiate repairs, while retaining the unrestricted right to cancel a contract. The option period is typically anywhere from 10 – 14 days. Option fees range from $50 – $100 on average.
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