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We recently came across a house that we liked. We do not have a buyer's agent. What is the next step for making an offer? If we hire a real estate attorney, what steps of the entire buying process can we expect him/her to cover. Who arranges for inspection and other things (whatever they are!)? I am totally cluless.
If the house is for sale by owner, you need a lawyer to handle the contract, the paper work and the closing. If the house is listed with a real estate company, the owner cannot show you the house or talk about it with you. You cannot offer a contract to this owner. A realtor cannot show you, or sell you a house that is not LISTED with a real estate agency.
All Realtors must be licensed to sell property. All realtors are either the Broker-Owner, a Broker, or a Sales Agent. All realtors are Listing Agents or Sales Agents. Some realtors are able to act as a "Dual Agents" and represent both the buyer and the seller of the same house.
IF this house has a FOR SALE BY "Widget Realty" call a realtor and tell them you want to make an OFFER on a house located at 127000 Main Street in Oak Park . It is listed by Widget Realty.
Your realtor, Jane Doe, will bring a contract and meet with you to sign the contract. The contracts are long Jane will ask you if you want a Home Inspection, Mold Inspection or RAdon Inspection. The answer is YES to the first two. If your contract does not include the first two questions, INSIST the be included as CONTINGENCIES. I will tell you why.
[1] Mold is the #2 killer in Illinois. You do not want to live in a house with mold, and you do not want children or pets in a house with mold. Mold can be removed if you do not mind paying up to $30k per room to remove it The problem with mold is this. If you have it in one room, you may have it in every room of the house, which is why it is not wise to buy any house that has been empty for more than 90 days.
[2] You do not want to buy a house that needs extensive repairs as soon as you buy it - unless you know this well in advance. Roof and truses, whole house rewire, whole re-plumb. basement flooding, and total floor replacement and joists are NOT do-it-yourself weekend projects unless you are a building contractor. They are expensive repairs and they are very time consuming.
Once you sign the contract is called the OFFER. You will give Jane a down payemnt called EARNEST MONEY. Your money will go into a bank account called ESCROW. It will not be used until CLOSING when you get the keys to your house. The Earnest money is applied to the down payment** on the house. Never ever make a down payment larger than what you can afford to light a match and watch burn. Seriously. This is why. Deals go bad. If something should happen before the house deal is closed, and you decide to NOT take the house, your Earnest money sitting in Escrow will go to the seller. The last house I bought I told the realtor I was giving her X dollars for down payment. She says, "we usually ask for XX dollars". I picked up the contract, stood up, and said "Fine. I will find a realtor who will." She says :I'm sorry." "Me too" and I tore the contract in half and started to walk out the door. She changed her mind. It's a game.
Jane will then call Widget Realty and she will them she has a SIGNED OFFER and deposit on their house on Main Street in Oak Park. This information is forwarded to the Listing Agent. - the person who listed the house. The LA will call the owners and tell them she has an OFFER on their house. She tells them the PRICE - the amount of money you agreed to PAY for the house on Main Street in Oak Park. If the owner does NOT agree, then Jane will call you and ask if you want to Make a COUNTER OFFER. The Offer-Counter Offer can go back and forth several times until one or two things happen. Both parties (Buyer an Seller) agree on a selling price, OR the parties cannot reach a agreement. In which case you start over and look for another house. IF there is an agreement on price, the SELLER will sign your OFFER. This is the easy part.
The next step is for you to get financing. If you are ex-military you can probably get a VA Loan. IF the house is in the county you may be eligible for an RD Loan. If your FICO score is good and you have 15-20% down payment you can get a long from your local bank. Or you can apply for a FHA Loan. Or you can pay cash. Once your loan is approved, and Jane is told, she will call the Sellers agent. The Sellers Agent arranges for a Termite Inspection. The MORTGAGOR (your lender) will arrange for an independent Home Appraisal (You pay for both). This reassures the mortgagor the value of your house is worth as or more than the amount you are asking to borrow. The next step the HOUSE and MOLD INSPECTIONs. Both are done by Illinois licensed persons. I think mine cost $700. but I do not live in Chicago.
If the house does NOT pass both inspections, you do NOT want this house. Take your Escrow money and find another house.
If the house does pass inspection the next thing that happens is the lawyer is called. There is a name for this process where the lawyer reads the title to the property and looks for DEFECTS -such as a LIEN - unpaid debt against the property, or a problem with the property line description - oh what a mess that is. Then the Title Company issues a Warranty Deed that warrants the house on Main Street to be good and free of defects in the legal description. Defects have to be "CURED" (fixed) before a CLEAR Title can be issued to you the buyer. Reading the legal description, writing the opinion, and then getting the getting the Warranty issued takes longer than any part of the process.
Once the Warranty comes back the closing date is set. and the Buyers Final Settlement and the Sellers Final Settlement is prepared. Closing costs to YOU can range from $2500 to $5000 or more. It includes everything from loan origination costs to tax stamps and registering the property at the court house. Some realtors suggest you pay half of the closing costs. Look carefully for the sellers closing costs are usually greater than the buyers. DO NOT agree to anything you do not understand and cannot read.
It is very unlikely Jane can tell you the exact amount of closing costs before she sees any paperwork. Guestimates in real estate are usually wrong.
Be patient. Depending upon the type of loan you get, your house may not close for 45 days or even later. It is NOT that unusual in an area as large as Cook County.
The last thing you need to know is how much house you can afford. You pay rate is most likely based on 4-1/3 weeks in a month. Your projected house payment cannot exceed one week salary.
If it does you are in financial trouble before you move in. NO honest banker will let you buy a house he knows you cannot afford. In other words, if you make $14k a year, your salary will not support an $80K house. A house is the most expensive wife you ever owned.
We recently came across a house that we liked. We do not have a buyer's agent. What is the next step for making an offer? If we hire a real estate attorney, what steps of the entire buying process can we expect him/her to cover. Who arranges for inspection and other things (whatever they are!)? I am totally cluless.
Regardless if you find a house on your own, or you found one through your realtor. I would highly recommend that you hire a good realtor to represent you. Not one that is just going to write up the contract, but one that WILL represent your best interest. Especially if you are clueless, as you state. It's not like it's going to cost you anything. The sellers pay for your buyers agent. Your agent will place an inspection and appraisal contingency as well as run a CMA report for you to see area comps. Your agent will recommend a title company/real estate attorney. Hope this helps. The previous post was just too long.
If the house is for sale by owner, you need a lawyer to handle the contract, the paper work and the closing. If the house is listed with a real estate company, the owner cannot show you the house or talk about it with you. You cannot offer a contract to this owner. A realtor cannot show you, or sell you a house that is not LISTED with a real estate agency.
So much misinformation, so little time.
I am sorry to be harsh but if you are not sure about a subject it may be best to just not answer especially when it comes to a subject such as buying a home.
I did not quote the whole post but there were many parts that were completely untrue.
To the OP, sit down with an attorney that can help you with all this. Talk to a couple and see which seems like they would be the most helpful, take you through the whole process rather than one that will just take care of the paperwork.
It does not sound like you want to use a buyers agent but contrary to what was posted above, if you want to use one you certainly can even if the house was not listed by an agent.
I am sorry to be harsh but if you are not sure about a subject it may be best to just not answer especially when it comes to a subject such as buying a home.
I did not quote the whole post but there were many parts that were completely untrue.
To the OP, sit down with an attorney that can help you with all this. Talk to a couple and see which seems like they would be the most helpful, take you through the whole process rather than one that will just take care of the paperwork.
It does not sound like you want to use a buyers agent but contrary to what was posted above, if you want to use one you certainly can even if the house was not listed by an agent.
Mike,
You got through that? You poor thing. I had to stop after the first couple of paragraphs.
I would caution against calling the listing agent directly. This may result in "dual agency" which, while legal in many places, places the buyer at a very distinct disadvantage.
Far better to have a BUYER'S AGENT that will represent your interests.
I think the time to decide what sort of house payment you can afford is WELL BEFORE you go shopping...
We recently came across a house that we liked. We do not have a buyer's agent. What is the next step for making an offer? If we hire a real estate attorney, what steps of the entire buying process can we expect him/her to cover. Who arranges for inspection and other things (whatever they are!)? I am totally cluless.
Your last sentence tells me you are in need of a buyers agent.
You want someone who does have a clue, who works exclusively for you: a buyer's agent. Call some agents today and interview them. Better yet, get referrals from friends.
A realtor cannot show you, or sell you a house that is not LISTED with a real estate agency.
News to me, every agent I know, the Texas Real Estate Commission, and the National Association of Realtors. Where DID you get this idea?
Yes, real estate agents (even Realtors) can show For Sale By Owner properties, and do everything they do normally with properties that are listed with a brokerage. They do this representing their client, the buyer.
That this extreme inaccuracy is in the very first paragraph of your post throws the credibility of everything else in it into question.
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