We’ve compiled a list of the questions we often get asked by our clients when looking to buy single-family homes in the Chicago area.
Yes! It’s always a good idea to get pre-approved by several different lenders before looking for houses. This will give you an idea of what rates you qualify for. If it’s your first time buying a home, getting in contact with local lenders can help you learn about the different types of loans and what the different benefits are for each one. It’s also important to get pre-approved to get an idea of the additional fees that come with a mortgage, like underwriting fees and closing costs.
Before you get too deep into your home search, it’s important to figure out exactly how much house you can afford. Even if you can afford the down payment on a home, make sure your budget can cover the monthly mortgage payments that you’ll be making over the years.
Sites like Fifth Third Bank have free calculation tools that can help you assess how big of a mortgage will fit into your budget. Getting pre-approved will also give you a good idea of how much the bank will be willing to lend you depending on your financial history and current income.
Deciding whether to keep renting or to buy depends largely on the area you live in. Property in Chicago is cheaper than in big cities on the West Coast, and buying might save you money in the long run and give you financial security as an investment. Low interest rates also provide better times to buy.
If you’re new to the area, on the other hand, renting might give you an opportunity to check out different neighborhoods across the city before you settle down. If you find yourself in a neighborhood where you don’t want to stay for more than a few years, it will probably save you time and money to keep renting for the time being.
You don’t need to sell your house before purchasing a new one. Buying a new home before selling your former one can make the transition easier since you won’t have to store your belonging and rent or stay in another space between the two properties. However, many sales to buyers who still own their first property are contingent on the sale of that first home, which means that the buyer can only purchase the home if they sell the first property in a given period. If your home doesn’t sell quickly, you could get “bumped” out of the contract and replaced by another potential buyer. While this process may sound challenging, an experienced Realtor will know how to guide you and avoid any potential pitfalls.
You’re not required to use a realtor to buy a home, but we highly recommend using one (of course, we’re a little biased). A realtor does so much more than showing a property: they’ll help guide buyers to making a good offer that won’t get rejected, will point out potential problems of each property, and will have a great understanding of property values in the neighborhood.
If you research realtors that work with the type of property and neighborhood that you’re interested in, you’ll be able to find a buyer’s agent who can make your home-buying process easy and stress-free. Their expertise will actually help you save money and will raise your chances of getting a home that fits your financial needs and lifestyle.
There’s no magic number of homes to consider before putting in an offer. If you are working with a good realtor, they will take into consideration what you’re looking for and will make sure that you see a wide range of properties that represent what’s available to you.
Although it can be difficult, we do advise that you try your best to stay objective during your home-searching process. Looking at a wide variety of homes can help you see not only the charm of properties but any potential problems that come with age or neglect from former owners.
To some buyers, foreclosed properties look like an attractive way to buy cheap and build value in a home with some sweat equity. While foreclosures can be a great opportunity, they come with the potential for underlying complications that aren’t made clear to buyers upfront. A property that has been neglected can have structural damage or issues with electricity or water that can’t be discovered until after purchase, and often you’ll find old trash, furniture, or belongings left behind that will have to be disposed of. It will also be harder to finance a foreclosed property with low-interest loans like the FHA loan, which has a set of quality standards that eligible properties must meet.
So you’ve put in an offer and find out that it is rejected by the seller. Is it all over? No! A rejected offer just means that the seller doesn’t agree to the offer you’ve made. You can submit a higher offer or respond to the seller’s counteroffer if they’ve made one.
If your offer was accepted, congratulations! There’s still a lot to get done. First, you will want to have an attorney ready to review your contract as soon as possible (more on that below). You’ll want to get the details sorted out with your lender by completing the formal mortgage application. It will take some time to get the official documentation submitted and for the lender to begin the underwriting process. You will also want to begin the search for an inspector to conduct an inspection of the property.
As soon as you go under contract, you and the seller will both take the contract to your separate attorneys and have them review the terms and contingencies. You will also want to schedule your inspection as soon as possible so that you can create addendums to the contract that request pre-sale repairs from the seller based on the inspection report.
After you go under contract, you will have five business days (in the city of Chicago) to start attorney review and to complete the home inspection. It’s very important to get this process going as soon as possible so that your attorney can flag anything in the contract that needs to be addressed or altered to the contract, so you should make sure you have an attorney and inspector lined up to be scheduled as soon as you put in an offer on a home.
An inspection is a prospective buyer’s opportunity to hire a third-party inspector to assess the condition of the home. If the inspector finds issues that need repair or that lower the home value, the buyer can bring these findings to the seller and request certain repairs, especially safety issues.
An inspector will examine the structure of the home, the condition of the roof, and the age and performance of the water heater, electric system, and heating and cooling systems. After their visit, they will write up a report of their findings. We also recommend that the buyer comes to the inspection and takes their own notes to get a good understanding of the property’s condition.
The time between an accepted offer and the closing date is often 30-45 days, but make sure you stay flexible in regards to the timeline. After your offer is accepted, several different parties have their own paperwork to process: the lender will process your application, you’ll make any changes to your offer based on new findings revealed in the home inspection, and the village that oversees the area might make requests for repairs based on their guidelines. Once these moving parts get sorted out, you will set a closing date, where you will sign mortgage and insurance documents with your attorney. Once you’ve signed everything, you’ll get the keys and the house will be yours!
With over a decade of experience helping clients buy and sell homes in Chicago, we understand the complications that come with the process. Feel free to reach out to our team with any questions you have, or check out our Advanced Search feature for local listings and start the search for your home today.
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