REAL ESTATE CLOSING ATTORNEY Limited Time: Real Estate Closings from $195 for Sellers
REAL ESTATE CLOSING ATTORNEY Limited Time: Real Estate Closings from $195 for Sellers
Below you'll find answers to many of your questions regarding your sale and what to expect from the real estate closing.
For all new clients, I'll prepare a “Road Map Letter” explaining the closing process. Each letter is custom-written to your transaction with relevant information (dates, inspections, title, etc).
Whether you are selling a parking spot, house or condo, I will:
Legally, the answer is "no," you don't have to retain an attorney. However, In Illinois the majority of buyers and sellers hire an attorney to handle their real estate transaction. Attorneys should not represent both the buyer and seller to a transaction - it is a conflict of interest.
Even though it is perfectly legal for you to handle everything, the system in Illinois is designed to have attorneys handle closings. Sellers in particular must prepare legal documents for the closing to clear the title and legally transfer the property to the buyer. What needs to be prepared is precise and often specific for Illinois. You cannot buy the required documents online or from the office store for this. Failure to prepare documents correctly to transfer title can lead to lawsuits in the future, but at the bare minimum, cause delays with the closing of days or weeks while items are corrected.
The average transaction takes me 10-15 hours, so it isn't a "quick" easy thing. And unfortunately it doesn't matter if the property is a $20,000 parking space or a $1MM home, all the same steps are taken. There aren't any shortcuts for "cheap" properties.
There are several "template" contracts in the Chicagoland area. However, I believe the Multiboard contract is the best one out there right now. It was created by a couple dozen real estate attorneys and realtors and is updated regularly to reflect changing times.
People are sometimes overwhelmed by the number of pages in the Multiboard contract, but almost 1/2 of the contract is saved for optional terms that aren't always needed. Plus, it isn't written in tiny print, so it is easy to read.
In my opinion, generic contracts found on the internet or in the office store are not adequate for Illinois transactions. Those contracts do not contain many of the necessary material terms needed for a transaction in Chicagoland.
Usually Buyers will present a written offer to the seller. If you don't make any changes to the offer, you can sign and date it. That would be a fully executed contract. The "Acceptance Date" is the date that you sign and date.
However, if you make any changes to the "offer" submitted by the buyer, it has become a "counter-offer." If you change the dates, dollars, or other key-terms, this becomes a counter-offer. The acceptance date would be the date that the Buyer "initials" by any of your changes.
You may cancel the contract for any reason, other than purchase price, in the first five business days after contract acceptance (or as otherwise stated on the contract). If you accept an offer from a buyer and then get another offer from someone else for more money, you cannot cancel the first contract based on sales price and switch to the second buyer.
Normally the realtors hold earnest money. However, if you are selling FSBO or using realtors that don't hold earnest money, the title company can hold the earnest money. If the title company holds the earnest money, a separate agreement must be signed with the title company opening a trust account. If the transaction is cancelled, there is usually a $300 fee. There is no fee if the transaction eventually closes.
Lohse Law does not hold earnest money because we understand it and interpret the law to be a conflict of interest. The conflict is simple; how can I be a fiduciary for the buyer and look out for their best interests when you, the seller, are my client? The answer is I can't.
There are a few "old school" attorneys still around that may hold earnest money. If that is the case, I don't mind. Additionally, I don't mind if the Buyer's realtor holds the earnest money. That is perfectly fine and safe too.
Lohse Law is an attorney-agent for several of the largest, national, title companies that have been around for many years. I work with the actual title insurer rather than smaller regional "mom-pop" title companies that are basically just an additional middle man.
Legally, the realtor cannot force you to use their company's title company. Burnet is one of the title companies that your realtor may ask (or strongly encourage) you use. Burnet Title doesn't have an attorney-agent program for attorneys, therefore Lohse Law does not work with Burnet Title.
I am often asked a question like this, “Brian, must I bring my property up to code by doing such-and-such, as stated in the Buyer’s inspection report?” My legal answer: No. You are not legally or contractually obligated to bring your property up to current codes. When your home was built (whenever it was) was most likely built to the current codes of the time. You do not have to “upgrade” or improve” your home to current codes just because an inspection indicates that the house isn’t built to “current code.”
Building codes (plumbing, electrical, etc.) are designed to set standards for new construction or remodeling based upon what is currently believed to be the best practices/standards. Codes are continually changing, and we are often learning of better and safer ways to build. The building codes from 1960 are not going to be the same as a building codes in 2021. The Residential Building Code was revised in 2001. The Illinois Code was revised in 2005. This means that every home built or updated in Illinois prior to 2005 is most likely not "up to code." Then each municipality likely has some of its own codes.
To make things more complicated, codes vary from town to town and change with time. What the codes are in Chicago will likely differ from those in the other ~200 cities/towns surrounding Chicago. An inspector is not going to know the hundreds of pages of “codes” for each Chicagoland’s 200 different cities/towns.
I believe that an inspector who cites code violations being unfair to both the buyer and the seller. It is a disservice to everyone. In my opinion, inspectors are going out of their way to “scare” buyers. I’m guessing it is because the inspector doesn’t want to get sued if after closing the Buyer asks, “why didn’t you tell me this?”
Bottom line… There is no law that says all houses must be updated or improved to meet the current building codes each time the codes are revised!
Every real estate transaction is a little different and there are several variables that cannot all be included here. But for an estimate, click on the tab above for Real Estate Services and scroll down to the Estimated Sales Proceeds Worksheet.
Scroll down this page of FAQs to see if you are getting "fleeced" by your real estate attorney.
The short answer is NO. I do not help investors with wholesaling or double escrows. I receive several calls every week asking if I do (I'm guessing there is a real estate investing seminar or book that discusses these two "strategies").
There are several laws that really limits this type of real estate "investor" in Illinois. The Real Estate License Act of 2000 (225 ILCS 454/1-10) limits a broad range of activities. Pay particular attention to to the "Broker" paragraphs to help determine if you need a Broker's License. If you are reading this paragraph, odds are that you will fall under one or more of the categories requiring a Broker's License!
The IDFPR (Illinois Department of Professional and Financial Regulation) does allow you to do one (1) transaction without a license; but the number drops to zero (0) if this is intended to be a business or to generate a profit or commission.
Double Escrow closings is an entirely separate thing. Generally title companies will not provide title insurance for Double Escrow closings. I do not know of any legitimate title companies that will provide title insurance for a double escrow closing.
A word of caution to those of you that may try to "wholesale" or do a "Double Escrow" regardless of the laws; you may get stuck in the middle of the transaction owning a property that you didn't intend on owning! Secondly, the IDFPR may come after you with heavy fines and penalties.
Lohse Law's real estate closings are one of the lowest total-fees law firms in Chicagoland. Lohse Law doesn't charge any "hidden" title fees whereby reducing your net take-home proceeds. Lohse law wants to ensure you are netting the most possible from your sale.
It is important to understand that your "legal" fees are only one of many costs/fees that you are going to incur when selling. The legal fees, for what is likely one of your largest transaction in your life, is quite likely going to be one of the smallest fees/costs that you are going to incur when selling your home. Therefore, it is very important to understand what the other fees are going to be. Many of these fees are negotiable or not even necessary.
I have recently witnessed quite a few real estate attorneys "promoting" lower attorney fees and "advertising" that they can save you hundreds of dollars on the cost of title insurance. However, what these attorneys aren't telling you is that they are often adding another large title fee, disguised as another service, that Lohse Law never charges. This additional title fee adds many hundreds of dollars to your total closing costs (and going straight in their pockets).
What I am seeing is a form of "fee shifting" so that attorney fees and title insurance costs appear especially low. Here's how you can spot this fee. Ask your attorney if they are going to be charging you a "title exam fee" that will be paid at closing. Other attorneys charge $195-$395 for this "exam fee" and likely won't inform you of this fee until it is too late (often the day of closing). Lohse Law does not charge a title exam fee!
In the last week of April 2022, I was part of a transaction where the Seller's attorney charged the Seller $790 for a "title Exam Fee." This was an additional $790 paid directly to the Seller's attorney (on top of their attorney fees and other compensation received from the title company). I can say with a great level of certainty that when the Seller asked what his attorney fees were going to be, this attorney likely didn't mention this $790 "exam fee" to the Seller!
You are not going to be able to compare "apples to apples" properly if you ask your real estate closing attorney, "how much are your legal fees?" Therefore, when comparing real estate closing attorneys, it would be better to ask, "what are the total costs for closing?" or "What will my net proceeds will be after the sale?"
Don't get fleeced by other real estate closing attorneys that are charging this large, and often hidden, closing fee!!