How To Prepare For An Illinois Real Estate Closing

How To Prepare For A Real Estate Closing in Illinois

Updated on:
July 7, 2018

In this article, we explain how to prepare for a real estate closing in Illinois. In a previous article, we discussed the first stage of a real estate sale, Attorney Review and Modification of the Contract.  Now we will provide a checklist of tasks that the seller (or the seller's attorney) must handle between the execution of the contract and the closing date. ​

What Disclosures Are Required in Illinois Real Estate Closings? 

Immediately upon execution of the real estate contract, the seller must execute and provide to the buyer certain disclosures regarding the seller's knowledge of potential hazardous conditions in the home.  These include:

  • Disclosure of Radon Hazards;
  • Disclosure of Lead-Based Paint Hazards; 
  • Disclosure of Hazardous Mold; and 
  • The Illinois Residential Real Property Disclosure Report, which requires you to list any known defects to the major structural elements of the home. 

What is a Title Commitment in a Real Estate Transaction?

The seller's attorney will work with a title company to order a title commitment and clear up any issues with the seller's title to the property.  A title commitment is a commitment by a title company to issue a title insurance policy upon closing.  If, after closing, it is determined that the seller did not have the right to transfer the full interest in the real estate to the buyer, the risk will lay with the title company not the buyer.  The seller's attorney, acting as an agent of the title company, will review the property's title history to ensure that there are no liens or encumbrances on the property and that the seller does indeed have free and clear title to the property.  

Who is Responsible for Ordering a Survey in an Illinois Real Estate Closing? 

The seller is typically responsible for ordering a survey of the property.  The survey is a map showing the exact dimensions of the property being transferred.  The buyer's attorney will review the survey to make sure that the buyer is receiving the exact property that he or she expects and that there are no previously undisclosed easements, which are portions of the property reserved for utilities or government purposes. 

What is a Pay-off Letter in an Illinois Real Estate Closing?

The seller will obtain a letter from any lenders currently holding mortgages on the property showing exactly how much must be paid to the lender at closing to satisfy the existing mortgage.  

Dealing with Homeowners or Condominium Associations in Illinois Real Estate Closing

The seller will provide the buyer with letters from any relevant Homeowners or Condominium Association stating that there are no unpaid assessments,  that any right of first refusal for the association to purchase the property has been waived, and proving that any common areas are insured. 

Municipal Inspections as Part of Illinois Real Estate Closings

Some municipalities require that the seller arrange for an inspection by the municipal government prior to closing.  The seller's attorney is responsible for scheduling this inspection and obtaining a letter from the municipality stating that the inspection is complete.  The seller's attorney will also obtain a letter from the municipality showing that all utilities have been paid for by the seller. 

What are Tax Prorations in a Real Estate Deal?

The seller's attorney will review the previous year's property tax information to determine the amount that will be credited to the buyer at closing in the form of a tax proration.  You can learn more about tax prorations by by reading this article: The Top 5 Things to Look Out For in Your Residential Real Estate Contract.  

What Are Typical Closing Documents in Illinois Real Estate Deals?

Finally, the seller's attorney will prepare several documents for execution at closing:

  • The Deed: The document filed with the Recorder of Deeds office that actually transfers title to the real estate from the buyer to the seller. 
  • The Affidavit of Title: A sworn statement by the seller explicitly stating any known legal issues with the property or encumbrances on the seller's title. 
  • Bill of Sale: Essentially a receipt, showing that the Seller received all required payment for the sale of the property.  
  • ALTA Statement: An ALTA statement, like an Affidavit of Title, is the sworn statement of the seller disclosing any known problems with their title to the property, such as unpaid contractors or judgement liens. 
  • Transfer tax forms: Transfer tax forms show the amount paid for buyer as consideration for the property for the purposes of calculating transfer taxes.
  • Settlement Statement:  A settlement statement lays out an itemized list of all of the money and credits changing hands in the transaction including by whom and to whom they are to be paid.  

Presented By O'Flaherty Law

O'Flaherty Law is happy to meet with you by phone or at our offices in Downers Grove, Elmhurst, Naperville, St. Charles, Lake in the Hills and Tinley Park, Illinois.

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How To Prepare For A Real Estate Closing in Illinois
Disclaimer: Our articles and comment responses do not constitute legal advice and are not intended to create an attorney-client relationship.

Please contact us to schedule a free consultation for legal advice specific to your situation.

What is a Title Commitment in a Real Estate Transaction?Who is Responsible for Ordering a Survey in an Illinois Real Estate Closing? What is a Pay-off Letter in an Illinois Real Estate Closing?Dealing with Homeowners or Condominium Associations in Illinois Real Estate ClosingMunicipal Inspections as Part of Illinois Real Estate ClosingsWhat Are Typical Closing Documents in Illinois Real Estate Deals?

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