Earnest money Earnest money is a sum of money that the buyer puts down with the contract to purchase. It is held by the listing broker as a third party to the benefit of both parties – once a contract has been accepted by both sides and the earnest money deposited the right to purchase is with that buyer. The more earnest money the buyer puts down, the more “earnest” they seem to the sellers.
Down payment This is the amount of money that the Buyer has to come out of pocket with to purchase a property. Depending on the kind of mortgage obtained, this can range between 3.5 % (FHA) to 25 % or more. With 20% or more, the buyer will avoid private mortgage insurance (PMI)
Coop vs condo Some buildings are cooperative ownership form, some are condominiums. In a coop, you own a share in the building, taxes are usually part of the assessments collected by the coop. In a condominium, the owner actually owns the actual unit and pays individual property taxes.
Buyer’s closing costs Buyer’s closing cost consist of lender’s fees (application fee, appraisal – varies by lender and type of mortgage), title charges and taxes – Buyer traditionally pays the city transfer stamps. Buyer also pays for a home inspection and his/her attorney.
Appraisal Appraisals are done by independent appraisers to establish value of a property on behalf of the lender. Cash buyers may want to hire an appraiser for themselves to check value.
Home inspection Every buyer is strongly encouraged to hire a home inspector, who will inspect the property the buyer has offered to purchase, and make sure there are no major concerns in the home. Price for the home inspection usually range from $ 250 to $ 1500 depending on the size and kind of property
Property taxes Property taxes in Cook County are paid in arrears, so in 2011 you pay the taxes for the year 2010. Therefore, when a property is sold, the Seller usually gives the Buyer a credit for the taxes that the Seller owes for the time he/she owned the property. Since those exact taxes are often not known at the time of the closing, Seller often gives Buyer 105-110 % of the last ascertainable taxes.
Disclosure Legally required forms the Seller fills out to disclose any known material defects of a property, the presence of lead based paint, radon or mold. The buyer will be given these disclosures and need to sign them as well.
Special assessments In cooperative or condominium buildings the board may decide to collect special assessments to pay for major repair and improvements of the building, such as new roofs, tuck pointing, windows, new boiler, landscaping, porches or elevators.
Buyer’s agent A Buyers agent represents the buyer, shows the buyer property and helps negotiate a contract, assists with home inspection and facilitating the mortgage process for the buyer. Choose your buyer’s agent with care: At MetroPro we are all highly trained to work with buyers.
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