While it’s not strictly required, we’d estimate that nearly all buyers and sellers are represented by an attorney during real estate transactions here in Illinois. It’s common practice, particularly when it comes time to close on a sale, and it just makes sense.
With that said, occasionally buyers and sellers new to the process in Chicago are reticent to bring on an attorney at closing. After all, they argue, it’s just one more fee! But attorneys are essential to the closing process in Illinois. They sift through an enormous amount of paperwork, help negotiate contracts, and have a working knowledge of taxes and law that is vital to making sure that you get the fairest possible deal, whether you’re a buyer or seller.
That idea of fairness is important! Attorneys are crucial go-betweens and mediators in the real estate process, particularly when the interests of buyers and sellers are at odds – which is only natural in an exchange where buyers tend to want to spend as little as possible while sellers want to make as much as they can, with each side's broker trying to negotiate for their party.
On the other hand, once you’ve contracted an attorney – generally for a flat fee ranging between $400 to $800 – you have an advocate and counselor whose sole motivation is looking out for your best interests. It’s also a matter of different knowledge and skill sets, at the end of the day. Brokers and attorneys are both knowledgeable about real estate, but in different ways. Dentists and cardiologists both work on the human body, but would you trust a tooth specialist for your heart surgery?
And all of this is to say nothing of the actual work that an attorney will do on your behalf. Just what do real estate attorneys actually do once you retain their services?
For Sellers
As a seller, your attorney will be responsible in helping with a title search (which verifies that the seller, has a clear title on the home).
The real estate attorney will also order title insurance, order a plat of survey for single family homes or fee simple townhomes (i.e., in cases where the property is not a condo). Moreover, attorneys calculate a closing statement, schedule the closing meetings, and help with negotiation of inspection findings and proration of taxes, all during the attorney review period, typically a week or two from contract.
For Buyers
Buyers’ attorneys work on the same tasks, just from the flip side of the coin. The buyer’s attorney will perform a title search, and help the buyer with the proration of property taxes and condominium/homeowners assessments. In some cases, the buyer’s attorney also holds onto “earnest money,” the good faith payments that show the buyer’s commitment to the purchase; it is more common, however, for the listing broker to hold onto the initial and balance of earnest money than for the attorney to do so.
Perhaps even more importantly, the attorneys for both sides will use the attorney review period to negotiate any proposed contract changes, remedy requests following an inspection, and any other contract language change requests that may impact the sale. The attorneys will report all of this back to their clients; during the closing process, the brokers tend to take a back seat, meaning that the real estate attorney spearheads the process and will be a main point of contact when it comes to contracts and documentation.
At Closing
Once the details have been hammered out, the buyer will go through the process of getting an appraisal and securing a loan. When the buyer is cleared to close, the buyer’s and seller’s attorneys will get in contact once more to set the closing date, time, and location. Both attorneys will also need to inform their clients of the final estimate of numbers (including cash flow, closing costs, and other final financial figures).
At closing, the buyer’s attorney will be present with the buyer to walk through the last of the paperwork. The seller’s attorney will also be present; more often than not, the attorney will have the seller pre-sign paperwork or grant power of attorney to sign anything required at the closing table, expediting the process and sparing the seller from last-second stress.
Looking for an attorney to join your real estate team? Check out our referrals page, where we recommend attorneys that we’ve had success working with in the past.
Want to get in touch about any other aspect of buying or selling a home in Chicago? Don’t hesitate to drop us a line! Our team is here and always happy to help set you down the right path.
