Search properties now
We're Here: 312.265.8000

REAL ESTATE TERMS & DEFINITIONS

Home Buying FAQs

The home buying process starts well before seeing properties. We've compiled answers to our most frequently asked questions for every Chicago home buyer. Have more questions? Contact one of our Chicago real estate agents for expert advice.

It is a database of real estate for sale used by Realtors. The Chicago MLS has great search functionality that allows for you to find listings according to specific parameters. For more information, please visit our Chicago MLS page.

Your Dream Town Realtor® will refer you to a mortgage broker who will be happy to pay your closing costs. However, this may affect your interest rate. Another way is to have your Dream Town Realtor? negotiate that the Seller pay your closing costs. This will ultimately be reflected in your purchase price. Either way, you are rolling your closing costs into your mortgage... saving about $4,500 in up-front costs on a $300,000 purchase.

There may be, if you take two mortgages: one for 80% of the purchase price, another for the difference between what you want to pay down and 20%. For instance, if you want to pay 10%, you'd try to get a second mortgage of 10%. Since your first mortgage is for only 80%, the lender won't require mortgage insurance.

Yes. Having a Realtor® represent your interests is just as vital in purchasing an unlisted property as in a more typical transaction. Most "do-it-yourself" Sellers welcome Buyers' Realtors? and are willing to pay their commissions in order to make the complex transaction easier.

If the property will be the primary residence of the co-signator, that person can apply for the loan and disclose the same financial information you are disclosing. If he will not be residing there - for instance, a parent helping a child buy a property - most lenders will find a way to make him liable for the debt and thereby enable the loan.

Some lenders will insist on it and others will refuse. They are holding your money in an escrow account without paying interest, so it costs you a little. But it saves you a lot of trouble - and if they are late paying property taxes, which can be confusing, they pay the penalties.

Even though the city has seen to it that everything's up to code, and the builder or developer may give you a warranty, have a home inspection anyway. Your inspector can help you develop a list of minor repairs or corrections that need to be completed by the builder / developer either before you take possession, or within a specified time after.

No. Your interest and taxes are deductible just as in a freestanding single-family residence, but not your monthly assessments.

When you enter the market looking for a home, it is essential that you have a professional and experienced Buyer's Realtor? as a sounding board and ally. Home Sellers' Realtors? represent the Seller's interests; they are contractually obligated to work toward an optimal price for the Seller. In contrast, a Dream Town Buyer's Realtor?, as your committed advocate, is dedicated solely to your best interests and to finding your dream home. Our services are free to you, as the Seller pays all commission costs.

Applying for a mortgage usually takes about 60 days, but can be anywhere between 30 and 90. It usually depends on how quickly the lender can get an appraisal of the property, a credit report, and employment and income verification.

Your first mortgage payment is usually due 30 days after closing - the date will be included in your closing documents.

Your monthly payment covers principal and interest on the loan, and may also include your mortgage insurance, property taxes and hazard insurance, depending on the terms of your loan.

Fees paid by a condominium owner to the condominium association to cover protection and maintenance of common areas, or by a homeowner in a townhome or gated community to the homeowner's association. Also the statistic used by local governing agencies to determine your property tax.

Depends on your financial situation, which lender you use and what type of loan you select. See the Chicago Buyer's Guide for more information.

This depends on the details of your contract. The contract must state under which contingencies or circumstances the buyer will be refunded the earnest money. Even then, there may be third party fees for things such as appraisals or legal costs that will diminish the amount returned.

Yes, depending on what contingencies are written into your contract. Talk to your Realtor? about what contingencies should be included in your contract. You also have a window of five business days for attorney review where you will not suffer any cancellation fees.

Conditions - or "safety valves" - written into real estate offers and contracts to protect the buyer.

Yes, speak with your Dream Town consultant for recommendations of reliable and skilled service providers in your area. Your Dream Town consultant is in no way compensated for making referrals.

Check out the Chicago Police Department's website for detailed information on crime statistics for the City of Chicago and for your specific neighborhood.

Even economists don't know the answer to this one. Our home appreciation chart shows the typical appreciation on a $300,000 home with 30-year loan at 10% down and current interest rates.

  • Select a Realtor? - buyers' representatives work for you, putting your best interests first.

  • Decide whether buying is the right choice for you - weigh advantages of owning versus renting.

  • Set your price range - determine affordable monthly payments based on your net worth and down payment.

  • Secure a lender - free prequalification followed by pre-approval then, choose the suitable mortgage for you and apply for your loan.

  • Negotiate your purchase - your Realtor? will help you create, present and negotiate your purchase offer.

  • Make sure everything is in order - legal review of contract, home inspection, property appraisal.

  • Close the deal - title, walk-through, closing fees, home-owner's insurance.

  • Move in - select a moving company, change-of-address forms, contact new service providers, etc.

Funds needed at the time of closing in addition to the down payment.

Real estate agents are self-employed. They make a commission off the selling price of the home only if the transaction goes through. The seller pays the commission - it is not a buyer's expense. Historically, the commission is between four and seven percent, which is split with the broker. Overhead costs are also taken out of the commission before the Realtor? is paid. In addition, any other expenses such as MLS membership fees, insurance costs, gasoline/car, etc. must be paid out of the remaining money.

Attorney's fees are dependant on the specialization of the attorney and the size of the housing unit. The rate is higher for new construction as opposed to existing homes. Attorney's fees are paid at closing. Having an attorney review your contract is generally a contingency of the purchase offer that must be met.

It is recommended to have any home you are going to buy inspected. Some lenders request a home inspection. Dream Town requires a buyer to sign a waiver if they do not want to have a home inspected. An inspector can also help you develop a list of minor repairs or corrections that need to be completed by the builder/developer before you take possession, or within a specified time thereafter.

Offer an amount you feel comfortable with - that also leaves room for negotiation. Start low to give yourself leeway for the seller's counter offer. If you start too high, the counter offer may be out of your range.

Don't worry about insulting the seller - this is business. The seller can always come back with a counter offer or refuse the offer altogether.

The deposit the buyer makes along with an offer to the seller, held by the seller's Realtor in escrow until closing and applied to the down payment at closing. The buyer usually pays $1,000 with the offer and the balance within expiration of attorney review and home inspection.

Check out our Chicago Schools section for all the information you need.

Top