Buying a home is an exciting milestone, but it also involves a series of complex legal steps that can feel overwhelming—especially for first-time buyers. From making an offer to signing the final closing documents, every stage of the home-buying process comes with important legal considerations that can affect your financial security and property rights.
Eric Sander, a seasoned Chicago real estate attorney, helps buyers navigate these legal complexities to ensure a smooth and successful transaction. Below, he breaks down the key legal steps involved in purchasing a home and offers expert insights on how to avoid potential pitfalls.
1. Making an Offer: The First Legal Step
Once you’ve found the perfect home, the next step is submitting an offer to the seller. This is typically done through a formal purchase agreement, which serves as the legal foundation of the transaction.
Key Legal Considerations:
- The offer should outline the purchase price, contingencies, and timelines for the transaction.
- Earnest money—typically 1-3% of the purchase price—may be required as a good faith deposit.
- Contingencies, such as financing and home inspection clauses, protect buyers from being locked into a deal with hidden issues.
“I always advise my clients to include well-drafted contingencies in their offer,” says Sander. “This provides an exit strategy if something unexpected comes up during inspections or financing.”
2. Offer Acceptance and Contract Review
Once the seller accepts the offer, both parties sign a purchase and sale agreement (PSA), making the deal legally binding. This contract details everything from closing dates to what fixtures stay with the home.
Attorney’s Role in This Step:
- Reviewing the contract for any unfavorable terms or hidden clauses.
- Ensuring compliance with Illinois real estate laws.
- Negotiating any changes to protect the buyer’s interests.
“Buyers often overlook contract details that can come back to haunt them later,” Sander warns. “Having an attorney review the agreement can prevent costly mistakes.”
3. Home Inspection and Due Diligence
After signing the contract, buyers have a limited time (typically 5-10 days) to conduct home inspections and further due diligence. This is a crucial step, as it helps uncover potential issues with the property.
Legal Aspects of Due Diligence:
- If the inspection reveals major issues, buyers may be able to negotiate repairs or price reductions.
- If the seller fails to disclose known defects, legal action may be necessary under Illinois disclosure laws.
- Reviewing the title report to ensure the property has no legal claims, liens, or boundary disputes.
“Skipping the due diligence phase is a huge risk,” says Sander. “It’s better to address issues before closing rather than face unexpected problems later.”
4. Securing Financing and the Mortgage Process
For buyers using a mortgage, securing final loan approval is a critical step. Lenders will require an appraisal, credit checks, and verification of financial documents before issuing a loan commitment.
Legal Steps in the Mortgage Process:
- Reviewing the loan agreement to ensure fair terms and interest rates.
- Making sure the financing contingency protects the buyer if loan approval falls through.
- Ensuring lender compliance with federal mortgage regulations.
“Financing issues can delay or even derail closings,” Sander notes. “A strong contract should have safeguards in place in case the buyer’s mortgage isn’t approved on time.”
5. Preparing for Closing: Final Legal Review
As the closing date approaches, buyers must review and sign various legal documents, including the Closing Disclosure (which outlines final loan terms) and the HUD-1 Settlement Statement.
Eric Sander’s Closing Checklist for Buyers:
✅ Review the title insurance policy – Ensures the buyer is protected from past ownership claims.
✅ Verify closing costs – Confirms all fees, including lender charges and property taxes, are accurate.
✅ Ensure all agreed-upon repairs were completed – A final walk-through is essential.
✅ Confirm all contingencies are satisfied – Any unresolved issues must be addressed before signing.
“Many buyers assume closing is just a formality,” says Sander. “In reality, it’s one of the most critical legal steps. One overlooked detail can lead to costly surprises down the road.”
6. Closing the Deal and Receiving the Keys
On closing day, buyers will sign all final documents, including the deed, loan agreement, and settlement statement. Once the lender funds the loan and the title is officially transferred, the deal is complete!
Post-Closing Legal Considerations:
- Ensuring the deed is recorded with the local county office.
- Reviewing warranties and disclosures to address any post-closing concerns.
- Understanding property tax obligations moving forward.
“Even after closing, legal issues can arise,” Sander explains. “I advise buyers to keep all closing documents safe and contact their attorney if any disputes emerge later.”
Final Thoughts: Why Legal Guidance is Essential in a Home Purchase
From negotiating the initial offer to signing the final documents, buying a home is a legal process that requires careful attention to detail. Even minor mistakes in contract wording, financing terms, or title paperwork can lead to costly problems.
Eric Sander helps Chicago homebuyers understand their rights, avoid legal pitfalls, and ensure a smooth closing. Whether you’re a first-time buyer or a seasoned investor, having an experienced attorney by your side can make all the difference in securing your dream home with confidence.
If you’re planning to buy a home in Chicago, consider consulting with a real estate attorney early in the process to protect your investment and navigate the legal complexities with ease.