The home buyers FAQ

Less than most people think. Plenty of buyers here put down 3 to 5 percent using conventional first-time programs, and FHA loans start at 3.5 percent. Twenty percent is not a requirement, it is just the point where mortgage insurance drops off. Putting less down and keeping savings for the move is often the right call, and a good lender will show you the trade-offs side by side.

Budget somewhere around two percent of the price on top of your down payment. The big pieces: your attorney (a flat fee, often around $650), title and lender charges, the city transfer stamp that buyers pay in Chicago ($3.75 per $500 of price), and the tax and insurance escrows your lender sets up. We walk you through the exact number for any property before you offer.

A pre-qualification is an estimate from numbers you say out loud. A pre-approval means a lender verified your income and savings, and it is the one sellers take seriously. It also tells you your true budget before you fall for something above it. A pre-approval typically lasts about ninety days, so there is no need to rush it until you are close to touring seriously.

Earnest money is a good-faith deposit that goes into an escrow account when your offer is accepted, not into the seller’s pocket, and it is credited back to you at closing, so it is really part of your down payment arriving early. The contract’s contingencies, financing, inspection, attorney review, are what protect it along the way.

The full number is PITI: principal, interest, property taxes, and insurance, plus assessments if it is a condo. In Chicago the tax piece alone can add a few hundred dollars a month, so that full number, not just principal and interest, is the one to hold against your rent. Our rent vs. buy calculator counts all of it.

Cook County bills taxes about a year behind, so at closing the seller credits you for the months they owned but have not been taxed on yet, which quietly lowers your cash to close. After you move in, applying for the homeowner exemption on your primary residence trims the bill going forward.

Chicago has a rhythm to it: we write the offer on the Multi-Board contract, then comes attorney review, the five business days when the lawyer on either side can adjust terms or call it off. It sounds nerve-wracking and it is your protection. Then earnest money goes to escrow, the inspection window opens, your lender orders the appraisal, and you close. The whole path is written out in our buyer’s guide and the contract, explained line by line.

The seller’s agent works for the seller, so yes, you want your own. Before touring in earnest you sign a short agreement that spells out exactly how your agent is paid; in many deals that compensation is still covered through the sale, and either way you see the numbers in plain sight before signing anything. Here are 101 concrete things we do for buyers.

Your inspector spends a few hours on safety, structure, plumbing, electric, and HVAC and hands you a full written report. Fees typically run $300 to $1,000 depending on the property, paid directly to the inspector, and it is one of only two out-of-pocket costs before closing (the appraisal is the other). We recommend adding a radon test, and being there for the last half hour.

It happens, and it is a negotiation, not a dead end. The seller can lower the price, you can cover the gap, or you can meet in the middle; your financing contingency protects you while that plays out. We have walked many buyers through exactly this.

Not until you are under contract on a specific home, so the daily rate headlines while you shop are mostly noise. When you find the place, that is when we lock, and your lender will show you the options, including paying points or floating.

The search takes as long as it takes, weeks for some buyers, seasons for others, and there is no prize for rushing. Once you are under contract, plan on roughly four to eight weeks to keys with financing, faster with cash.

The building’s finances matter as much as the unit. Ask for the reserve fund balance, the percentage of owners versus renters, any planned special assessments, and the last year of board minutes. A thin reserve today can mean a surprise bill next year. Our questions to ask page has the full checklist we use.

One more word to know: warrantable. If a building fails the lending agencies’ rules, thin reserves, certain litigation, major deferred maintenance, standard conventional financing gets hard and the buyer pool shrinks. We have the lender vet the building through its condo questionnaire the same day you write the offer, so a financing surprise never arrives in week three.

A two-flat is a Chicago classic: one building, two apartments, one owner. Live in one unit and the rent from the other can count toward qualifying for the loan and then pays a chunk of your mortgage. It is how a lot of Chicagoans afford more building than they expected. Our field guide to Chicago buildings covers what to look for.

Chicago’s vintage stock, greystones, two-flats, courtyard condos, offers character and space that new construction rarely matches, at the price of older systems that deserve a careful inspection. New construction trades charm for warranties and low maintenance. There is no wrong answer, only a right answer for you, and we will give you our read on any specific building.

Run the math. Our rent vs. buy calculator counts closing costs, taxes, maintenance, and what your down payment would earn elsewhere, so it will happily tell you to keep renting when that is the truth. And the renters FAQ covers your rights in the meantime.