Closing and titleClosing and title in Illinois
In the Chicago area, after the contract is signed and before you get the keys, most of the work revolves around “title”: confirming that the seller really has the right to sell, that mortgages and liens on the property will be paid off at closing, and that the buyer receives clean title with title insurance, and finally recording the deed with the county. This stage is usually completed jointly by the buyer’s and seller’s attorneys, the title company and the lender. This article covers the principles and key points; for the overall buying and selling process, see Buying a home in Chicago and Selling a home in Chicago.
How to read a title commitment
A title commitment is a document the title insurer issues before closing, stating that once the listed conditions are met it will issue a title insurance policy on the listed terms. The commonly used format is the ALTA (American Land Title Association) form, which is mainly divided into:
| Part | Contents | What to focus on |
|---|---|---|
| Schedule A | The type of policy to be issued, the proposed insured, the amount of insurance, the estate or interest, the current titleholder of record (vesting), and the legal description of the land | Whether the titleholder of record is the seller you contracted with; whether the address, PIN and legal description match the contract; whether the buyer’s name and form of ownership are correct |
| Schedule B, Part I: Requirements | Conditions that must be met before the policy is issued, such as paying the purchase price, executing and recording the deed and the mortgage, paying off existing mortgages, and providing authority documents for a company or trust | Who will complete each item and how, before closing; if the seller is a company, a trust or an estate, the authority documents are often key |
| Schedule B, Part II: Exceptions | Matters the policy does not cover, such as access easements, building restrictions, the condominium declaration, general exceptions, and property taxes not yet due | Which exceptions are acceptable and which should be removed or receive additional coverage; whether the general exceptions can be removed through a survey and a seller’s affidavit |
The commitment will also list judgments, liens, unreleased mortgages and the like. For items you do not understand, do not assume “the title company will take care of it”; have your attorney confirm whether each will be paid off at closing or whether you will take the property subject to it.
Title insurance: owner’s and lender’s policies
- Lender’s policy: usually required by the lender when you buy with a loan; it protects the lender’s mortgage interest, the coverage amount is generally tied to the loan amount, and it does not protect the buyer personally.
- Owner’s policy: protects the buyer’s own title; within the policy’s coverage, it provides a defense and indemnity for covered title defects. The premium is usually paid once at closing, and the policy is effective while you (or certain heirs) own the property.
An all-cash purchase has no lender’s policy, so the owner’s policy is even more important. Who pays which part of the cost and whether to add endorsements are determined by the contract and the circumstances of the transaction; the attorney checks these when reviewing the contract and the commitment.
The survey
A survey is prepared by a licensed surveyor and shows the lot boundaries, the location of the house and garage, fences, easements, and whether there are any encroachments. Single-family homes and townhouses usually need one; condo units generally do not need a separate survey, and the condominium declaration and recorded plat control instead. The attorney compares the survey with the commitment: whether a neighbor’s fence encroaches, whether a building sits on an easement, and whether the general exceptions in the commitment can be removed on that basis.
Types of deeds
| Deed | Principle | Typical use |
|---|---|---|
| Warranty deed | The grantor gives fairly comprehensive warranties of title; statutory form at 765 ILCS 5/9 | Ordinary home sales by individual sellers |
| Special warranty deed | The grantor warrants only that it did not cause any title defects during its own ownership | Company and bank sellers, new-construction developers |
| Quitclaim deed | Conveys only whatever interest the grantor has at the time, with no warranty of title (765 ILCS 5/10) | Transfers between family members, transfers to one spouse after divorce, correcting names |
| Trustee’s deed | The trustee conveys in the name of the trust; warranties are usually limited | The seller is a land trust or a living trust |
Which deed is used is usually set by the contract. As a buyer, your title protection relies mainly on title insurance, not just the warranties in the deed; the attorney’s review focuses on different things depending on the type of deed.
How to hold title
The form of ownership affects how the property passes at death, how it is handled in a divorce, whether creditors can reach it, and who must sign when you later sell. The principles of the main forms compare as follows (for estate arrangements, see Family law & estate planning; for tax, see our tax section):
| Form | Key points | Watch out for |
|---|---|---|
| Sole ownership | In one person’s name; simplest to deal with | Generally goes through probate at death; property held solely by a married person is not necessarily separate property in a divorce |
| Joint tenancy | When one owner dies, their share passes automatically to the surviving co-owner(s) (right of survivorship); the deed must expressly state that title is held in joint tenancy and not as tenants in common (765 ILCS 1005/1) | The surviving co-owner takes everything, which may conflict with a will; a creditor of any co-owner may be able to reach that owner’s share |
| Tenancy in common | Each owner holds a share, shares may be unequal, and each can leave their share by will; this is the default when the deed does not expressly state joint tenancy | When one owner dies, their share usually goes through probate; co-owners should agree in writing on contributions and sale arrangements |
| Tenancy by the entirety | Available only for property that spouses or civil union partners use as their residence; sale or mortgage requires both signatures; after a divorce judgment it generally converts to a tenancy in common (765 ILCS 1005/1c) | Not available if you are not spouses or the property is not your residence; protection against one spouse’s individual debts has limits and must be assessed case by case |
| Land trust | A common arrangement in Illinois in which a trustee (usually a bank or trust company) holds title while the beneficiaries retain management and income | The beneficiaries do not appear in the public record, but this is not anonymity from the government or the courts; there are fees and formalities, so it should be evaluated separately |
| Revocable living trust | The property is transferred into the trust and handled by the successor trustee at death, avoiding probate; where the spouses are the primary beneficiaries, the effect of tenancy by the entirety can be preserved under statutory conditions | Check the lender’s and title insurer’s requirements for trust ownership, and the application for property tax exemptions; see Living trusts |
| Limited liability company (LLC) | Common for investment and rental properties; separates business liability from your other personal assets | Residential mortgages usually cannot be obtained in an LLC’s name; there are formation and annual report obligations, and an LLC cannot claim the homeowner exemption; see Forming an Illinois LLC |
There is no single “best” form of ownership; the choice depends on marital status, immigration status and tax residency, whether you have children, whether the home is owner-occupied or rented out, and whose money paid for it. If one spouse is not a U.S. citizen, or one is a nonresident for tax purposes, gift and estate tax treatment may differ from that of a couple who are both U.S. citizens, so it is best to work with an accountant (see U.S. tax residency).
Closing documents and settlement
- Settlement statement: usually the ALTA Settlement Statement, listing every amount for the buyer and the seller. If you are buying with a loan, the lender must also give the borrower the Closing Disclosure at least 3 business days before closing.
- Property tax prorations: Cook County property taxes are paid “in arrears,” meaning each year’s tax is paid the following year. At closing, the unpaid taxes the seller is responsible for during its ownership are usually calculated as the contract provides and given to the buyer as a credit.
- Deed and transfer declaration: the seller signs the deed; the transfer requires filing a real estate transfer declaration (PTAX-203) through the Illinois Department of Revenue’s MyDec system.
- Transfer taxes: state, county and city transfer taxes are calculated under their respective current rules. The state and Cook County transfer taxes are usually paid by the seller; the City of Chicago transfer tax has two parts, with the city portion generally paid by the buyer and the CTA (Chicago Transit Authority) portion generally paid by the seller. Whether suburban municipalities impose a transfer tax, and who pays it, varies by municipality.
- Chicago water certification: for a transfer of property within the City of Chicago, the city Department of Finance must first issue a Full Payment Certificate for water and other utility charges; otherwise the city transfer tax stamps cannot be obtained and the deed cannot be recorded.
- Other: the seller’s affidavit of title, the payoff letter for the existing mortgage, disbursement instructions, the condo’s 22.1 documents and a paid assessment letter, and so on.
Recording: the Cook County Clerk’s Office
In Cook County, deeds are recorded by the recordings division of the Cook County Clerk’s Office (the former Recorder of Deeds has been merged into the Clerk’s Office). A recorded deed must state the property’s PIN, full legal description and address, the grantee’s name and address, the name and address to which future tax bills are to be sent, and the preparer’s information, and must be accompanied by the transfer declaration and tax stamps or a statement of exemption. Recording is generally handled by the title company after closing. When you receive the recorded deed, remember to check the names and the form of ownership; you can also sign up for free for Property Fraud Alert on the County Clerk’s website, and you will be notified when someone records a document against your property. For applying for property tax exemptions after closing, see Buying a home in Chicago.
Preventing wire fraud
Closing funds are usually wired, and scammers hack into or impersonate the email accounts of attorneys, brokers and title companies to send “new payment account” instructions. Once a wire is sent, it is very hard to get back.
Sending funds out of China must comply with China’s foreign exchange rules; our firm does not give opinions on Chinese law. On the U.S. side, banks may ask about the source of funds for large wires, so keep complete transfer records and allow time for the funds to arrive.
FinCEN residential real estate reporting rule
The Residential Real Estate Rule of the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) requires that, in residential transfers to an entity or trust that are not financed by a regulated lender (for example, an all-cash purchase in the name of an LLC or trust), a person involved in the closing report information about the transferee and its beneficial owners, among other things, to FinCEN. The rule took effect on March 1, 2026; on March 19, 2026, the U.S. District Court for the Eastern District of Texas vacated the rule in Flowers Title Companies v. Bessent, and FinCEN has appealed to the Fifth Circuit. FinCEN has stated that while the vacatur is in effect, reporting persons are not required to file reports. Accordingly, as of October 2026 the rule is not being enforced. The outcome of the appeal could change this; if you are buying with cash in the name of an LLC or trust, confirm the latest requirements with your attorney and the title company before closing, and have the beneficial ownership information ready.
What the attorney does at this stage
- reviews the title commitment and survey item by item, communicates with the other side’s attorney and the title company about exceptions and requirements, and raises objections where necessary;
- confirms with you the grantee names and form of ownership before the deed is finalized;
- when representing the seller, drafts the deed, prepares the seller’s affidavit, arranges the payoff of the existing mortgage, and handles the transfer declarations and Chicago water certification;
- checks every amount on the settlement statement, including property tax credits, assessments and who pays the transfer taxes;
- attends closing, and for clients who are out of town or abroad, arranges signing and notarization of documents in advance (see Overseas buyers and sellers).
Common situations for Chinese-speaking clients
- How names are written: the English name and middle name on your passport, driver’s license, loan documents and deed should match; spelling differences can cause trouble later when you sell or when the property is inherited.
- Parents pay and a child is on title (or the reverse): this may involve gift tax reporting and later inheritance issues, so confirm with an accountant before closing.
- One spouse is abroad: tenancy by the entirety requires both spouses’ signatures, so arrange a power of attorney or notarization abroad in advance.
- Considering estate planning when you buy: buying directly in the name of a living trust is often simpler than transferring the property in later.
Common misconceptions
- “I have title insurance, so I don’t need to read the commitment”: the exceptions are exactly what the insurance will not pay for.
- “If a married couple puts both names on the deed, it is automatically tenancy by the entirety”: the deed must expressly state the form of ownership.
- “After closing I can just change the names myself with a quitclaim deed”: this may affect your mortgage, title insurance and property tax exemptions, and may even have tax consequences.
What we can do
- explain the title commitment, survey and settlement statement in Chinese, and handle title issues on your behalf;
- help you choose a form of ownership in light of your family and tax situation, working with your accountant;
- represent the buyer or seller through closing, the transfer declarations and recording-related work;
- arrange a remote signing process for clients who are abroad.
Frequently asked questions
What is the difference between the title company and the attorney?
The title company performs the title search, issues the commitment and the policy, and often acts as the closing agent, receiving and disbursing funds; it does not represent the interests of either the buyer or the seller. The attorney represents you personally, reviews the contract and title documents, and raises objections and negotiates on your behalf.
Can I skip the owner’s policy?
The lender’s policy protects only the lender. Whether to buy an owner’s policy is your decision, but it is the main source of a buyer’s title protection, especially in an all-cash purchase. Who pays for it is set by the contract.
Can unmarried partners use tenancy by the entirety?
No. Illinois allows only spouses or civil union partners to use this form for property that is their residence; where the requirements are not met, the law treats it as a joint tenancy. Unmarried partners usually choose between joint tenancy and tenancy in common.
How long after closing will I get the recorded deed?
It depends on the county’s processing time and when the title company submits it, and it varies by transaction. You can look up recorded documents on the County Clerk’s website.
Can I transfer the home into a trust or LLC after closing?
Yes, but first look at the loan terms, whether title insurance coverage continues, property tax exemptions and transfer declarations, and whether the FinCEN reporting rule is triggered, among other things. It is best to decide on the form of ownership before you buy.
What if I discover after wiring that I sent the money to the wrong account?
Immediately contact your bank to request a recall, notify your attorney and the title company at the same time, and file a report with the FBI’s IC3. The faster you act, the better the chance of recovery, but recovery cannot be guaranteed.
Official sources
- 765 ILCS 1005/1 (joint tenancy must be expressly declared)
- 765 ILCS 1005/1c (tenancy by the entirety)
- 765 ILCS 5/10 (quitclaim deeds)
- 35 ILCS 200/31-10 (Illinois real estate transfer tax)
- Illinois Department of Revenue: transfer declarations and MyDec
- Cook County Clerk’s Office: recording FAQs
- Cook County Property Fraud Alert sign-up
- City of Chicago real property transfer tax
- City of Chicago Full Payment Certificate
- FinCEN: Residential Real Estate Rule FAQs
- CFPB: protecting yourself from mortgage closing wire scams
- FBI Internet Crime Complaint Center (IC3)
Related reading
- Buying a home in Chicago
- Selling a home in Chicago
- Overseas buyers and sellers
- Living trusts
- Forming an Illinois LLC
Can’t make sense of the title commitment, or haven’t decided whose name to hold title in? Whether you are buying or selling, have an attorney look at the contract and title documents first. Book an attorney evaluation, or call (312) 519-1115.
This page is general information, not legal or tax advice. Real estate transactions are governed by Illinois law and county and city rules; contract terms, taxes, fees and closing requirements may change, and outcomes depend on the specific facts. Consult an attorney before signing and rely on official sources. Our firm provides real estate transaction services under Illinois law.