Residential Real Estate

Residential Real Estate Transactions in Illinois

Real estate transactions in Illinois follow specific processes and regulations.

Here is an overview of key aspects involved in residential real estate transactions in Illinois-

·         Agency Relationships – In Illinois, real estate agents must disclose their relationship with buyers and sellers. They can represent the seller (acting as listing agent), the buyer (acting as the buyer's agent), or both parties (dual agency). It's essential for all parties involved to understand the nature of their representation.

Purchase Agreement – A written contract, typically using the Multi-Board Residential Real Estate Contract (referred to as the Multi-Board 7.0 contract), or The Chicago Association of Realtors contract (referred to as the CAR contract) is used to outline the terms of the sale, including the purchase price, closing date, earnest money, lender (if financed), contingencies, and other essential details. Once both parties sign the contract it becomes legally binding.

·         Disclosures – Sellers are required to disclose certain information about the property's condition, or state upfront that there are no disclosures about the property's condition. If provided, disclosures would outline any known issues, such as structural problems, water penetration, environmental hazards, or any other latent defects.

·         Attorney Review – On the most common Residential real estate contract (the Multi-Board 7.0 contract), each party has five (5) business days after the Date of Acceptance to a) approve this contract; or b) disapprove this contract, which disapproval shall not be based solely upon the purchase price; or c) Propose modifications to this Contract, except for the Purchase Price, which proposal shall be conclusively deemed a counteroffer notwithstanding any language contained in any such proposal purporting to state the 141 proposal is not a counteroffer. If after expiration of ten (10) business days after the Date of Acceptance, written agreement has not been reached by the Parties with respect to the resolution of all proposed modifications, either Party may terminate this Contract by serving Notice, whereupon the Contract shall be immediately deemed terminated; or

·         Offer proposals specifically referring to this subparagraph (d) which shall not be considered a counteroffer. Any proposal not specifically referencing this subparagraph (d) shall be deemed made pursuant to subparagraph (c) as a modification. If proposals made with specific reference to this subparagraph (d) are not agreed upon, neither Buyer nor Seller may declare this contract null and void, and this contract shall remain in full force and effect.

·         It is important to note that if Notice of disapproval or proposed modifications is not served within the time specified herein, the provisions of this paragraph shall be deemed waived by the Parties and this Contract shall remain in full force and effect. If Notice of termination is given, said termination shall be absolute and the Contract rendered null and void upon the giving of Notice, notwithstanding any language proffered by any Party purporting to permit unilateral reinstatement by withdrawal of any proposal(s).

The attorney review period is essential to ensure you minimize your risks and maximize your savings. Knowing the essential components of attorney review can save you thousands of dollars on taxes, repairs, and other associated closing costs.

·         Home Inspections – Buyers usually have a time-sensitive right to conduct inspections of the property to identify any issues that may affect their decision to purchase the property. Inspections may cover areas like the structure, plumbing, electrical, roofing, HVAC, and more. Based on inspection results, buyers can negotiate repairs or credit with the seller, or if necessary, cancel the contract if an agreement cannot be reached.

·         Financing – Most buyers require financing to purchase a home. They can secure a mortgage from a lender, and the terms of the loan (interest rate, length of mortgage, down payment, etc.) are usually specified in the purchase agreement.

·         Title Search and Title Insurance – A title search is conducted to ensure the property's title is clear of any liens, disputes, or encumbrances. Title insurance is typically purchased to protect the buyer and lender against any unforeseen issues regarding the title of the subject property.

·         Closing Process – During the closing, both parties (buyer and seller) sign all necessary documents to transfer ownership of the property. The buyer pays closing costs (unless a credit is negotiated), and the seller receives the process from the sale. This is most often done at a title company and all funds are typically wired to/from the appropriate parties. Generally, a closing agent and attorneys representing both parties oversee this process.

·         Property Taxes and Escrow – Property taxes in Illinois are paid semi-annually. In some cases, property taxes are collected in an escrow account as part of the monthly mortgage payment, and the lender pays them on the homeowner's behalf.

Put the Castle in Your Corner for All Your Legal Needs

Remember that real estate laws and procedures at both the state and local levels can vary, so it's advisable to work with a qualified real estate agent, your Castle Law attorney, and other professionals familiar with Illinois real estate transactions to ensure compliance with all legal requirements and to facilitate a smooth transaction.