Chicago Real Estate Contracts
Chicago Real estate contracts involve the purchase, sale, or exchange of a piece of property, and it is a formal agreement between two parties – the buyer and the seller
They form a legal agreement that is clearly stated in the contract, which should always be in writing. As such, both parties are obligated to fulfill the terms in the manner in which the contract has specified, and failure to do so could result in legal action.
Information Inside a Chicago Real Estate Contract
Because it is a legally binding document, real estate contracts must include certain pieces of information. That way, both parties understand what they are expected to do once it goes into effect.
All real estate contracts should include:
- The names of both parties who are involved in the contract (the buyer and the seller). The real estate agent can also be listed as a representative for either party, since they often facilitate the negotiation of the sale.
- The address of the property, as well as a brief description.
- The purchase price that both parties have agreed upon.
- The signatures of both parties.
Everything in the contract must be clearly stated, so there is no confusion in what either party is obligated to do.
Stipulations of a Chicago Real Estate Contract
For a real estate contract to be valid, certain conditions have to be met. Otherwise, it is not considered legitimate. The first and most obvious condition is that the contract shouldn’t call for any illegal activity. Any action performed under the contract must have a legal purpose, so they must not break any laws.
Both parties must be competent, which means that they must be completely aware of what they are signing. They can’t be mentally ill or under the influence of drugs. Obviously, minors are not allowed to enter into a real estate contract because they are considered to be underage according to the law.
All of the terms must be clearly stated in the contract. This includes any rights and obligations, as well as any details related to the terms of the sale. And they must have some value to both parties, which means that a person must not be coerced into a Chicago real estate contract that won’t work to his or her benefit.
The signature on a real estate contract doesn’t have to be notarized, but many recording offices require it for the signature on the deed. Once the contract is signed, it becomes a legally binding agreement, and both parties are obligated to perform the actions that have been stated in the contract. Sometimes certain actions can be relieved by a Chicago real estate attorney, but the process can take several days.
Offer and Acceptance
If a buyer makes an offer, the seller can either accept or reject it. He or she can also make a counter-offer, which can be countered with another one. This process can continue until both parties reach an agreement, or until one of them backs out.
Transfer of Ownership
While a real estate contract is a final agreement in the terms of the sale, it does not transfer the ownership of the property from the seller to the buyer. A deed must be signed over for the transfer to take place. Once that’s done, the buyer is legally responsible for any taxes and liens that are attached to that property, and he or she is also bound to fulfill the terms of the contract. This means that the buyer must deliver on what was agreed upon, which is usually the amount that has been stated as the purchase price.
Contingencies are the conditions of a real estate contract, and they must be met once it is signed by both parties. There are several types of contingencies, and all of them serve specific purposes.
These types of contingencies involve the purchase of the property – specifically, when the buyer must apply for some type of financing. He or she agrees to have a mortgage in place within a certain period of time after the contract has been signed.
These types of contingencies involve the inspection of the property, which is commonly done during the closing of the sale. It will only go through if the inspector doesn’t find any serious problems with the property (such as a roof leak, structural damage, or faulty electrical wiring).
Another Sale Contingencies
These types of contingencies are used if the sale involves another property – specifically, if the sale of a home is needed to finance the one being bought.
These types of contingencies are often used if the buyer hires an appraiser to estimate the value of a property. The sale will only go through if the price is at or below the estimated value that has been determined by the appraiser.
72-Hour Kickout Contingencies
With these types of contingencies, the sale goes through if the person purchasing the property can find another buyer. The seller can still put it back on the market if the buyer gives him or her a 72-hour notice that they are backing out of the contract.
Closing Date and Possession
In addition to the terms of sale, Chicago real estate contracts will specify the closing date, which is when the money is transferred and the deed is signed. This is also when the keys of the property are given to the buyer, which is also called a “transfer of possession.”
The contract will also specify who will pay for the closing costs. This includes any taxes and fees that are associated with finalizing the sale.
In addition to everything that has been stated above, the contract should also have information about the property’s condition; and it should specify whether or not it is being sold “as-is.” Are there any missing appliances (such as an HVAC or furnace), and is any demolition needed?
It should also have information about utility meters, electrical wiring, circuit breakers, and fuses. And the same thing is true for the property’s plumbing. Any information related to water heaters, sinks, toilets, and bathtubs should also be included. And of course, anything that is related to the general condition of the property (such as structural damage) should be in the contract as well.
Using a Chicago Real Estate Attorney
Selling a home can be a complicated matter, and there is a lot that goes into a real estate contract. Once it is signed, both parties are legally bound to the terms of the agreement. If you need legal advice on a real estate contract, feel free to contact us. We have a team of experts that can help you!