Buying a house in Illinois is more complicated than simply finding your dream home and moving in. You’ll want to take the time to determine how much you can afford to spend, where the ideal neighborhood for you might be, and what features you want in a home. It’s also crucial that you understand key legal issues in your state, such as those involving seller disclosures and purchase contracts.
With proper preparation, careful choice of a real estate agent, and prudent use of other qualified professionals, buying a home in Illinois should be a positive experience.
Before buying a house, condo, or other type of property in Illinois, you’ll probably want to contact a real estate agent. That person can help you locate the best home for your needs and handle all the complex procedures involved with the purchase. Some of the benefits of using a real estate agent include his or her:
Your agent should be able to help you every step of the way, from drafting your written offer and negotiating with the seller on price and other key terms to coordinating the escrow process and house closing. Your real estate agent should also help you locate other professionals to assist you in the home-buying process, including mortgage brokers and home inspectors.
The best news is that working with a real estate agent won’t cost you anything. The seller usually pays the entire real estate commission (typically 5% to 6% of the house sale price, split between the seller’s agent and yours).
Personal referrals from other home buyers are usually the best way to select a real estate agent. You can find licensed Illinois real estate agents at the Illinois Department of Financial and Professional Regulation’s website. Other useful resources include real estate websites such as Zillow and Trulia, which offer customer reviews of real estate agents.
Be sure the agent you choose has ample experience representing buyers (not just sellers), good references, and qualifications to meet your house-buying needs in terms of your ideal location, type of property, and budget.
State law in Illinois (765 Illinois Compiled Statutes §§ 77/5 and following) requires sellers to give buyers a filled-out disclosure form, which includes details on material defects or risky conditions or situations such as cracks in the foundation, unsafe drinking water, disputes with neighbors over boundary lines, past meth lab use, or a termite infestation, if they would affect the value of the property or the health or safety of occupants.
Certain types of sales (such as newly built homes) are exempt from state disclosure rules.
To assist sellers, the Illinois Association of Realtors offers a disclosure form.
Illinois also requires sellers to provide radon disclosure (see the Disclosure of Information on Radon Hazards form). The Illinois Emergency Management Agency recommends that buyers have the house tested for radon before purchasing. A licensed radon mitigator can easily correct high levels of radon found in the house.
Seller disclosures are important for you as a buyer, since just looking at a property may not be enough to tell you what problems its owner encountered while living there or might arise in the future due to existing concerns.
In addition to state-required disclosures, sellers of houses built before 1978 must comply with federal Title X disclosures regarding lead-based paint and hazards. See the lead disclosure section of the EPA’s website for details.
For more details on seller disclosures, see How to Sell Your House: The Key Steps.
Buyers should not rely solely on the home seller's disclosures, but should hire an independent home inspector to examine the property. Even after having lived in the property, the seller is unlikely to know all its troubles, particularly if the attic or subspace is difficult to access.
A well-written inspection report will discuss problems as far ranging as the heating and cooling systems, electrical systems, plumbing, walls, drainage, basement, foundation, and flooring.
Many buyers include a clause in their offer making the sale closing contingent upon a satisfactory inspection report. This makes sure that if any unacceptable material defects exist on the property, the buyer has a chance to renegotiate or cancel the sale.
See Reasons to Get a Pre-Closing Home Inspection for details.
A purchase agreement is a legal document containing important terms and conditions of your real estate transaction. It must be in writing and signed by both parties (buyer and seller), and include an offer to sell or purchase, an acceptance of the offer, the sale price, and an adequate description of the property.
See the Chicago Association of Realtors Residential Real Estate Purchase and Sale Contract for a sample. As the buyer, you will normally be the first one to prepare the form, as your purchase offer.
Illinois is considered an attorney-review state. This means that it is customary for both parties to have a real estate lawyer look over the purchase agreement before it is finalized. The purchase agreement will have terms regarding how many days each party has for the attorney review (typically five days) and what happens if the attorneys fail to reach an agreement during this time.
Ordinarily, both parties can walk away from the purchase agreement with no penalty during this review period. The attorneys will review the entire agreement and can propose modifications to any part of the agreement except the purchase price and the broker's fees. The attorneys are likely to propose modifications after the house has been inspected, so the attorney review period and the house inspection tend to happen during the same time frame.
A buyer should always obtain a title search from a title company before purchasing a home. The company searches public records and other sources for any liens, easements (such as the utility company’s right to access part of the property), or other encumbrances or title restrictions that may affect ownership or use of the property.
Under the Illinois purchase contract, the seller is expected to correct those problems as a condition to closing.
If your mortgage lender doesn’t already require it, you should also consider purchasing a title insurance policy to protect your title to the property against adverse claims by third parties, or any clouds on the title missed by the title search.
Although Illinois does not require buyers to use a lawyer to prepare the purchase agreement and other paperwork related to buying a house, state custom does require that an attorney review the purchase agreement before finalizing the purchase.
You may also want to work with an attorney in special situations, for example if purchasing a house jointly with others and in need of help structuring your co-buyer agreement. Or, you may need a lawyer if problems show up during escrow or the house closing.
Check out our lawyer directory to find an experienced real estate attorney in Illinois.
This website's Residential Real Estate section includes a variety of useful articles on all aspects of the house-buying process, including advice on getting a mortgage, figuring out what price, contingencies, and other terms to offer, arranging home inspections, and closing the deal.
