One of the most common ways in which lawyers help clients is by helping them buy and sell homes and with the rental and leasing of homes, apartments and condominiums.
When selling a home or other real estate, it is necessary that contracts be prepared and reviewed, disclosures be prepared and reviewed along with affidavits and closing statements (also called settlement statements or "HUDs". Many other documents such as tax pro ration statements and payoff letters are typically required.
When buying a home or other real estate, it is often the case that financing is utilized through the use of a note and mortgage from a bank, credit union or other lender. In the modern real estate marketplace, the scope of documentation results in a large number of loan documents that must be signed at the real estate closing. It is always best if the borrower has a chance to review these important documents in advance any ask questions before signing them.
Before taking title to real estate in a purchase transaction, it is important to consider how title will be held. In the case of multiple persons buying a parcel of real estate, such as husband and wife, civil union partners and business partners, there are a large number of ways in which title may be held. The legal, personal and tax considerations of these various types of ownership should be considered even before signing the purchase contract.
No one should ever sign a purchase contract without reading it and making certain that all the terms are understood and acceptable.
Real estate contracts contain much more than the purchase price. A residential real estate sale contract guides the sale from start to finish. A contract also addresses what will happen if a party does not follow through with the sale.
No two real estate contracts are alike. There are, however, some terms that apply to most contracts.
A real estate contract should state the amount of earnest money the buyer will pay when the contract is signed. The Seller should deposit the earnest money with their attorney or title company.
The contract must include the dates of closing and possession. The closing date is the day the parties sign all of the documents prepared by the attorney(s) and title company. The possession date is the day the seller completely moves out and gives the keys to the buyer. The closing and possession dates may or may not be the same day.
The contract should state either that the sale is "as is" or that the seller is warranting the condition of the house. In many cases, the contract will present a combination of terms with certain items sold "as is" and others warranted.
Typically, the sale price set by the contract does not include any personal property, such as window coverings, lawnmowers, and fireplace and pool accessories. Additional documents may be required, such as a Bill of Sale, to transfer personal property from the seller to the buyer.
If a buyer is obtaining a loan to buy the house, then the contract should spell out how long the buyer has to obtain loan approval, the amount of the loan and other terms, and what will occur if the buyer cannot get a loan.
The information in this short summary is not intended to be complete or comprehensive. Each real estate sale is different. Contact us today for a contract that meets your needs.
In every residential real estate sale that takes place in Illinois, whether by a real estate agent or a for sale by owner (FSBO) transaction, the seller must disclose information about the property. Illinois and federal law affect the content, delivery, and timing of the disclosures.
There can be significant problems for the seller if all of these disclosures and brochures are not completed honestly and accurately, or if they are not delivered in the manner required under federal and state laws and regulations.
It is not acceptable for sellers and buyers to sign a real estate contract or transfer or accept earnest money prior to proper compliance with all of the legal disclosure requirements.
Illinois requires sellers of any home to deliver a disclosure to the buyers indicating the condition of the home and certain things within the home. If the specific items listed on the disclosure contain defects, then the sellers must provide even greater detail.
The federal government requires the seller of any home built prior to 1978 to execute and deliver to the buyer a disclosure and a brochure disclosing the degree to which the sellers have knowledge of the existence of lead paint in the home.
The State of Illinois requires that the sellers of any home, subject to certain specific exemptions, deliver brochures and a disclosure regarding radon gas.
A Contract for Deed, also called an Agreement for Warranty Deed, is a real estate sale where the buyer makes payments directly to the seller instead of getting a mortgage. Sellers and buyers negotiate the terms with the assistance of their attorneys. When the buyer finished making all the payments to the seller then the seller gives the buyer a warranty deed for the property.
The contract for deed should clearly state the down payment, interest, the monthly payment and what happens if the either party defaults on the contract. It is also common to include other terms found in conventional mortgages.
If the seller has an existing mortgage on the property, the seller should check with their bank, credit union or other lender before entering into a contract for deed. Most mortgages require the seller to get permission from the lender in writing. If the lender does not agree to the contract for deed, the bank could foreclose on the property.
As in any other sale in Illinois, it is essential that title insurance be obtained at the time that the contract is made. Typically it is provided and paid for by the seller. It is a good idea for the title company to hold the deed in escrow so that when the buyer finishes paying off the contract there will not be a problem for the buyer to obtain the deed to the property.
A seller who agrees to a contract for deed assumes significant risk. If the buyer stops making the monthly payment, the seller may have to foreclose on the contract. A foreclosure will take a significant amount of time, attorney fees, and court costs. It is therefore important that careful thought and planning be made at the time the contract is written and signed.
Attorney Kevin W. Tilton is the owner and president of County Title Company. County Title Company has assisted in thousands of real estate transactions and its staff has conducted over 39,000 real estate title examinations. County Title coordinates the complex process behind buying and selling real estate. Whether you are a first-time buyer, a seasoned landlord, or a homeowner unsure about where to start, our experience with real estate agents, homeowners, banks, and credit unions will ensure your real estate deal goes smoothly.
For questions about contracts, deeds, title searches, title insurance, or real estate closings, contact County Title Company today.