Illinois Real Estate Contract: Different Types and Key Terms to Include

What is an Illinois Real Estate Contract?

An Illinois real estate contract is a legally binding document that outlines the terms and conditions of a real estate transaction between a buyer and a seller. It typically includes information like the purchase price, closing date, property address, and any contingencies or conditions that must be met before the sale can be completed.

The contract is usually prepared by a real estate agent or attorney and is reviewed by both the buyer and the seller before it is signed. It is vital that both parties understand the terms of the contract and any potential risks or liabilities before signing.

In Illinois, real estate contracts must comply with state laws and regulations, including the Illinois Residential Real Property Disclosure Act, which requires sellers to disclose any negative conditions or issues with the property that could affect the property value.

Common Illinois Real Estate Contracts

There are two contracts that are regularly used in real estate transactions in Illinois:

• Chicago Association of Realtors Contract . Used by realtors who are members of the Chicago Association of Realtors when selling or purchasing single family homes, townhomes, or shared community associations.
• Multi-Board Realtor Contract . A real estate contract used for any type of residential real estate transaction.

4 Essential Elements of an Illinois Real Estate Contract

Real estate contracts in Illinois must include essential elements to be considered a legal and binding agreement. The four essential elements of an Illinois real estate contract to according to Illinois state laws are:

1. The contract must be in writing
2. The parties need to show mutual agreement on the terms
3. The parties must both be competent and legally allowed to enter a contract
4. The contract cannot violate any laws

What Must Be Included in an Illinois Real Estate Contract?

All real estate contracts need to include specific information to be legally enforceable. The required information varies by state, but Illinois real estate contracts should include the following information:

• Parties involved. The contract must identify the buyer and seller by name.
• Property details. The contract must clearly describe the property being sold, including the address and legal description.
• Purchase price. The contract must state the agreed-upon purchase price for the property.
• Terms and conditions. The contract must include any contingencies or conditions that must be met before the sale can be completed, such as the buyer obtaining financing or the property passing inspection. The contract should also include the closing date and any other terms of the sale.
• Earnest money deposit. The contract must state the amount of the earnest money deposit required by the seller and should be accompanied by the deposit check.
• Disclosure. The contract must include all the disclosures required by the state of Illinois, including lead-based paint, radon gas, and any other material facts about the property that may affect its value.
• Signatures. The contract must be signed by both the buyer and the seller.

What is Attorney Review in Real Estate in Illinois?

Attorney review is a clause added to real estate contracts in Illinois that gives both parties the option of modifying or terminating a real estate contract without legal repercussions. The attorney review period is usually five business days and begins on the day that the parties sign the real estate contract.

During this time, the party’s attorneys will review the contract and decide whether to approve, reject, or negotiate terms of the contract. If there are issues with the contract, either party can choose to terminate the contract. This clause gives both parties an extra layer of protection because it provides time for a real estate lawyer to ensure that the contract is legal, fair, and in their party’s best interest.