Steps Guide for Buyers and Sellers in Illinois

The purchase contract is an important aspect of any real estate transaction since it specifies all of the important facts, such as price and terms. In reality, every aspect of the transaction is addressed in a well-drafted purchase contract, from earnest money obligations to well disclosures. The goal of such a contract is to ensure that all conditions and expectations are clearly defined and that both the buyer and the seller are protected. That's also why most contracts are difficult to read and understand for the inexperienced, and more than a bit intimidating. Here's a step-by-step purchase contract tutorial for buyers and sellers in Illinois to assist you get a handle on it.

Purchase Contract Overview

A buy contract is also known as a real estate sales contract, a home purchase contract, a real estate purchase contract, or a home purchase agreement. Whatever you call it, it has some common features and performs a similar function.

A purchase contract, then, is a legally binding agreement between a buyer and a seller that spells out the specifics of a house deal. The buyer will propose contract terms, including their offer price, to the seller, who will either accept, reject, or negotiate them. Buyer and seller negotiations may go back and forth until both sides are pleased. They're regarded 'under contract' whenever both parties are in agreement and have signed the purchase agreement.

The purchase contract/agreement is normally written (or, more precisely, filled out) by the buyer's agent. Agents often utilize basic contract forms and then fill in the essential information and circumstances of the sale because only attorneys can write up legal contracts.

In practically every scenario, the terms of purchase contracts differ, and legal requirements differ from state to state. There are, nevertheless, several aspects that all such contracts have in common…

• Information about buyer and seller
• Necessary property details
• Pricing and financing information
• Items to be included in the sale such as fixtures and appliances
• Amount of earnest money deposit
• Closing costs and who pays them
• Conditions that allow contract termination
• Contingencies on which the sale hangs

Major Components of Purchase Contracts

So, let's go over the primary components of any purchase contract in Illinois that generate the most difficulty among buyers and sellers.

FINANCING

"The terms of your real estate purchase agreement will specify how the house will be paid for. If the buyer isn't paying cash, they'll require financing (i.e. a loan) to purchase the home, the terms of which will be specified in the contract."

EARNEST MONEY

The earnest money deposit is a good faith deposit that shows the buyer's earnestness and assures the seller that she will not be wasting her time. When a buyer puts down a deposit, she is demonstrating that she is invested in the deal and will most likely complete it. "Typically, earnest money is held in escrow by a third party and applied to the down payment or closing fees at the time of closing."

"If the buyer decides to back out for a reason not specified in the contract between signing the purchase agreement and closing on the home, they forfeit their earnest money, which the seller keeps. A buyer, on the other hand, can get their earnest money back if they cancel the deal for a reason specified in the contract."

CONTINGENCIES

As the name implies, contingencies are requirements that must be met before the sale may be completed. There are various types of contingencies that can be added in purchase contracts, on either the buyer's or seller's side. The following are a few of the most common:

• Financing contingency – Stipulates that sale depends on the buyer’s ability to obtain financing
• Appraisal contingency – "States that the home must appraise at a value equal to or higher than what the buyer agreed to pay"
• Inspection contingency – Allows buyer "to back out of the sale without penalty if they aren’t satisfied with a professional inspector’s assessment of the home"
• Sale contingency – Stipulates that the sale is contingent on the buyer’s selling current home

CLOSING COSTS

Certain fees and expenditures associated with the preparation and completion of the transaction must be paid at closing. This section of a purchase contract specifies who pays which fees (the buyer or the seller). "How much each party pays will be determined by the terms of the contract."

Sell My House Fast Chicagoland

Purchasing or selling a property is a significant financial investment. As a result, having the precautions that a purchase contract provides in place is vital. The issue is that these contracts are complicated, full of legal language, and difficult to comprehend. That's why you'll need the help of a seasoned Illinois representative. So, if you truly want to ensure that your purchase contract protects you as a buyer or seller, Sell My House Fast Chicagoland call us at (312) 869-2289 right now.

Jason Benoit I'm here to help out reader's while selling or buying home. I have 30 years of experience in real estate market. I wrote many article on real estate.