DuPage Real Estate Attorneys

Top 5 Clauses in a Residential Real Estate Contract to Review with Your Attorney

Dupage County real estate attorney Kevin O'Flaherty explains some of the most important clauses in residential real estate contracts.

In this article, our Dupage County real estate attorneys discuss several key clauses to watch out for in your residential real estate contract. After signing a residential real estate contract, you will typically have five business days to review it with your attorney and make any changes that your attorney recommends. Our DuPage real estate attorneys will work through your contract with you paragraph by paragraph to ensure that it is fair and advantageous to you as possible. However, five clauses in the contract stand out as particularly important for you to understand:

‍Purchase Price and Earnest Money: It goes without saying that it is important for the purchase price to be listed correctly. However, there may also be closing cost credits that factor into the ultimate purchase price. There are many parties involved in a real estate transaction, including your title company, your lender, attorneys, and governmental entities to whom taxes and fees are paid. At closing, the seller's attorney will present a ledger called a "settlement statement" showing all of the money that is changing hands between all of these parties
‍Fixtures and Personal Property Included in the Transaction: The form real estate contract used by most realtors includes a paragraph with a series of check-boxes for fixtures and other property, such as appliances or chandeliers, that will be included in the purchase price.
‍Mortgage Contingency: If your contract is contingent on the purchaser obtaining a mortgage, it is important that you understand the portion of the contract relating to the mortgage contingency and that its terms are correct. The mortgage contingency paragraph will lay out the terms of mortgage that the purchaser must be able to obtain in order to be bound by the contract
‍Tax Prorations: When you purchase real estate, you will be responsible for the entire property tax bill for the entire year in which the transaction occurred, even though you likely have only owned the property for a portion of that year.
Optional Clauses: The typical real estate contract used by realtors contains several clauses that will only be effective if initialed by both sides, which are used for special circumstances.

Read the entire article by our Dupage County real estate attorneys regarding important clauses in residential real estate contracts.

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Our DuPage Real Estate Attorneys Will Prepare For A Smooth And Timely Closing

Our DuPage real estate attorneys prioritize taking your case from contract to closing in a smooth and timely manner. The seller's attorney in a real estate closing has handles many tasks to prepare the deal to close. Here are some of the most important items on our DuPage real estate lawyers' checklist when representing the seller:

Disclosures: Our DuPage real estate attorneys will prepare and provide the buyer with disclosures from the seller regarding radon hazards, lead-based paint, hazardous mold, and other structural defects, which must be noted in the Illinois Residential Real Property Disclosure Report.
Title Commitment: Our DuPage real estate lawyers will work as an agent of a title insurance company to review the title record for the property to ensure that there are no defects in the seller's ability to transfer title to the buyer. We will arrange for the issuance of a title insurance policy, which will insure against any issues that are not found at this time in the title record.
Survey: Our DuPage real estate attorneys will order a survey and provide it to the buyer, so that the buyer can review the metes and bounds of the property being purchased as well as any easements on the property.
Pay-off Letter: Our real estate attorneys will work with your lender in order to obtain a pay-off letter, which shows exactly how much must be paid by the title company to the lender at closing in order to remove the existing mortgage from the property.
Letters from Homeowners or Condominium Associations (If Applicable): Our DuPage real estate attorneys will work with your homeowners association or condominium association to provide the buyer with letters showing that there are no unpaid assessments, that any right of first refusal to purchase the property held by the association is waived, and that the association's common areas are properly insured.
Municipal Letters: If your village or township requires a municipal inspection prior to the sale of your property, our DuPage real estate lawyers will arrange for the inspection and obtain a letter from the municipality stating that the inspection has been completed and that all utility bills have been previously paid by you.
Tax Proration: Our DuPage real estate attorneys will review the previous year's tax bill in order to calculate the amount of the tax proration that must be credited to the buyer at closing in order to account for your share of the current year's tax bill. You can learn more about tax prorations in this article by our DuPage real estate lawyers: The Top 5 Things to Look Out For in Your Residential Real Estate Contract.
Closing Documents: Prior to closing, our real estate attorneys will prepare the following documents to be executed at the closing table:

The Deed, which transfers title to the buyer.
Affidavit of Title, in which the seller testifies regarding any known defects in her title to the property.
Bill of Sale, which is a receipt showing that the seller has received payment for the property.
ALTA Statement, which is a sworn statement regarding any known encumbrances to the property, such as mechanic's liens and judgment liens.
Transfer Tax Forms, which are filed with the assessor's office to show the amount paid by the buyer for the property, for the purpose of calculating transfer tax.
Settlement Statement, which shows all of the money and credits changing hands between the buyer, seller, attorneys, realtors, lenders, and municipalities in the transaction.

Our DuPage attorneys have the skill, experience, and client-focus necessary to ensure that any obstacles to your transaction closing smoothly are either prevented or resolved efficiently and effectively.

IDupage County real estate attorney Kevin O'Flaherty discusses reasons why attorneys are very important to getting a fair real estate transaction.

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Disclosures: Our DuPage real estate attorneys will prepare and provide the buyer with disclosures from the seller regarding radon hazards, lead-based paint, hazardous mold, and other structural defects, which must be noted in the Illinois Residential Real Property Disclosure Report.
Title Commitment: Our DuPage real estate lawyers will work as an agent of a title insurance company to review the title record for the property to ensure that there are no defects in the seller's ability to transfer title to the buyer. We will arrange for the issuance of a title insurance policy, which will insure against any issues that are not found at this time in the title record.
Survey: Our DuPage real estate attorneys will order a survey and provide it to the buyer, so that the buyer can review the metes and bounds of the property being purchased as well as any easements on the property.
Pay-off Letter: Our real estate attorneys will work with your lender in order to obtain a pay-off letter, which shows exactly how much must be paid by the title company to the lender at closing in order to remove the existing mortgage from the property.
Letters from Homeowners or Condominium Associations (If Applicable): Our DuPage real estate attorneys will work with your homeowners association or condominium association to provide the buyer with letters showing that there are no unpaid assessments, that any right of first refusal to purchase the property held by the association is waived, and that the association's common areas are properly insured.
Municipal Letters: If your village or township requires a municipal inspection prior to the sale of your property, our DuPage real estate lawyers will arrange for the inspection and obtain a letter from the municipality stating that the inspection has been completed and that all utility bills have been previously paid by you.
Tax Proration: Our DuPage real estate attorneys will review the previous year's tax bill in order to calculate the amount of the tax proration that must be credited to the buyer at closing in order to account for your share of the current year's tax bill. You can learn more about tax prorations in this article by our DuPage real estate lawyers: The Top 5 Things to Look Out For in Your Residential Real Estate Contract.
Closing Documents: Prior to closing, our real estate attorneys will prepare the following documents to be executed at the closing table:

The Deed, which transfers title to the buyer.
Affidavit of Title, in which the seller testifies regarding any known defects in her title to the property.
Bill of Sale, which is a receipt showing that the seller has received payment for the property.
ALTA Statement, which is a sworn statement regarding any known encumbrances to the property, such as mechanic's liens and judgment liens.
Transfer Tax Forms, which are filed with the assessor's office to show the amount paid by the buyer for the property, for the purpose of calculating transfer tax.
Settlement Statement, which shows all of the money and credits changing hands between the buyer, seller, attorneys, realtors, lenders, and municipalities in the transaction.

How to Prepare for an Illinois Real Estate Closing

In this Learn About Law podcast & videoblog, Dupage County Residential & Commercial Real Estate attorney Kevin O'Flaherty of O'Flaherty Law discusses how Property values in the past few years have plummeted, yet homeowners find themselves paying higher property taxes than ever before. Your property taxes are linked to the fair market value of your home; however, when the fair market value of your home is uncertain, the tax assessment may be inaccurate. Due to the slow-paced real estate market, fewer homes are being purchased, making it difficult to get a fair estimate of what someone might pay for a home in your area, let alone a home similar to yours. Assessors do not have the raw data to work with as they did in the past, so they must refer to outdated information and do the best they can. Therefore, because many homeowners feel they have more accurate information than the assessor, they decide to appeal the assessment of their property.

In this article, our DuPage real estate attorneys discuss the steps that go into taking a residential real estate deal from contract to close including. We go over: