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One of the most important transactions that most people will engage in is buying or selling their house. The process can be relatively simple and uncontested. Still, there are some significant events that a party to a real estate needs to be aware of and take appropriate action to preserve their rights.
One of the most important transactions that most people will engage in is buying or selling their house. The process can be relatively simple and uncontested. Still, there are some significant events that a party to a real estate needs to be aware of and take appropriate action to preserve their rights. Perhaps the most important event within a contract is the attorney review period. In this article, we will be examining the question of what attorney review is and why it is important in your Illinois real estate contract?
What Is a Valid Real Estate Contract?
A valid real estate contract is established when the prospective buyer has tendered a Bonafide purchase offer, and the seller has accepted the purchase offer. In the State of Illinois, these offers are made via a Multi-board Real Estate Contract. The offers are made in writing and signed by the seller upon acceptance. Once the seller signs the contract, the terms of the contract go into effect.
Once Both Parties Sign The Contract, Is That The Final Agreement?
No, usually it is not. The purchase price is established at the time of signing the initial contract. The purchase price is not modifiable under the attorney review period. Still, an automatic review is built into the Illinois Real Estate contracts, which can allow for some terms, conditions, and provisions to be modified.
How Long is the Attorney Review Period?
It is essential to have your contract delivered to the attorney that represents you as soon as possible. Attorney Review lasts from 5 business days from the date of acceptance. If you wait four days to deliver the contract to your attorney, the period does not extend. You or your real estate agent need to deliver the contract to the attorney handling the file as close to acceptance as possible. Read our article to find out Why Should you Hire a Residential Real Estate Attorney in Illinois?
What Happens During the Attorney Review Period?
The Attorney Review period allows the parties to clarify and modify the terms of the contract. During this time, the attorneys for both parties frequently communicate to ensure that there are no ambiguous terms or misunderstandings as to the intention of either party.
Can I Change the Purchase Price During Attorney Review?
The purchase price is not a term that parties can address during attorney review. The purchase price is generally a binding term unless a specific conditional provision is met closer to closing. The cure for this condition not being met is generally not a basis for modifying the purchase price.
What Terms or Conditions Can be Modified During the Attorney Review Period?
The Attorney Review modifications generally include:
- Establishing the title company.
- Eliminating provisions that do not apply to the subject property.
- Potentially addressing unknown defects to the physical conditions of the property.
Attorney review can also clarify which personal property (significant appliances, specific fixtures, rosebushes, etc.) will or will not be included in the purchase.
What is the Difference Between Attorney Review and the Inspection Period?
The Attorney Review period runs concurrently with the Inspection Review period. Homebuyers in Illinois are allowed to hire a licensed inspector to investigate the physical condition of the subject property. The inspection review period allows the buyer to uncover all of the issues with a piece of property that is not readily noticeable when the buyer makes the purchase offer on a home. This process is designed to allow the buyer to fully understand the property's condition on the date they assume ownership of it.
What if the Inspection Reveals Unknown Issues in Property?
Issues on the property inspection are pretty common and can be addressed between the attorneys on a file. The buyer can request repairs for the defects discovered in the property in certain circumstances. The buyer may also determine that they will undertake those repairs on their own in exchange for credit at closing. The sellers are not required to make repairs or provide credit in most situations. The buyers are also not allowed to request repairs or replacements carte blanche, so the defects addressed under this provision must be for significant items that materially affect the purchased property.
Can the Contract Be Cancelled During Attorney Review?
Yes, suppose the parties cannot agree to the terms of the contract or address any other issues during this period. In that case, the parties can terminate the contract at no cost to either party. The parties may not cancel the contract based on the agreed purchase price.
Once Attorney Review is Closed, Are There Any Other Ways to Cancel a Contract?
From the buyer's side, the contract can be canceled if they are willing to forfeit their escrow money. Sellers cannot generally terminate the contract once attorney review is cleared unless there are other contingencies built into the contract that allow for cancellation.
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