The Contract

Selling Your Property in Chicago: A Guide to Real Estate Contracts

As a real estate broker, I know how difficult it can be for people to make sense of the complexities of real estate transactions. To guarantee that the sale goes as planned, it is vital to have a strong understanding of the contract at the heart of the process. In this guide, we will take a closer look at key elements of a real estate contract, such as important dates and timelines, earnest money deposits, home inspections, and attorney review periods.

The Real Estate Contract

After both Buyer and Seller agree on the basic terms of the contract, like purchase price, closing date, and any specific conditions or contingencies, both parties sign a legally binding contract. This document outlines the rights and responsibilities of all parties involved in the transaction. When a buyer and a seller both sign off on it, the offer is accepted; thus, the property becomes “under contract.” Both parties are now obligated to carry through with their commitments as outlined by the agreement.

Important Dates and Timelines

Once the contract is executed, several key dates and timelines come into play. These dates are crucial to ensure that the transaction progresses smoothly and meets the legal requirements. Here are some of the most important ones to keep in mind:

  • Closing Day: The day when the property is officially transferred to the new owner is called closing day. It is specified in the contract and mutually agreed upon by both parties. Working closely with your real estate agent and other professionals to ensure all tasks are finished on time before this date is essential.
  • Earnest Money Deposit: The earnest money deposit shows the buyer’s intention to go through with the purchase. This amount is generally a portion of the price of the property and is deposited in an escrow account right after signing the contract. If the buyer decides to back out, then both parties need to sign off on a release of the earnest money form to release that money to the seller. The Seller’s brokerage firm traditionally holds the earnest money, with the first amount due on signing the contract or shortly thereafter.
  • Home Inspection: An important part of the home buying process, a home inspection is carried out shortly after the contract has been signed. This allows the buyer to understand the condition of the property and any potential issues that may exist. A professional inspector will go through the property, assessing its structure, systems, and general state. The results are detailed in an inspection report, giving buyers and sellers valuable insights to inform their decisions about repairs, negotiations, or contingencies.
  • Attorney Review Period: Most residential real estate contracts in Illinois include an attorney review period. Within 5-7 business days of the seller’s acceptance, both the buyers and sellers can get their attorneys to review the contract and make any necessary modifications. This allows both parties to be sure they understand and agree to all the terms and conditions before finalizing the terms of the contract.
  • Mortgage Contingency: A mortgage contingency is a clause included in a real estate contract that provides protection to the buyer in case they are unable to secure financing for their mortgage loan. It establishes a specific timeframe within which the buyer must secure a mortgage commitment from a lender. If the buyer fails to obtain the necessary financing within the agreed-upon timeframe, the contingency allows them to cancel the contract without any penalty and receive a refund of their earnest money deposit. Essentially, the mortgage contingency safeguards the buyer’s interests by ensuring they are not obligated to proceed with the purchase if they are unable to secure the necessary funds.
  • Home Sale Contingency: A home sale contingency is a provision commonly included in a real estate contract that allows the buyer to make an offer on a new home while still needing to sell their current property. The contingency states that purchasing the new home depends on successfully selling the buyer’s existing home within a specified timeframe. If the buyer fails to sell their home within the agreed-upon period, they have the option to either withdraw from the contract without penalty or negotiate an extension with the seller. A home sale contingency provides a degree of protection to buyers by ensuring they are not obligated to purchase a new property if they are unable to sell their current one.

If you have any questions about selling, don’t hesitate to reach out to me at I’m here to assist you with every stage of the process.