House & Apartment

Selling a house or a condominium is legally complicated. Before you put your residential real estate up for sale, you should understand the legal pitfalls.

Should you hire a lawyer or a real estate agent?

Selling a home by yourself is called FSBO — For Sale By Owner. Hiring someone to help you is not legally required, but a real estate agent and a lawyer Someone who represents clients in courts or who gives legal advice can help you avoid serious mistakes and get the most out of your home sale. In some other states, it is legally required.

Real Estate Agents:  

Agents and realtors can help you:

• Understand the local housing market,
• Access professional networks and listing services, 
• Manage all the tasks involved in the home selling process, and
• Negotiate with buyers based on their experience and knowledge.

Lawyers:

Among other things, lawyers can help:

• Negotiate changes to your contract during the attorney review period, including credits and offsets or repairs,
• Discover and fix any title issues;
• With paperwork including the contract, the title policy, the deed A legal paper that transfers ownership of real estate. It is recorded in the local land records. , and the survey,
• Review inspection reports and prepare disclosures,
• Apply for any water or zoning certificates,
• Work to resolve any disagreements that come up,
• Guide you through the closing, and
• Advise you on tax and other consequences of the sale.

A lawyer or realtor may agree to be paid from the proceeds of the sale of your property. In that case, their fees will be listed on your closing statement and they will be paid directly by the title company.

Choose a price and list the home for sale

The first step in selling your home is preparing it to be sold. This includes cleaning, removing clutter, and making any necessary repairs before taking photographs. You may also decide to stage the property, which is a paid service where furniture and items are arranged in the home.

You should set a listing price based on the market. If possible, get input from a third party A person or business involved in a court case in a role like plaintiff, petitioner, defendant, respondent, or intervenor. . This could be your real estate agent’s opinion, an appraisal An expert's opinion of what something is worth , or a broker’s price opinion.

List the home at your chosen starting price through your agent on the Multiple Listing Service or other marketing platforms.

Disclosures you need to make about the property

Before any contract is signed, Illinois and Federal law require a seller to disclose:

• Major defects that impact the value of the property. This could include a leaking roof, plumbing problems, or a history of pests.
• Major defects that would impact the health and safety of anyone living there.
• The presence of lead-based paint, radon, or other environmental hazards like asbestos.
• Any homeowner association rules and bylaws.

Failing to disclose defects may let the buyer sue you when they find out about the problem. Having your home inspected before selling your house can help you identify defects early. You can either fix the problem yourself, or disclose the problem and offer to reduce the price.

The Illinois Residential Real Estate Property Disclosure Act lists what you need to disclose.

The contract to sell your home

There are several important parts of your contract that you should review and consider before entering into a final agreement:

• Earnest money is an amount of the purchase price that you will get if the buyer decides not to buy the property and is not covered by an allowable contingency in the contract. Some contingencies include obtaining financing or the discovery When parties exchange and gather information about each other's cases before the case goes to trial of a defect.
• Financing is important because it will outline how the buyer is going to pay for the property and this usually requires a contingency that will let the buyer walk away from the contract.
• Inspection, a clear title, and an acceptable land survey are usually addressed by the contract. Thes can create additional contingencies.
• Closing costs and the overall schedule of the translation will be included in the contract. Make sure you have enough time to be prepared for the deal to close.
• Tax proration is splitting up the amount of taxes each person will pay relative to when they owned the home. Property taxes are issued in arrears so the seller usually credits the buyer with a prorated amount of property taxes, which is estimated.

Transferring clean title using a deed

If you hire a lawyer, they will order a report from a title company that shows any possible problems with the record of ownership of your property. Any liens, judgments, or other clouds on title should appear on the report and can be dealt with. Buyers and the company giving the buyer a loan will almost always require title insurance. Title insurance protects the buyer and the buyer’s lender if there is a lawsuit about the ownership of the property or a problem with title is discovered later. 

When you sell a home, you sign a deed, which is a legal document that transfers your ownership of a property to another person. The deed must meet certain legal requirements and should be recorded in the county where the property is located.

You will likely need to provide a Bill of Sale for personal property that is not attached to the land. Another document to be aware of is the Affidavit A notarized written statement signed by a person under oath of Title, which is your promise that you are the legal owner of the property and discloses any potential issues with liens or legal actions.

Fair housing laws and discrimination

The Fair Housing Act, Illinois Human Rights Act, and local ordinances such as the Cook County Human Rights Ordinance A law or rule made by a local government like a town or city and Chicago Fair Housing Ordinance all prohibit discrimination against buyers based on different factors. Read more about housing discrimination.

Closing

Before closing, the buyer will do a final walkthrough of the property to ensure that it's in the agreed-upon condition and that all repairs, if any were requested, have been completed.

All necessary documents must be prepared ahead of time. This includes the final closing statement (also known as the HUD-1 or ALTA Settlement Statement).

You should be aware of costs, which can include real estate commission fees, property taxes (prorated up to the date of sale), attorney fees, and any homeowner association fees or assessments. Illinois also has a state transfer tax, and some municipalities may impose additional transfer taxes or require stamps before a deed can be recorded.

Make sure to have a checklist of follow tasks, like to change any utilities and services and set up mail forwarding.

Taxes

The taxes involved in selling property can be complex. These include a possible capital gains tax if the property is not your residence and within an exemption. This can also include a tax if you are not a resident of Illinois, which can result in a withholding When an employer keeps some of a person's paycheck to cover their taxes of sale proceeds.