Chicago Real Estate Lawyers

Important Real Estate Contract Clauses

While drawing up the contract for making an offer on a home, there are certain clauses that should be included in it to ensure your interests are protected. The first thing the contract should specify is that the check you present to the sellers or their agent will be held by a neutral third party. If the check is for a large amount of money, it should be held in an interest-bearing account where the money earned will be given to you at the time of settlement. Remember to include a specific time frame for returning the check in case the offer expires or is withdrawn or any other reason through which the deal falls through.

The type of deed and the settlement of the title must be included in the contract, along with the action which will be taken as recourse if the title is not settled. Your offer should be contingent on a loan commitment that has been written out for a specific time in terms that favor you. Terms of seller financing relating to the offer also need to be spelled out clearly. The date of the settlement should be fixed, with your being entitled to take possession of the new home immediately afterward.

The name of the attorney or title company who will perform the settlement services needs to be mentioned, along with the property taxes and other points to be prorated at the closing date. In some cases, the sale of one house is contingent on another house getting sold first, and this contingency should be a part of the contract. The seller should be allowed a response time limit in which to accept or reject the offer. Often the time limit given is two days. Failure to give an answer in that time means the contract becomes null and void.

Of course, a home inspection should also be a part of the contract, with the option to withdraw the offer if the report from the inspection is not satisfactory or if the owner refuses to allow the inspection. The price of the estate can be adjusted to take into account any repairs that need to be carried out on the property. There are various tests that you can be included in the contract to be performed on the house to test for the presence of radon, asbestos, termites, etc. You can also specify which parts of the furnishings are to be included with the house once it is bought. The state the house needs to be in at the time of purchase can also be added to the clause.