The Arrival of the New (7.0) Multi-Board Residential Real Estate Contract
A new base, real estate contract began circulation at the start of 2019. It took over 100 hours of review and debate to ultimately get to an end product that changed one of the most widely used contracts in Illinois. If you will be involved in a real estate transaction this year, you will most likely encounter the new contract. In this abbreviated article, we highlight some of the major changes to the contract from its predecessor (6.1):
- Fixtures: Parties to the contract can now be more specific with the fixtures that will be included in the transfer at no added value. The contract now includes common fixtures that may be found in homes today like dedicated beverage fridges.
- Financing: Buyers now have a more realistic timeline to proceed with a loan application. Buyers now must submit a loan application within ten (10) business days after the date of acceptance. Realtors no longer choose a date for the loan contingency to expire either. There is now language in this contract that provides a standard deadline for the buyer and lending institution to meet.
- Waiver of Inspections: Much attention was given to home inspections. Now the Buyer and Seller can agree by initialing the contract to waive professional inspections. Opting for this choice eliminates attorney negotiations for repair requests and a host of potential issues that can surface from an inspection.
- Professional Inspection: This paragraph has been updated to discourage the far too common practice of some Buyers asking for cosmetic repairs or repairs that do not relate health, safety or functional flaws of equipment or structural elements in a home. In a remarkably strong statement against the abuse of past practices, Sellers can choose to cancel the contract if they receive a request that violates this provision. Negotiating power on this issue has now been balanced.
- Sale of Buyer’s Real Estate: Buyers have always needed to inform Sellers if the Buyers own property and are selling it to purchase a new home. Now, buyers are asked if the property is being publicly listed or not. This information could affect the length of a real estate transaction, and thereby the length of the contingency affecting the sale of the underlying property.
Generally, the 7.0 contract improves shortcomings contained in its predecessor. It clarifies and strengthens language where necessary and addresses areas of concern found in the practical application of the 6.1 Contract. This contract still provides for an attorney review period, so remember that hiring an experienced and effective attorney to review the underlying contract and act on your behalf throughout the transaction is a wise investment in one of the most significant investments which you will ever make.