Significant Changes in Real Estate Contract 7.0 versus 6.1e
The changes to the contract are mainly intended to help reduce errors and misunderstandings amongst all parties involved in a real estate sale. The most important changes that buyers, sellers, and real estate agents should be aware of are:
- Inspection contingency: Subparagraph (a) of the inspection paragraph has been rewritten to prevent buyers from demanding minor repairs. It now specifically states that minor repairs “shall not be a basis for the buyer to cancel” the contract. In addition, the seller can now terminate the contract and return the buyer’s earnest money if the buyer asks for repairs or credits unrelated to the major components of the property.
- Financing contingency: The old Mortgage Contingency paragraph has been replaced by a Financing paragraph with a choice of three options: mortgage contingency, cash transaction with no mortgage, or cash transaction with mortgage allowed. The deadline for the buyer to serve notice that they did not get the specified mortgage is now fixed at either 45 days after acceptance or five business days before closing, whichever is earlier.
- Property tax representations: Two new seller representations have been added to the contract to better inform buyers about a home’s future property taxes. First, sellers must indicate if there are any home improvements that have not yet been assessed for property tax purposes, such as an addition or a new garage. Second, sellers must indicate if there have been any property improvements eligible for a home improvement tax exemption.
- Attorney review: The language of this paragraph has been clarified so that any proposed change to the sales contract that references subparagraph (d) will be deemed a “proposal;” any other change will be deemed a counteroffer. A buyer or seller can void the contract due to disagreement over a counteroffer but not over a proposal.
- Seller credits at closing: The paragraph stating whether the seller will pay the buyer’s closing costs
- Fixtures and personal property included: Four more items were added to the list: hardscape, wall-mounted brackets for TV/AV equipment, water softener, and wine/beverage refrigerator.
- Foreign seller disclosure: If the seller is a nonresident alien or foreign corporation, this fact must be disclosed for federal tax reasons.
Consult a Palatine Real Estate Lawyer
To ensure that your home sale and/or purchase proceeds smoothly and that your legal and financial interests are protected throughout the process, contact an experienced Arlington Heights real estate attorney by calling 847-934-6000. The attorneys of Drost, Gilbert, Andrew & Apicella, LLC will represent your interests in any real estate transaction.