Couples with children tend to move in the summer while the children are out of school. As a result, many real estate contracts are executed in late June and early July to accommodate the move prior to the start of the next school year.
As life with children is pretty fast-paced, let’s review some of the more important provisions of a standard and unaltered residential real estate contract that our buyers might have just scanned (typically the "Multi-Board Residential Real Estate Contract 5.0"):
• Attorney review: The attorney for either party may disapprove of the contract, if written notice is provided to the other party within five business days after the date of acceptance, so long as the disapproval is not solely based on the contract’s purchase price.
• Home inspection: The buyers have five business days after the date of acceptance to conduct a home inspection (always recommended) and to provide the inspection report to the seller with a request for resolution of the found defects. Either party may terminate the contract with written notice, if the parties do not reach an agreement within 10 business days after the date of acceptance regarding the buyers’ requested resolutions.
• Mortgage contingency: The contract is contingent upon the buyers securing a firm written mortgage commitment. This is not the pre-approval letter the buyers obtain when beginning the purchase process.
Note: It is critical that the buyers inform the seller in writing and prior to the deadline specified in the contract if they cannot in a timely fashion obtain a firm written mortgage commitment and to ask the seller for an extension of time; otherwise, the buyers can be held in default of the contract and may face consequences, such as the loss of their earnest money.
• Finally, the seller shall provide the buyers’ attorney with a survey of the property not more than six months old at least one day prior to the closing date for review. This is to ensure that there are no encroachments or other issues with the property.
• Anthony Scifo is a resident of Kane County and an associate attorney with Shaw, Jacobs, Goostree and Associates P.C. in St. Charles, where he concentrates in divorce and family law, personal injury and wrongful death. His goal with this occasional column is to help educate the public regarding the court system and the law. Contact him with general legal questions at email@example.com.