Role of professionals in home buying process clarified by laws
Recent changes in Illinois law have clarified the relationship between a buyer and his or her real estate agent in ways promising to be beneficial to both the buyer and agent. Now, when you work with an agent to find a home, it is presumed that he or she is your agent unless you sign an agreement to the contrary.
Any agent with whom you work may request you enter into an exclusive agreement with his or her broker. Be sure that you understand the terms of the agreement and have it reviewed by your attorney before you sign it. You should have a clear understanding of how, when, and by whom the broker and agent will be paid for their services.
Illinois law requires most home sellers to provide prospective buyers with a completed disclosure form relating to the condition of the house prior to the formation of a contract. Although the disclosure form may contain information of use to you in deciding whether to purchase a particular home, or how much to offer, it is not intended to take the place of an independent, professional home inspection. If you do not have a home inspection before you submit an offer to purchase (time and cost factors may suggest that you wait), you should insist on a reasonable inspection contingency period after acceptance of your offer (several business days) to allow for one or more professional inspections of the property.
There are other professionals who may be needed as part of your real estate team. They usually will perform a specific role and will not be involved in the transaction on an on-going basis. They may include:
A surveyor, to determine the location of the improvements in relation to the lot lines (as well as to establish the location of) easements, building or setback lines, and improvements on adjacent properties. The contract will govern who is responsible for providing and paying for the survey.
An appraiser, employed at your expense by your lender to determine that the value of the home corresponds with the purchase price. If you are buying without the services of a real estate agent, you may wish to employ an appraiser to give you an idea of the value of the home before you make an offer to the seller.
Your tax advisor or estate planner can work with your real estate attorney to assist you in determining how best to hold title or to maximize tax deductions for personal financial or estate planning purposes.
The escrow agent or closer, usually an employee of the title company, who acts as your lender’s agent to ensure that the lender’s requirements are met before the loan proceeds are disbursed.
Other issues to keep in mind:
- Choose your own independent home inspector, in advance, as a member of your team; this will enable you to act quickly during an often brief contingency period.
- Obtain referrals for a qualified home inspector from friends or colleagues, or contact the American Society of Home Inspectors (ASHI) or its members near you.
- You may wish to have a general inspection, supplemented by specialized inspections for pests, fireplace, heating system or environmental concerns, for example, as the situation warrants.
- Do not forego hiring your own independent inspector simply because you are obtaining an FHA or VA insured loan which requires an inspection as part of the appraisal, or if the municipality requires an inspection as a condition of any sale.
- You cannot require the seller to undertake repairs for matters discovered during the inspection, but you may be able to terminate a contract for a home with unsatisfactory conditions, or you may be able to renegotiate a price which reflects the unanticipated problems.
Note: This information was prepared as a public service by the Illinois State Bar Association and is a joint project with the Illinois Press Association. Its purpose is to inform citizens of their legal rights and obligations.