from Local Attorney, Michael H. Wasserman

Tuesday, May 12, 2009



Current market conditions present two unfortunate realities for prospective home sellers: prices are declining. Market times are not. As a result, there are a lot of unsold homes languishing on the MLS and many, many more that are not currently active, but are available if there were Buyers willing to Buy. Worse still, merely accepting an offer does not assure an actual closing.
A great many contracts are falling apart before the closing. So why do so many Sellers shoot themselves in their collective feet by not being fully prepared to go forward on acceptable offers?

Sellers simply MUST do better. A great start is to compile the necessary due diligence materials when the property is first readied for market, well in advance of that acceptable offer.

Every seller of residential real estate in Illinois must make certain legal disclosures, to be given to prospective Buyers. For homes and condominiums that are considered "re-sales" these requirements include:
  1. a residential real property disclosure statement;
  2. a lead based paint disclosure statement;
  3. an information booklet about the dangers of lead poisoning;
  4. a radon disclosure statement
  5. an information booklet about the potential hazards of exposures to radon.
Chicago homeowners are also required to provide a heating cost disclosure.

Optionally, Chicago area homeowners may also be asked to provide mold hazard disclosures.

All Condominium owners and owners of properties located in planned developments or within homeowners associations must also produce association Declarations, By-Laws, financial statements, budgets and other related information. (as set out in the 'infamous' "rider 5") or in section 22.1 of the Illinois Condominium Property Act.

Failure to provide any of these documents or disclosures gives Buyers an easy way to back out of the deal, right up to the time of closing - and, in some situations, to even rescind a contract after it closes.

Why allow a buyer such an easy way out?. As an attorney representing Buyers, I typically see contracts well after they have been signed. One of the first things I do is request copies of all the applicable disclosures. Other competent lawyers do the same.

I am constantly amazed (but frankly, not at all surprised anymore) that it can take days to get Sellers to complete those disclosures. It can take weeks, sometimes a month or more, to collect the Condominium materials.

Its not like asking for them is going to come as a surprise to anyone in the business, and yet time and time again, Sellers and their listing agents fail to act proactively to have these things ready to go. The list has not changed in years.

Everyone knows the list. Everyone knows that the disclosures must be made... and that until the buyer sees ... and approves.... the disclosures, the Buyer can weasel out of the deal. So again, why would you let the buyer have free reign on this contingency?

Have everything ready to go, before the offer is received. Give it all to the Buyer the MOMENT her offer is accepted.

Start the clock as early as possible in order to close the contingency as early as possible. Get the deal closed.