970 McHenry Avenue, Crystal Lake, IL 60014
Botto Gilbert Lancaster, PC

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McHenry County Real Estate Lawyers

McHenry County real estate attorney

Skilled Attorneys Serving Crystal Lake, Woodstock, and the Chicago Area

At Botto Gilbert Lancaster, PC, our real estate lawyers have more than 30 years of experience assisting Illinois clients with residential and commercial matters. We can help you answer the following questions (click to expand):

Do I Really Need To Hire An Attorney?

ANSWER: Illinois law does not require you to use an attorney to buy or sell real estate. However, this state does have well established limitations on what a non-attorney may do with respect to preparing a contract or other legal documents for someone else. In fact, if a non-attorney (e.g. real estate broker) goes beyond merely “filling in the blanks” on a form contract, it may be considered the unauthorized practice of law, which is a serious, prosecutable offense. Further, in recent years, real estate matters have become increasingly complex legal transactions. The regulations which govern even a “simple” sale or purchase are constantly changing, making it essential to have an experienced real estate attorney representing your best interests. Finally, considering that this is probably one of the most significant events in your life, the benefits of having competent legal representation advocating for you greatly outweigh the relatively low cost of doing so.

I Am Considering Buying Or Selling A Home. So, When Should I Contact You?

ANSWER: Excellent question. Ideally, you should contact our office as early in the process as possible to discuss the specific details of your matter. We would be happy to provide referrals to real estate brokers, mortgage lenders, or other industry professionals you may need. If you are already under contract, then it is important to contact our office right away as the attorney review period (typically five (5) business days) begins to run as of the date the offer was accepted.

Can Your Office Represent Both The Buyer And Seller On The Same Matter?

ANSWER: This question often comes up when the transaction is between related parties or when one party is simply determined to forego legal representation. In short, our office considers it to be a serious conflict of interest for any attorney to attempt to represent both parties in a real estate matter. In most cases, inevitably something arises to cause the parties’ respective interests not to completely align. For example, the lender’s appraisal may determine that the fair market value of the property is lower than the purchase price; or, perhaps the home inspection reveals major issues for which the buyer was unaware. In either case, it would not be possible to properly represent the interests of either party vis-à-vis the other. Similarly, the same inherent conflict exists with respect to a real estate broker acting as a dual agent in one transaction.

What Is Your Fee And What Does It Include?

ANSWER: Our fees for real estate matters are reasonable and competitive with other attorneys and law firms in the area. Generally, a flat rate fee is charged for residential transactions and billed hourly for commercial matters. Due to the various factors involved, please contact our office to discuss the specific details of your matter and receive a no obligation quote for our legal services. In addition, our fees typically include the following services, without limitation:

  • Review of the contract
  • Advice and negotiation regarding inspection matters
  • Communication with opposing counsel, lenders and realtors, including letters, email and telephone calls
  • Monitoring critical contingency dates
  • Reviewing title and clearing any applicable issues
  • Advice regarding municipal transfer requirements
  • Preparation of closing documents and figures
  • Attendance at the closing ceremony

What Is A Quit Claim Deed?

ANSWER: A quit claim deed is used to transfer the legal interests in real estate between two or more parties. This particular form of deed does not provide any warranties to the grantee (i.e. the person to whom the interests are conveyed). Quit claim deeds are commonly used to add a spouse to title or convey property into a living trust, LLC or other type of legal entity. In order to be certain that it meets with the statutory requirements and is valid, it is important to have a quit claim deed properly drafted by an attorney licensed to practice law in the state where the property being conveyed is located.

I Am Selling My Property By Owner. Can You Help Me?

ANSWER: Our office has plenty of experience representing For Sale By Owner (“FSBO”) sellers. We are familiar with the particular challenges common to these types of transactions. As such, we can assist you with preparing the contract and expertly guide you through the process, start to finish. Of course, due to the additional work involved, our fee will be slightly higher; however, this cost is nominal compared to the significant savings of not having to pay real estate commission.

How Much Time Do I Have For A Home Inspection?

ANSWER: Our office has plenty of experience representing For Sale By Owner (“FSBO”) sellers. We are familiar with the particular challenges common to these types of transactions. As such, we can assist you with preparing the contract and expertly guide you through the process, start to finish. Of course, due to the additional work involved, our fee will be slightly higher; however, this cost is nominal compared to the significant savings of not having to pay real estate commission.

What Inspection Issues Can I Raise?

ANSWER: There are widespread misconceptions about what repairs a buyer is entitled to request as a result of the home inspection. The truth of the matter is that the most commonly used contracts in this area limit the scope of the inspection contingency to matters that are considered as “major” or “safety” issues. In other words, anything that requires only a minor repair, is cosmetic, or would be considered general maintenance, is excluded. There are numerous examples of what issues a buyer may legitimately request, including, electrical, structural, defects affecting a major system or appliance, etc. However, generally it would be improper for a buyer to demand to have the seller address all of the issues identified in the inspection report. In addition, it would be beyond the scope of the inspection contingency to request upgrades or updating from the Seller.

What Does An “As Is” Sale Really Mean?

ANSWER: An “as is” sale essentially means that as a condition of the seller agreeing to accept a lower price (often below fair market value) for the property, the seller will not be obligated to consider or make any repairs based on the outcome of the buyer’s home inspection. This does not mean that the buyer cannot have the property inspected. On the contrary, the buyer can, and should, complete an inspection to identify and understand the severity of any existing defects. Once the inspection is complete, the buyer can then make an informed decision whether to accept the condition of the property “as is” and move forward, or to terminate the contract due to the condition of the property being unacceptable.

Should I Have A Radon Inspection?

ANSWER: Prolonged exposure to radon levels in excess of the EPA action guideline (4.0 pCi/L) can post a significant health risk. Considering the relatively low cost of a radon test, there is little reason to forego the peace of mind that will come from knowing whether an issue exists. This testing should be completed within the time frame of the inspection contingency. In addition, it has become generally accepted that if the radon level is exceeds the action guideline, that the seller will undertake professional remediation prior to closing; however, that certainly remains negotiable between the parties.

Under What Circumstances Can I Keep The Buyer’s Earnest Money?

ANSWER: The short answer is that there are very limited circumstances to legally justify retaining the earnest money deposit. Consider that the contract commonly includes several important contingencies, including: attorney review, home inspection, and financing. In the event the parties are unable to reach an agreement with respect to attorney review or home inspection issues; or if the buyer is unable to qualify for financing and provides timely notice to the seller; then the contract is terminated, in which case the earnest money must be refunded to the buyer. Only once all contingencies have been closed should the buyer then default on the contract will the seller have a claim to the earnest money.

What Is IL Good Funds Law?

ANSWER: The IL Good Funds Law was enacted as a protection against loss to title companies. Essentially, the law states that aggregate funds to close of $50,000.00 or more must be deposited with the title company via wire transfer only. For amounts below that threshold (i.e. $49,999.00 or lower), the funds may be presented in the form of a cashier’s check. In the later case, the cashier’s check must be made payable directly to the title company. Title companies will no longer accept a cashier’s check made payable to an individual and signed over at closing.

Is There Anything I Should Be Aware Of When Purchasing A New Construction Property?

ANSWER: Purchasing a new construction property can have some special considerations. First, new construction builders typically use their own real estate contract instead of using one of the standard contract forms common to the area. The builder’s contract was drafted specifically with the builder’s best interests in mind, not necessarily the buyer’s. Often these contracts do not even include an attorney review contingency. Accordingly, it may be necessary to ask the builder to include a Rider for attorney review (typically a period of five (5) business days after the date of acceptance). Second, often builders will offer substantial concessions to a buyer who agrees to use the builder’s preferred lender to finance the purchase. Overall, there is nothing per se wrong with that practice, as long as the builder properly discloses its relationship with the lender. However, if the buyer uses a different lender, then the concessions will be forfeited. Third, new construction may take longer to complete than anticipated. Generally, the builder contracts include language giving the builder a great deal of latitude to extend the anticipated closing date, sometimes for a period of six (6) months or longer. Further, once the builder determines that the construction is “substantially complete”, it may then have the right to unilaterally set the closing date with only a week or two of advanced notice to the buyer. Fourth, it is very common for some items to be incomplete at the time of closing. At the time of the final walk through, the buyer and the builder will collectively develop a “punch list” of any outstanding action items. Typically, the builder will then have thirty (30) to forty-five (45) days after closing within which to complete the punch list items. Depending on the time of year, some items such as sodding or landscaping may remain incomplete for some time. Finally, builders commonly provide a limited warranty to cover certain defects which may arise after closing. The duration of the limited warranty is typically one-year after closing. It is important to thoroughly review the limited warranty in advance to become familiar with what types of defects are covered and what is excluded.

What Is A Plat Of Survey?

ANSWER: A plat of survey (commonly referred to simply as “the survey”) is a depiction of the property which is prepared by a licensed surveyor. The survey will identify the lot lines, building lines, easements, and improvements (e.g. house, shed, pool) which exist on the property. It is also important for verifying that no encroachments are present. An example of an encroachment would be a fence or patio belonging to an adjacent property which was built over the lot line and is partially on the subject property. In this area, it is common for the contract to require the seller to provide a survey for closing; however, surveys are not used with condominium properties.

How Long Does It Normally Take To Get To The Closing Table?

ANSWER: The answer depends on several factors. Depending on the type of property being purchased, it may be necessary for the seller’s attorney to obtain mortgage payoffs, a plat of survey, association documents, and possibly inspections of a private well and/or septic system. In addition, most lenders require between thirty (30) to forty-five (45) days to complete underwriting of the loan. Once the lender finally issues a “clear to close” status on the financing, there is still an additional disclosure requirement to comply with the current regulations. Thus, unless it is a “cash” deal (i.e. no lender financing), it is reasonable to anticipate closing approximately forty-five (45) days after the date of acceptance on the contract.

How Should I Hold Title To My Property?

ANSWER: Illinois recognizes three distinct forms of tenancy: 1. Tenancy in Common; 2. Joint Tenancy; and 3. Tenancy by the Entirety. The choice of which tenancy is most appropriate depends on the particular circumstances and should be made on a case by case basis. Both Joint Tenancy and Tenancy by the Entirety have a “right of survivorship”, which means that upon the death of any record owner, his/her legal interest in the property automatically transfers to the remaining record owners. For example, if a husband and wife hold title together either as joint tenants or tenants by the entirety, and the husband dies, then the wife automatically and immediately acquires sole ownership of the property by operation of law. Tenancy by the Entirety is only available to a married couple with respect to their primary (i.e. marital) residence. In addition to the right of survivorship, Tenancy by the Entirety has the added benefit of sheltering the property against judgments obtained against either spouse individually.

What Is Title Insurance?

ANSWER: Title insurance protects the property from claims of ownership and/or liens made by 3rd parties. It is a unique type of insurance in that it looks back in time, instead of covering future events. For example, if at the time of closing there are no recorded liens identified by the title search, but subsequently a lien is discovered which predated the closing, then the title insurance company will be liable for settling the lien on behalf of the property owner. However, if the lien was recorded after the closing date, there would not be claim against the title company because the owner’s policy does not cover events that occur after closing. In Illinois, it is standard for the seller to provide an owners title policy to the buyer at closing. In turn, the buyer purchasers a separate title insurance policy for the lender(s) financing the purchase, if applicable.

What Is A Short Sale?

ANSWER: In a nutshell, a short sale is an agreement by a lender (a/k/a lienholder or mortgagee) to accept less than the full balance owed on its mortgage as a condition of allowing the property to be sold to a bona fide purchaser in an arms-length sale. A short sale is one option to consider as an alternative to foreclosure. The fact that the lender may have already initiated a foreclosure suit does not mean that a short sale is no longer possible. In fact, a short sale may be pursued prior to or even during a foreclosure action, and frequently the lender commences the foreclosure even though the short sale is already in process. In order to be considered for a short sale, the seller (a/k/a borrower or mortgagor) must be 2 – 3 months delinquent on the mortgage installments and prove that he/she is experiencing a financial hardship. Some circumstances which may qualify as a financial hardship include the extended loss of employment, permanent disability, significant medical bills, or divorce, among others. The fact that value of the subject property declined due to changes in the real estate market is not considered a legitimate financial hardship. Effectuating a short sale can be a long and difficult process to complete. Even if the short sale is successful, it will still have a detrimental impact on your credit score. In addition, the forgiven debt must be reported on your tax return and will be treated as additional income by the IRS.

What Is An REO Property?

Answer: The terms “REO” or “Real Estate Owned” is used to refer to a property to which the lienholder (i.e. lender) has acquired title via the sheriff’s sale or auction resulting from a judgment of foreclosure. The property is then remarketed for sale in “as is” condition (see above for explanation), often at a significant discount below fair market value. However, some closing fees which are typically paid by the seller may be shifted to the buyer at closing.

What Is A Deed-In-Lieu Of Foreclosure?

ANSWER: Under certain circumstances, a deed-in-lieu (“DIL”) of foreclosure may be a viable alternative to the lender taking the property through a formal foreclosure. Essentially, the borrower agrees to sign a quit claim deed to convey legal title of the property to the lienholder (i.e. lender) in exchange for discharging the outstanding balance owed on the mortgage and issuing a full release. When appropriate, this is an appealing option for borrowers. However, in order to qualify, among other conditions, generally there can be only a single mortgage on the subject property. In addition, many lienholders will require all other options (e.g. short sale, loan modification) to be exhausted prior to considering a DIL. Finally, as with a short sale, this will have a detrimental impact on your credit and the forgiven debt must be reported on your tax return and will be treated as additional income by the IRS.

Why Do I Need To Pay For A Transfer Stamp For Closing?

ANSWER: In Illinois, the Seller always pays a transfer tax to the state as well as to the county in which the property is located. In addition, some municipalities have their own transfer tax. The amount of the tax and who is responsible for paying it depends on the particular municipality. Some charge the transfer tax to the seller; others charge it to the buyer; and some, including the City of Chicago, charge both parties. The municipal transfer tax is based on the sale price of the property. A common example would be a transfer tax of $3/1000, in which case a sale price of $250,000.00 would result in a municipal transfer tax of $750.00.

Should I Add My Adult Child To My Deed?

ANSWER: The answer is that it depends. There certainly may be circumstances to warrant doing so. However, if your goal is to leave the property to your adult child upon your death, there may be better ways to accomplish that (see discussion of Transfer on Death Instrument below). By adding someone to title, that person will acquire legal rights to the property. Accordingly, he/she will have some control over whether the property can subsequently be sold or refinanced. In addition, that person could also enforce his/her legal rights to use or reside in the property. Finally, if there is an existing mortgage on the property, adding another party (even a relative – other than a spouse) to title could potentially trigger the acceleration clause, which means that the lender could immediately call the balance of the loan due in full.

What Is A Transfer On Death Instrument?

ANSWER: A Transfer on Death Instrument (“TODI”) is a document which may be recorded to legally convey real estate to someone upon the death of the record owner. This transfer is done outside of probate. The beneficiary of the transfer does not acquire any legal right, title or interest in the property until such time as the owner is deceased. It may also be revoked at any time prior to the death of the owner. A TODI may be useful for a variety of situations, including the transfer of real estate to an adult child or children upon the death of the last parent to die.

I Am Behind On My Mortgage Payments. How Long Do I Have Before The Bank Files For Foreclosure?

ANSWER: Each lender has its own internal protocols for when to initiate a formal foreclosure action. As with any type of litigation, there costs to the lender to pursue a foreclosure, such as court filing fees, service of process and attorney fees. Accordingly, the lender will most likely attempt other collection methods first. However, generally if the loan is delinquent by three (3) months or more, unless other arrangements have been made (e.g. repayment plan, loan modification), it is likely that the foreclosure action will commence shortly thereafter. Overall, if the payments are delinquent, it is much better to be proactive and deal with the lender rather than avoid the collection calls and await the inevitable. By contacting our office early in the process, we can assess the circumstances, review the potential options with you, and advise you on making the right choice with how to proceed.

Can I Avoid Foreclosure By Paying The Delinquent Mortgage Payments?

ANSWER: Paying just the amount of the delinquent payments alone will not put you back in good standing with your lender. However, until the foreclosure judgment is issued, you do have the right to redeem the loan by making full payment towards not only the past due installments, but also the late fees, attorney fees, court costs and other expenses the lender has legitimately incurred with attempting to collect on the debt and/or filing a foreclosure action. Redeeming the loan will result in full reinstatement, meaning that you will be considered in good standing with your lender and may continue making your regularly scheduled monthly payments going forward.

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