Illinois Real Estate Contract Guide
Illinois is an attorney review state with a mandatory 5-business-day attorney review period after contract signing. The state uses Multi-Board contract forms in the Chicago metro area and has unique transfer tax rules that vary by municipality. Understanding the attorney review process is essential for every IL transaction.
Illinois Contract Forms
Illinois uses standardized contract forms in the Chicago metro area (Multi-Board forms) but practices vary more in downstate Illinois. Attorney involvement is standard and the 5-day review period is a critical feature.
Multi-Board Residential Real Estate Contract 7.0
The standard form used in the greater Chicago area. Published jointly by multiple realtor boards. Includes the 5-business-day attorney review provision.
Multi-Board Residential Real Estate Contract (Short Sale)
Modified version for short sale transactions. Includes provisions for lender approval timelines and contingencies specific to distressed sales.
Illinois Association of Realtors Residential Real Property Disclosure
The state-mandated disclosure form that sellers must complete, covering known material defects in the property.
Attorney Modification Letters
Not a form per se, but the standard mechanism for attorneys to propose contract modifications during the 5-day review period. These letters are the primary negotiation tool.
Inspection Rider
Attached to the contract to specify inspection contingency terms, timelines, and the process for requesting repairs or credits.
IL Deadline Rules
Illinois uses a mix of business days and calendar days depending on the specific deadline. The 5-day attorney review period uses business days, while most other deadlines use calendar days.
5-business-day attorney review
After both parties sign the contract, each party's attorney has 5 business days to review and either approve the contract or propose modifications. Either attorney can cancel the contract during this period for any reason.
Inspection contingency (typically 5 days after attorney review)
The inspection period usually begins after attorney review is complete. Standard is 5 business days to conduct inspections and request repairs.
Mortgage contingency (30-45 days)
Buyer must obtain a mortgage commitment within the specified number of calendar days from the date of attorney approval (not from contract signing).
Closing date
Usually set 30-60 days after attorney approval. Illinois treats the closing date as a firm deadline once set, though extensions are common and usually handled through attorney communication.
Attorney review start date
The 5-day period begins the day after the last party signs. If the contract is signed on Friday, day 1 is Monday (business days only, excluding weekends and holidays).
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IL Contingency Rules
Illinois contracts typically include several contingencies, with the attorney review period serving as a catch-all contingency that allows either party to cancel for any reason during the review window.
Attorney Review (5 business days)
The most powerful contingency in Illinois contracts. During this period, either party's attorney can disapprove the contract for ANY reason — effectively making it a free cancellation window. If an attorney disapproves, they may propose modifications; the other side can accept, counter, or walk away.
Inspection Contingency
Negotiated during attorney review. Typically 5 business days after attorney approval to inspect and request repairs. If the parties can't agree on repairs, either party may cancel depending on the contract terms.
Mortgage Contingency
Standard inclusion. Specifies loan amount, type, interest rate cap, and deadline. If the buyer cannot obtain a commitment letter by the deadline, they can cancel and receive their earnest money back.
Appraisal Contingency
Often included as part of the mortgage contingency. Can also be negotiated as a standalone provision during attorney review.
Home Sale Contingency
Can be included to make the purchase contingent on the buyer selling their current home. Less common in competitive markets but standard in suburban and rural areas.
For a complete overview of how contingencies work, see our guide: Real Estate Contract Contingencies Explained.
IL Disclosure Requirements
Illinois requires sellers to complete a state-mandated disclosure form and has additional requirements for specific property types and conditions.
Residential Real Property Disclosure Report
State-mandated form covering 23 categories of potential defects: structural, mechanical, environmental, and material conditions. Sellers must complete this honestly.
Lead-Based Paint Disclosure
Federal requirement for pre-1978 homes. Particularly relevant in Chicago's older housing stock.
Radon Disclosure
Illinois requires disclosure of known radon test results and any radon mitigation systems. The Illinois Emergency Management Agency provides guidelines.
Mold Disclosure
Sellers must disclose known mold conditions. Illinois courts have been active in mold-related real estate litigation.
Environmental Contamination
Sellers must disclose known environmental contamination, underground storage tanks, and proximity to hazardous waste sites.
Transfer Tax Disclosure
Municipal transfer taxes vary significantly in Illinois. Chicago, Evanston, and other municipalities impose their own transfer taxes on top of state and county taxes.
IL Earnest Money Rules
Illinois follows standard earnest money practices, but the attorney review period adds a unique dimension — the deposit is technically “at risk” from signing but effectively protected during attorney review.
Typical amount
Usually 1% to 5% of the purchase price in the Chicago area. Higher deposits are common for higher-priced properties and signal buyer commitment.
Deposit timing
Typically due at contract signing or within 1-3 business days. The listing broker usually holds the earnest money.
Held by listing broker
In Illinois, the earnest money is most commonly held by the listing brokerage in a special escrow account, unlike states where title companies hold the deposit.
Attorney review protection
If either attorney disapproves the contract during the 5-day review period, the earnest money is returned to the buyer in full.
Dispute resolution
If there's a dispute about earnest money after attorney review, the broker must hold the funds until receiving written instructions from both parties, a court order, or an interpleader action is filed.
Learn more about common pitfalls: Earnest Money Clause Mistakes (And How to Fix Them Fast).
Illinois-Specific Rules
Illinois has several unique aspects to its real estate transaction process, particularly around the closing process and tax implications.
Attorney review is the de facto inspection period
Savvy buyers in Illinois schedule home inspections immediately after signing so results are available during attorney review. If inspections reveal problems, the attorney can disapprove the contract during the review period — a cleaner exit than negotiating after.
Transfer tax stacking
Illinois has state transfer taxes ($0.50 per $500), county transfer taxes ($0.25 per $500), and many municipalities charge their own. In Chicago, the city transfer tax alone is $5.25 per $500 of sale price. These add up to a significant closing cost.
Real estate tax proration
Illinois prorates property taxes at closing, but because IL property taxes are paid in arrears (you pay in 2026 for 2025 taxes), the proration can be complicated. A credit is given based on the most recent tax bill, often with a percentage adjustment.
Water certification
Many Illinois municipalities require a water meter reading and certification of no outstanding water bills before closing. In Chicago, the seller must obtain a water certification from the Department of Water Management.
Survey requirements
Buyers in Illinois typically order a new plat of survey. The survey is important for identifying encroachments, easements, and boundary issues. Title insurance companies may require a survey to issue full coverage.
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