In October 2020, home sales in Chicago rose a staggering 21.9% from October of the year before. Even the median price went up to $315,000, signifying a 14.5% increase. All these bode well for sellers, especially as the city is running low on housing stocks.
So, if you’re planning to sell a house in Chicago, now’s a good time before the market cools. This way, you can make the most out of your home sale while selling your Chicago property faster.
If this is your first time selling a home in the Windy City, you have two primary options. You can either hire a real estate agent or choose to sell it on your own. Either way, there are legal requirements you must meet to ensure a valid sale.
With that said, we came up with this guide covering the key facts on Chicago, IL home sales. Read on to discover your legal responsibilities as a seller and what your options are.
The Legal Side of Selling a Chicago House
First, home sellers need to provide buyers the Illinois-mandated disclosure form. It’s a legal document that contains information about a property’s known material defects. As the seller, you must disclose anything that may affect the new occupants’ health or safety.
Termite infestations, foundation cracks, and water damage are some examples of such defects.
This Illinois law can hold sellers liable if they fail to disclose such details. In this case, the offender may get slapped with a fraud or negligence lawsuit. At the very least, the seller may become liable for the buyer’s actual damages, court costs, and lawyer fees.
Sellers of homes built before 1978 must also comply with the federal Section 1018 of Title X rule. As a federal law, this applies not only to Chicago house sellers but to all other US property sellers.
The Traditional Way of Selling a Chicago Home
With all those legal implications, most sellers choose to hire a real estate expert. Under Illinois laws, real estate professionals must carry a valid real estate license. Agents and brokers who operate in Chicago, IL, must also register with the city itself.
A real estate agent can help you navigate the complex laws of house selling in the Windy City. Your agent will prepare all the mandatory disclosure forms on your behalf.
Your agent will also put an accurate price on your house before and after the repairs. In doing so, you’ll have a better idea of how much more you can gain if you sell your home ready for occupancy.
Your agent will also help supervise the repairs and renovations of your home. Once ready, your agent will market it to prospective buyers. When offers start rolling in, your agent will review each one and negotiate with buyers.
All these agent responsibilities come with a price, usually in the form of a 6% commission rate. According to Chicago Tribune, though, this went down to as low as 5.26% in 2015. So, it may be possible for you to negotiate the rate when you hire an agent.
You’ll pay the commission rate based on the final sales price of your home. So, if your agent closes a deal for $250,000, you’ll pay the real estate pro about $15,000 for a commission rate of 6%.
Adopting the FSBO Approach
FBSO stands for “for sale by owner.” This means that you sell a house in Chicago without the help of an agent or broker. With this approach, you don’t have to worry about paying commission rates.
However, this also means you’d have to do all the tasks a hired agent would otherwise do. From the disclosure forms to repairs, pricing, and marketing, you’d need to do all these on your own. All these can result in your home being in the market for a longer period.
Still, going with the FSBO approach means you can pocket that 5% to 6% commission rate, so long as you’re up to it.
The Simplest Way to Sell a House in Chicago
If you’ve ever seen those ads saying “We buy houses,” you’ve likely wondered if they’re legit. Most of them are; they’re companies licensed in Chicago as real estate investors. However, you may know them better as “house flippers.”
While there are illegal schemes to look out for, house flipping is a legitimate activity. In fact, flipped homes accounted for 7.5% of all US home sales in the first quarter of 2020. That’s a total of 53,705 flipped (and sold) single-family properties and condos.
One of the biggest benefits of selling your Chicago home to a flipper is that you can sell it as-is. Most real estate investors buy homes no matter the condition, even if they’re decrepit. That’s how flippers make money anyway; they fix and renovate damaged homes and then sell them for a tidy sum.
Chicago house flipping is common, as 66% of residential properties here are at least 60 years old. If your home is one of these and you rather not fix it up before selling, consider working with a flipper. This way, you don’t have to worry about all those major repairs before moving into a new place.
It’s also for this reason that selling to a real estate investor is one of, if not the fastest way to sell your home.
Make Home Selling in Chicago Simpler and Faster
A licensed real estate agent can no doubt simplify the process of selling a house in Chicago. Their services can be pretty pricey, though, so you should also consider the FSOB approach. However, if all you want is to sell a house without fixing it, a licensed real estate buyer is also a good choice.
Ready for more guides like this to help you widen your real estate smarts? Then be sure to check out our other home improvement ideas and plans!