Most Chicago-area homeowners selling their property without a real estate agent should be prepared to provide an Illinois Residential Real Property Disclosure Report, the required Illinois radon disclosure and information, and, for most homes built before 1978, federal lead-based paint disclosures. Depending on the property and transaction, additional disclosures or documents may also be required.
Selling your home without a Realtor does not mean selling it without paperwork.
In fact, one of the potential problems with a For Sale By Owner transaction is that there may be no real estate agent involved to remind the seller which forms should be completed and when they should be delivered.
Here are three of the most important disclosures Chicago-area FSBO sellers should know about before entering into a purchase contract.
1. Illinois Residential Real Property Disclosure Report
The Illinois Residential Real Property Disclosure Report is one of the primary seller disclosures in a residential real estate transaction.
The form asks the seller about certain conditions affecting the property, including known problems involving such things as:
- Flooding or recurring leakage
- Foundation or structural problems
- Roof defects
- Plumbing problems
- Electrical defects
- Heating and air-conditioning systems
- Well or septic systems, where applicable
- Unsafe concentrations of certain substances
- Boundary or property-line disputes
The disclosure is based on the seller’s actual knowledge. It generally does not require the seller to conduct an investigation of the property simply to complete the form.
But there is an important timing requirement that FSBO sellers sometimes overlook:
The Residential Real Property Disclosure Report generally must be delivered to the prospective buyer before the buyer signs the purchase contract.
That is one reason sellers should deal with disclosure paperwork at the beginning of the transaction rather than after a contract has already been signed.
2. Illinois Radon Disclosure
Illinois residential sellers also need to consider the Illinois Radon Awareness Act.
For most covered residential sales, the seller provides the buyer with:
- The Illinois Disclosure of Information on Radon Hazards; and
- The state-approved radon information pamphlet.
The disclosure requirement does not mean every seller must perform a new radon test before selling the property.
However, if the seller has radon test results or other information concerning elevated radon levels, that information may need to be provided to the buyer.
Again, timing matters. The required radon information generally should be provided before the buyer becomes obligated under the purchase contract.
3. Lead-Based Paint Disclosure for Homes Built Before 1978
Federal law adds another layer of disclosure requirements for most residential properties constructed before 1978.
A seller of covered pre-1978 housing generally must:
- Disclose known information concerning lead-based paint and lead-based paint hazards;
- Provide the buyer with available records and reports concerning lead-based paint;
- Give the buyer the EPA-approved lead hazard pamphlet;
- Include the required Lead Warning Statement; and
- Give the buyer the required opportunity to conduct a lead inspection or risk assessment unless that right is properly modified or waived.
This requirement can be particularly relevant in Chicago and its older suburbs, where a substantial amount of the housing stock predates 1978.
Does Selling “As Is” Eliminate the Disclosure Requirements?
Generally, no.
An agreement to sell property “as is” and the seller’s statutory disclosure obligations are separate issues.
Selling a home as is may affect the parties’ contractual obligations regarding repairs, but it does not automatically allow a seller to ignore required disclosures or conceal known material problems.
That distinction is worth understanding before the contract is signed.
What About Condominiums?
Condominium sellers have another category of documents to think about.
In addition to seller disclosure requirements, buyers commonly receive condominium association information and documents concerning matters such as assessments, association finances, insurance, governing documents and pending litigation.
Those requirements should not be confused with the seller disclosures discussed above.
A Chicago condo being sold FSBO can therefore involve considerably more paperwork than simply downloading a purchase contract and filling in a price.
Should You Give the Buyer Every Disclosure at the Beginning?
In many cases, that is the safer practical approach.
Providing the appropriate disclosures early allows the buyer to review them before becoming contractually committed and reduces the likelihood that a missing disclosure becomes a problem later in attorney review or shortly before closing.
It also forces the seller to think about potential issues with the property before negotiations have progressed too far.
A Free Resource for Chicago-Area FSBO Sellers
I created the Free Chicago FSBO Seller Starter Kit for homeowners who are considering selling without a real estate agent.
The kit includes commonly used Illinois seller disclosure forms as well as resources to help you prepare for a private sale, including a pre-contract checklist and a plain-English overview of the FSBO closing process.
You can download the Free Chicago FSBO Seller Starter Kit here:
The forms are a useful starting point, but disclosure requirements can depend on the property and the circumstances of the particular transaction. Sellers with questions about what should be disclosed or how a disclosure should be completed should address those questions before signing the purchase contract.
