Buying a Property With a Contract for Deed in Illinois
Drafting contracts and preparing legal documents can be intimidating, especially if you do not have enough funds for legal guidance. Do you need to get familiar with laws and rules regarding a contract for deed in Illinois, or can you get help in some other way?
DoNotPay can assist you with this matter as this article provides important information about drawing up this type of contract. We can also assist you with the preparation of formal documentation necessary for your smooth operation.
What Is a Contract for Deed in Illinois?
A contract for deed is a document used when purchasing a home or other residential property. This contract also goes by some of the following names:
- Land contract
- Bond for deed
- Agreement for deed
- Articles of agreement
- Installment sales contract
In this type of contract, the buyer of the property does not get the title to the home until he or she has made all the payments defined in the agreement. This type of arrangement differs from the typical mortgage transactions.
A Mortgage vs. a Contract for Deed in Illinois
The following table outlines the differences between a mortgage and a contract for deed:
|Mortgage||Contract for Deed|
The buyer’s failure to pay out the loan will result in:
Key Legal Aspects Regarding a Contract for Deed in Illinois
The Installment Sales Contract Act applies to contracts for deed in Illinois. Here is a list of some important aspects concerning a contract for deed:
- The seller needs to:
- Provide one copy of the contract for deed at least three days before the closing—this time is called the cooling-off period
- Record the contract or a memorandum of the contract in the public land records to acknowledge your legal interest in the property. Otherwise, you can cancel the contract
- Provide you with an account statement when requested
- The seller cannot:
- Charge a prepayment penalty if you decide to make payments before you are required
- File a foreclosure or eviction lawsuit against you until first giving you 90 days to pay any late fees and charges
Keep in mind that a contract for deed has to be in writing. If you are interested in finding out:
- What a contract for deed should contain, you should read about the contract for deed form
- About the disadvantages of this type of contract, you should go through our guide
Use the Cooling-Off Period Wisely
As the Illinois State law sets a three-day cooling-off period for contracts for deed, you are not required to sign the agreement during this time. However, you might want to use this period to:
- Consider your decision
- Read the contract carefully
- Obtain additional information
- Get the property appraised and inspected
- Consult an attorney or a housing counselor
If at any time you believe you are the victim of fraud, you should get in touch with the Illinois Attorney General’s Office.
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|Documents DoNotPay Can Prepare for You||DoNotPay Offers Valuable Information On|
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