Guide to Multi-Board Contract

At M&Co., we use the Multi-Board Residential Real Estate Contract 7.0. It is long (13 pages!) but contains the most protection for buyers.

Use this handy guide while you read over your contract paperwork. Each numbered section coincides with the numbered sections on the Multi-Board Residential Real Estate Contract 7.0. Should you have any questions, please ask!

  1. The Parties: This section specifies who the buyer is & who the seller is.
  2. The Real Estate: This section specifies what the buyer is buying. If the offer includes parking & storage, we note it here. 
  3. Fixtures & Personal Property: This defines what is included in the sale. Anything attached to the unit (which is considered a fixture) stays unless otherwise noted (kitchen appliances, washer/dryer, lighting). If you are asking for any additional furniture items not noted, we will write those on line 29. 
  4. Purchase Price & Payment: Your opening offer goes here.
    1. If you’d like to negotiate that the seller pay for a portion of your closing costs, we will ask for that here. Note that asking for closing costs reduces your overall number by that amount. For instance, if you offer $250,000 but ask for $5,000 in closing costs, your offer is actually $245,000 to the seller. Please discuss closing costs with your lender.
    2. Your initial earnest money ($1,000) goes here, followed by your final earnest money deposit (amount varies). The initial EM is refundable during attorney review, & it will be deposited in a non-interest bearing escrow account upon receipt. 
  5. Closing: The date you want to close goes here (usually 30-60 days out).
  6. Possession: You will get keys & full possession of the property on closing day, unless otherwise negotiated.
  7. Financing: This section denotes how you are paying for the unit.
    1. Loan Contingency: This section specifies your mortgage terms. We will note the type of loan, amount you are financing, & include an interest rate cap. If for some reason you cannot obtain financing with one lender, this section says that you will try to obtain financing from another lender at an interest rate not to exceed X%. 
    2. Cash Transaction with No Mortgage: If you are paying cash, you will initial here.
  8. Statutory Disclosures: We will mark these boxes if we have received the property disclosures.
  9. Prorations: This section specifies how your taxes & assessments will be prorated.
    1. We always put “TBD” for the tax proration, which means that your attorney will negotiate a fair proration for you. Tax proration is a credit given by the seller at closing that reduces your cash-to-close. It’s given because the tax bills in IL are paid in arrears, & the buyer is responsible for future tax bills which have not yet been billed. Since taxes tend to increase, the credit is prorated at a percentage of the most recent tax bill levied. 
    2. This section defines what your monthly HOA payment is, as well as any known upcoming special assessments. 
  10. Attorney Review: This section says that you have 5 business days to have an attorney review your contract. This can always be extended, if more time is needed.
  11. Waiver of Professional Inspections: N/A unless you are waiving your inspection. 
  12. Professional Inspections & Inspection Notices: This section states that you are going to conduct a home inspection ASAP.
    1. This section outlines the types of repairs that you can negotiate with the sellers, & the types of repairs you cannot. 
    2. This says that you must conduct inspection & make any requests within the 5 day attorney review window. (If needed, the buyer may request a short extension.)
    3. You may cancel the contract at any time during this window.
  13. Homeowner Insurance: This states that if you are unable to obtain homeowner’s insurance for your condo, you can cancel the contract.
  14. Flood Insurance: N/A.
  15. Condo/Common Interest Associations: The content in this section will override any prior communications about association matters. 
  16. The Deed: The seller must provide the deed at closing, which transfers title to the home to you!
  17. Municipal Ordinance Transfer Tax & Governmental Compliance: Chicago charges “transfer taxes” which are a part of your total closing costs. This amount is $7.50/thousand dollars of your purchase price.
  18. Title: The seller must provide the title commitment, which shows all liens & encumbrances, which must be cleared by or at closing
  19. Plat of Survey: N/A for condos.
  20. Damage to Real Estate or Condemnation Prior to Closing: N/A unless real estate is damaged.
  21. Condition of Real Estate & Inspection: The seller must leave the condo “broom clean,” meaning all garbage & possessions should be removed. At your final walkthrough, you will confirm everything is functioning as it was during inspection.
  22. Seller Representations: These are standard seller representations. 
  23. Real Estate Tax Escrow: This explains how taxes will be prorated if any improvements are made. This paragraph rarely comes into effect, as escrows are typical for new construction homes, but not standard resale.
  24. Business Days/Hours: This defines what a “business day” is. 
  25. Electronic or Digital Signatures: This allows us to use Docusign 🙂 
  26. Direction to Escrowee: This outlines how earnest money will be returned if needed.
  27. Notice: This defines what serves as “notice.”
  28. Performance: Time is of the essence! 
  29. Confirmation of Dual Agency: If we are representing the buyer & the seller, we would mark yes for dual agency.
  30. Sale of Buyer’s Real Estate: N/A.
  31. Cancellation of Prior Real Estate Contract: N/A.
  32. Home Warranty (Optional): If the unit contains aging appliances & mechanicals, consider asking for a home warranty up front. This costs ~$500 & lasts for 1 year. Please read reviews. Since home warranties are hit or miss sometimes.
  33. Well or Sanitary Systems: N/A.
  34. Wood Destroying Infestation: N/A.
  35. Possession After Closing: N/A.
  36. “As Is” Condition: This is an optional add-on. It means that you can still conduct your inspection, but you will not ask for any credits or fixes.
  37. Specify Party Approval: N/A.
  38. Attachments: Usually this is not applicable, but if we attach any sort of extra rider to your contract, we would note it here. 
  39. Miscellaneous Provisions: N/A.

…& the rest: The last part of the contract just contains contact info for all parties. Nothing too crazy! You’ve got this!

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