How to Draft a Legally Sound FSBO Purchase Agreement in Illinois
- Tom
- May 10
- 5 min read
Selling your home without a real estate agent—commonly referred to as a For Sale By Owner (FSBO) transaction—can save thousands in commission fees. However, one of the most critical steps in an FSBO sale is drafting a legally sound purchase agreement. This document is the backbone of your transaction and outlines the terms, conditions, rights, and responsibilities of both the buyer and the seller. In Illinois, this contract must meet state-specific legal standards to be enforceable and to protect both parties.
At The Real Estate Law Firm, we help FSBO sellers navigate the legal intricacies of real estate transactions to ensure a smooth and legally compliant sale.
Why the Purchase Agreement Matters
The FSBO purchase agreement isn't just a formality—it’s a binding legal contract. It determines:
The purchase price and payment terms
Property details and condition
Responsibilities for taxes and repairs
Contingencies (like financing or inspections)
The timeline and process for closing
A poorly drafted agreement can lead to disputes, financial loss, or even a failed sale. That’s why attention to detail is critical.
Step-by-Step: Drafting a Legally Sound FSBO Purchase Agreement in Illinois
1. Identify the Parties and Property
Start by clearly identifying the legal names of the buyer(s) and seller(s), and the full address and legal description of the property. This ensures there's no confusion over who is involved and what is being sold.
Tip from The Real Estate Law Firm: Double-check that names match those on the deed and ID to avoid delays during closing.
Need help identifying legal property details? Contact us
2. Include the Purchase Price and Payment Terms
Spell out the purchase price in both words and numbers. Then detail how the buyer will pay:
Down payment amount
Earnest money deposit (including how it will be held and when it becomes non-refundable)
Financing (cash or mortgage, and what type)
Also note if the buyer is using any assistance programs or grants that may require special documentation.
3. Set Contingencies
Contingencies allow the buyer or seller to cancel the contract under certain conditions without penalty. Common Illinois contingencies include:
Financing contingency – if the buyer can't secure a mortgage
Home inspection contingency – allows for negotiation or cancellation if major issues are found
Appraisal contingency – protects the buyer if the property appraises for less than the purchase price
Attorney review contingency – a five-business-day window for attorneys to review and modify the contract
In Illinois, attorney review is highly recommended—even in FSBO deals. At The Real Estate Law Firm, we provide affordable contract review to protect your interests.
4. State What’s Included in the Sale
Be specific about what is included with the property. Fixtures (e.g., light fittings, faucets) are generally assumed to stay, but appliances, furniture, or even curtains may be negotiable. List these items to avoid misunderstandings.
5. Set the Timeline
Outline key dates:
Offer acceptance deadline
Inspection period
Financing approval deadline
Closing date
Ensure the timeline is realistic based on local lending and title processes.
6. Detail Responsibilities for Repairs and Taxes
Illinois law does not require sellers to repair defects uncovered during inspection. However, your agreement should state:
Whether repairs will be made
Who pays for them
How property taxes will be prorated
Whether the seller will provide a home warranty
This section helps avoid post-closing conflicts.
7. Address Disclosures and Legal Requirements
Illinois requires sellers to complete a Residential Real Property Disclosure Report. If the property was built before 1978, a lead-based paint disclosure is also necessary. These should be attached to the purchase agreement.
Legal Insight from The Real Estate Law Firm: Failure to provide mandatory disclosures can allow the buyer to cancel the sale or sue after closing. Always comply with these requirements.
8. Include Default and Dispute Resolution Terms
What happens if one party backs out? The contract should outline the consequences:
Whether earnest money is forfeited
Whether the wronged party can sue for specific performance
The method for resolving disputes (mediation, arbitration, or court)
These clauses help prevent confusion and protect your legal options.
9. Add Signatures and Notarization
Once finalized, all parties must sign the agreement. Though not legally required, having signatures notarized or witnessed can add an extra layer of protection and credibility.
10. Have an Attorney Review the Agreement
Even if you use a template or a real estate form, it's crucial to have a legal professional review the final agreement before signing.
The Real Estate Law Firm offers FSBO contract drafting and review services tailored for Illinois sellers. We ensure the agreement reflects your intentions, complies with state laws, and minimizes future risks.
Final Thoughts
Selling your home without an agent gives you control, but it also places legal responsibility squarely on your shoulders. The FSBO purchase agreement is the most important document in your transaction—get it right, and you’ll be on your way to a smooth sale. Get it wrong, and you may face costly consequences.
That’s why many FSBO sellers in Illinois rely on The Real Estate Law Firm to guide them through the legal process, review their agreements, and protect their interests from offer to closing.
FAQs:
1. Do I need a lawyer to draft an FSBO purchase agreement in Illinois?
It’s not legally required, but it’s highly recommended. Illinois allows attorney involvement during the five-day attorney review period. The Real Estate Law Firm can help you draft or review your contract.
2. Can I use a template from the internet?
You can, but templates may lack Illinois-specific requirements. It’s best to have an attorney review any generic forms before use.
3. Is a verbal agreement to sell my home legally binding in Illinois?
No. Real estate contracts must be in writing to be enforceable under the Statute of Frauds.
4. What’s the typical earnest money amount in Illinois?
It varies, but 1–3% of the purchase price is common. The amount should be clearly stated in the purchase agreement.
5. What disclosures are mandatory in Illinois FSBO sales?
You must provide a Residential Real Property Disclosure Report and, if applicable, a lead-based paint disclosure.
6. Can the buyer cancel after signing the agreement?
Yes, if contingencies apply (e.g., failed inspection or financing). Otherwise, cancellation may result in loss of earnest money or legal consequences.
7. Who drafts the FSBO purchase agreement—the buyer or the seller?
Either party can draft it, but sellers often initiate the contract in FSBO deals. Both parties should review it with legal counsel.
8. What happens during the attorney review period?
Each party’s attorney can propose modifications. If no agreement is reached, either side can cancel the contract without penalty.
9. Do I need to include fixtures and appliances in the agreement?
Yes. Clearly list what is and isn’t included to prevent disputes.
10. How can The Real Estate Law Firm help with FSBO agreements?
We assist with contract drafting, attorney review, disclosure preparation, and closing coordination—all tailored to Illinois laws.
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