Buying a house in Illinois is more complicated than simply finding your dream home and moving in. You’ll want to take the time to determine how much you can afford to spend, where your ideal city, town, or neighborhood might be, and what features you want in a home. It’s also crucial to understand key legal issues in your state, such as those involving seller disclosures and purchase contracts.
With proper preparation, careful choice of a real estate agent, and prudent use of other qualified professionals, buying a home in Illinois should be a positive experience.
Are You Ready to Buy a Home in Illinois?
The so-called Prairie State offers a strong economy with high salaries and a low cost of living, cities with rich histories, delicious food, exciting culture and sporting events, and architectural wonders, and magnificent parks.
That's why, despite ups and downs in the national housing market, the Illinois market has remained strong, with home prices going up in 2024 (according to information from the Illinois REALTORS Association). The median price statewide was $295,000 in late 2024. Unfortunately, the rising prices can make purchasing a home a challenge financially and otherwise, especially with the modest inventory of available homes.
Since, you've got competition from fellow house-hunters, you'll want to research the local market (as you're starting to do here), visit homes to get a sense of what's available in your price range (allowing for possible bidding wars that take the selling price way over the list price), and get your finances in order.
Have You Saved Up for a Down Payment?
Traditionally, home buyers put down up to 20% of the purchase price on a home. Lenders like to see that much (and are delighted to see more), because it reduces their risk if you stop making your monthly payments or otherwise default and they then have to foreclose.
You've probably been setting money aside for a down payment already, but now is the time to ratchet that process up, and to avoid making any major new purchases (particularly on credit). After all, 20% of a home priced at the median in Illinois is $59,000, which isn't exactly pocket change.
Illinois also offers programs to assist with down payments.
Will You Need a Home Loan for the Purchase?
Assuming you'll need to take out a home loan (a mortgage), be sure to learn what's available, including government-backed options. Also check on your credit report, which will be one of the first things a bank or other institutional lender looks at, to see whether you're a major risk. You can view your report for free through annualcreditreport.com). The next important step is to correct any mistakes you find there.
Next, consider consulting with a mortgage broker to see what price range of houses you'll qualify to borrow money for. The broker can also help you obtain mortgage preapproval, which can be crucial to have if and when you're compete with other would-be buyers. Mortgage brokers are normally paid on commission, in the 1% to 2% range, depending on the loan amount and other factors.
Particularly if money is tight, there's no shame in deciding that you'll want to keep renting for now. Another factor is how settled your life is. As a broad rule, the upfront costs make buying a house financially risky unless you plan to stay in it at least five years. If you're a natural nomad, or possibly interested in applying to schools out of state or looking for a new (non-remote) job, now might not be the time.
If you are ready to buy, though, you'll likely want to check in with prospective real estate agents, as described further below.
Where in Illinois Do You Want to Buy?
Perhaps you already have a city, town, or even neighborhood in mind. If not, a number of resources will allow you to narrow your search, ranging from simple online searches such as "Is X a good place to live?" to sites such as bestplaces.
Before getting overwhelmed with all the data, it's worth creating a list of factors most important to you personally, such as:
- quality schools and universities
- gourmet or ethnic restaurants or groceries
- proximity to nature and culture
- excellent medical care
- lakefront or inland location
- low crime levels, and
- thriving arts or crafts scene.
Many of these factors will increase your house's long-term value, too, thus making it a sound investment.
Advantages of Working With a Real Estate Agent
Before buying a house, condo, or other type of property in Illinois, you’ll probably want to contact a real estate agent. That person can help you locate the best home for your needs and handle all the complex procedures involved with the purchase. Some of the benefits of using a real estate agent include their:
- knowledge of the community, median home prices, and market conditions
- ability to match homes to your needs and budget
- experience preparing a viable offer and handling other paperwork, and
- central role in negotiating the final deal.
Your agent should be able to help you every step of the way, from drafting your written offer and negotiating with the seller on price and other key terms to coordinating the escrow process and house closing. Your real estate agent should also help you locate other professionals to assist you in the home-buying process, including mortgage brokers and home inspectors.
The best news is that working with a real estate agent might not cost you anything. Traditionally, the seller pays the entire real estate commission; around 5% to 6% of the house sale price, which is then split between the seller’s agent and buyer's. Although recent lawsuits might cause a rethinking of that model, it hasn't yet changed radically.
Personal referrals from other home buyers are usually the best way to select a real estate agent. You can find licensed Illinois real estate agents at the Illinois Department of Financial and Professional Regulation’s Division of Real Estate website. Other useful resources include websites such as Zillow, which offer customer reviews of real estate agents.
Be sure the agent you choose has ample experience, good references, and qualifications to meet your house-buying needs in terms of your ideal location, type of property, and budget.
Seller Disclosure Requirements in Illinois
State law in Illinois (765 Illinois Compiled Statutes §§ 77/5 and following) requires sellers to give buyers a filled-out disclosure form, which includes details on material defects or risky conditions or situations such as cracks in the foundation, unsafe drinking water, disputes with neighbors over boundary lines, past meth lab use, or a termite infestation, if they would affect the value of the property or the health or safety of occupants.
Certain types of sales (such as newly built homes) are exempt from state disclosure rules.
Illinois also requires sellers to provide radon disclosure pamphlets (per the Radon Awareness Act, 420 ILCS § 46/1 et seq.). The Illinois Emergency Management Agency recommends that buyers have the house tested for radon before purchasing. A licensed radon mitigator can easily correct high levels of radon found in the house.
Seller disclosures are important for you as a buyer, since just looking at a property might not be enough to tell you what problems its owner encountered while living there or might arise in the future due to existing concerns.
In addition to state-required disclosures, sellers of houses built before 1978 must comply with federal Title X disclosures regarding lead-based paint and hazards. See the lead disclosure section of the EPA’s website for details.
Conducting Home Inspections in Illinois
Buyers should not rely solely on the home seller's disclosures, but should hire an independent home inspector to examine the property. Even after having lived in the property, the seller is unlikely to know all its troubles, particularly if the areas such as the attic or subspace are difficult to access.
A well-written inspection report will discuss problems as far-ranging as the heating and cooling systems, electrical systems, plumbing, walls, drainage, basement, foundation, and flooring.
Many homebuyers include a clause in their purchase offer making the sale's closing contingent upon a satisfactory inspection report. This makes sure that if any unacceptable material defects exist on the property, the buyer has a chance to renegotiate or cancel the sale.
If you're in such a tight market that you're tempted to waive (go without) the inspection contingency so as to make your offer stand out, do what you can to protect your interests in other ways. For example, you might bring a contractor or friend with relevant knowledge and skills to your house visits, so you'll have some idea of what you're getting yourself into. Some home sellers also commission their own inspection report before putting the house on the market, but they might not have chosen the most nitpicky inspector out there, so do some research on that inspector's reputation before staking your future on the results.
Real Estate Purchase Agreements in Illinois
A purchase agreement is a legal document containing important terms and conditions of your real estate transaction. It must be in writing and signed by both parties (buyer and seller), and include an offer to sell or purchase, an acceptance of the offer, the sale price, and an adequate description of the property. As the buyer, you will normally be the first one to prepare the form.
Illinois is considered an attorney-review state. This means that it is customary for both parties to have a real estate lawyer look over the purchase agreement before it is finalized. The purchase agreement will have terms regarding how many days each party has for the attorney review (typically five) and what happens if the attorneys fail to reach an agreement during this time.
Ordinarily, both parties can walk away from the purchase agreement with no penalty during this review period. The attorneys will review the entire agreement and can propose modifications to any part of the agreement except the purchase price and the broker's fees. The attorneys are likely to propose modifications after the house has been inspected, so the attorney review period and the house inspection tend to happen during the same time frame.
Addressing Title Issues in Illinois
A buyer should always obtain a title search from a title company before purchasing a home (and if taking out a mortgage, will likely be required to do so by the lender). The company searches public records and other sources for any liens, easements (such as the utility company’s right to access part of the property), or other encumbrances or title restrictions that could affect your legal ability to own or use the property.
Under the Illinois purchase contract, the seller is expected to correct those problems as a condition to closing.
If your mortgage lender doesn’t already require it, consider purchasing a title insurance policy to protect your title to the property against adverse claims by third parties, or any clouds on the title missed by the title search.
Working With a Lawyer in Illinois
Although Illinois does not require buyers to use a lawyer to prepare the purchase agreement and other paperwork related to buying a house, state custom does require that an attorney review the purchase agreement before finalizing the purchase.
You might also want to work with an attorney in special situations, for example if purchasing a house jointly with others and in need of help structuring your co-buyer agreement. Or, you might need a lawyer if problems show up during escrow or the house closing.
Check out our lawyer directory to find an experienced real estate attorney in Illinois.