Inspections: What Buyers and Sellers Need to Know

There are two main types of inspections in a typical Illinois residential real estate transaction. Understanding both is important whether you are buying or selling.

1. City Occupancy Inspections

These inspections are required by the city or municipality and must be completed and passed before a buyer can legally occupy the home after closing.

• ✓ Typically cover electrical, plumbing, structure, and sometimes HVAC or other safety systems.
• ✓ The city inspector identifies any code violations or safety issues.
• ✓ All issues must be resolved (which may require a re-inspection) before the city issues an occupancy permit.
• ✓ The buyer applies for occupancy after the sale is complete.

2. Home Inspections (Buyer's Choice)

Under the standard Contract to Purchase Residential Real Estate used in Illinois, the buyer has the right to inspect any portion of the property at their own expense during the inspection contingency period. Common inspections include:

• ✓ Full home inspection by a licensed home inspector
• ✓ Sewer line scope (camera inspection)
• ✓ Radon testing
• ✓ Termite and wood-destroying insect inspection
• ✓ Well and septic inspection (if applicable)
• ✓ Other specialized checks: mold, chimney, roof, foundation, and more

The buyer decides what inspections are needed and pays for them. Sellers must make the property reasonably available during the agreed timeframe.

What Happens After a Home Inspection?

After the buyer receives the inspection report, they review the findings with their agent. Reports can be lengthy and list every observed condition, even minor or cosmetic items, which can feel overwhelming at first. The buyer then decides whether to:

• ✓ Accept the property as-is (no requests)
• ✓ Request repairs or credits for specific issues
• ✓ Terminate the contract (if within the contingency period and allowed by the contract)

If requests are made, the buyer's agent prepares an Inspection Response document. For example:

The seller then has three options:

1. 1
   Agree to repair

   Fix the issue at their own expense.

2. 2
   Reject

   Refuse the request. The buyer may then accept the property as-is or terminate the contract.

3. 3
   Counter

   Offer partial repair, a credit at closing, or another compromise. For example, "$50 toward closing costs" in lieu of fixing a simple lock.

Both parties must reach a written agreement within the timeframe specified in the contract (usually 10 days after the Inspection Response is delivered). If no agreement is reached, either party may terminate, subject to contract terms.

Key Points from the Contract (Paragraph 11)

The standard Illinois residential contract includes important language about inspections:

• ✓ The property is sold "AS IS" with no warranties, but visible conditions should be reflected in the price or addressed in the contract.
• ✓ Buyers are encouraged to inspect carefully or hire professionals. Agents are not experts in structural or environmental issues.
• ✓ Minor repairs, routine maintenance, and cosmetic items such as painting or decorating do not count as defects.
• ✓ Buyers must deliver an Inspection Response within the timeframe (usually 20 days after effective date or 10 days before closing, whichever is earlier).
• ✓ If defects are found, parties have time to negotiate repairs, credits, or termination.
• ✓ Environmental or structural defects have special rules, including remediation options and escrow for repairs.

For the full language, refer to Paragraph 11 of your specific Contract to Purchase Residential Real Estate.