7 Real Estate "Rules" Everyone in Chicago Believes. Illinois Law Says Otherwise.

I've been in real estate for 25 years, and I hear the same "rules" at almost every kitchen table. A friend said it. A cousin swore by it. Somebody read it online. And a lot of them just aren't true.

Some of these myths cost people money. Others cost them a house. So let's bust seven of the most common ones, with links to the actual sources so you don't have to take my word for it.

Myth 1: "You get three days to change your mind after you sign"

This one is everywhere, and it's probably the most dangerous.

There is a federal three-day Cooling-Off Rule. But the Federal Trade Commission says plainly that it doesn't cover sales that involve real estate. (FTC: Buyer's Remorse and the Cooling-Off Rule)

When you buy a home in Illinois, your ways out are the ones written into your contract, like the attorney review and inspection periods you negotiate. Once those windows close, "I got cold feet" isn't a legal exit. Read the deadlines before you sign, not after.

Myth 2: "You need 20% down to buy a home"

Twenty percent down has real perks, but it isn't the entry fee.

HUD's rules for a standard FHA loan allow a 3.5% down payment for borrowers with a credit score of 580 or higher. (HUD Handbook 4155.1, Borrower Eligibility) On the conventional side, Fannie Mae offers 97% loan-to-value options, which means 3% down for eligible buyers. (Fannie Mae: 97% LTV Options)

Lower down payments usually come with mortgage insurance and their own rules, so talk to a lender about what fits you. But plenty of people are waiting years to save an amount they may not need.

Myth 3: "The seller has to tell you everything that's wrong with the house"

Not quite. Under the Illinois Residential Real Property Disclosure Act, a seller has to disclose material defects they actually know about, and they have to give you the disclosure report before the contract is signed. (765 ILCS 77/20 and 77/25)

Here's the part most buyers miss: the same law says the seller isn't obligated to do any special investigation to fill out the form. The report itself warns that a seller not being aware of a problem is no guarantee the problem doesn't exist.

There's also a protection worth knowing. If a seller hands over a disclosure report showing a material defect only after everyone has signed the contract, the buyer gets 5 business days to cancel and get the earnest money back. (765 ILCS 77/40)

Bottom line for buyers: the disclosure is a starting point, not a substitute for your own inspection.

Myth 4: "Real estate commissions are a set percentage"

There's no official rate. The National Association of REALTORS® says commissions are not set by law and are negotiable, and that was true long before the 2024 settlement. (NAR: Compensation, Commission and Concessions)

This one is close to my heart. A lot of sellers walk in assuming they'll pay a 2.5% to 3% listing commission because "that's just what it costs." In my real estate business, sellers pay a 1% total commission, and they still get full service. You're allowed to ask what you're paying for.

Myth 5: "You can tour homes with any agent, no paperwork needed"

Since August 17, 2024, agents who use the MLS have to sign a written agreement with a buyer before touring a home together, in person or by live video. That agreement has to spell out how the agent gets paid and state that commissions are fully negotiable. (NAR: Written Buyer Agreements 101)

You don't need one just to walk into an open house on your own or to ask an agent about their services. (NAR: Consumer Guide to Written Buyer Agreements) But when someone hands you that agreement, read it. You can negotiate the length, the services and the pay.

Myth 6: "It's fine if the seller's agent represents me too"

In Illinois, one agent representing both buyer and seller is called dual agency, and it's only allowed with the informed written consent of every client. (225 ILCS 454/15-45)

The required disclosure is pretty eye-opening. It says a dual agent can't recommend what price you should offer or what the seller should counter with. In other words, on the biggest number in the deal, you'd be negotiating on your own. Some people are fine with that. Just know it before you sign.

Myth 7: "Your homeowner exemption comes with the house"

In Cook County, the Homeowner Exemption renews automatically, but only after you've applied. The Assessor's Office says that if you've never received the exemption on your home, you need to file an initial application. (Cook County Assessor: Homeowner Exemption)

The exemption reduces your home's equalized assessed value by $10,000, so your actual savings depend on your local tax rate. If you bought recently, check your property details on the Assessor's site. If you missed a year you qualified for, the Assessor explains how to ask for a correction through a Certificate of Error.

Bonus: "Pre-qualified" and "pre-approved" aren't magic words

The Consumer Financial Protection Bureau says lenders don't always use these terms the same way, and neither letter is a guaranteed loan offer. (CFPB) The better question is what the lender actually checked: your income, your assets, your credit.

The real rule

The best rule in real estate is simple: when somebody says "that's just how it works," ask where it says so. Usually there's a law, a contract or a form behind it, and the details matter.

Got a "rule" you've always wondered about? Buying, selling or investing anywhere in Chicago or the suburbs? Call or text me at 312.882.9797. Full service, lower commission, and straight answers.

This article is general information, not legal or tax advice. Talk with a real estate attorney about your specific situation.