You’ve found a buyer for your old house, and you’re ready to head to the closing table. First off, congratulations! This is a huge step, and you deserve a minute to be recognized.
Now, on to the next part...
As your attorney prepares your settlement statement, there are a few closing costs for which you should be prepared. (Although hopefully this isn't the first time you're hearing of them!)
Have you ever heard the old adage that you need to spend money to make money? That holds doubly true for home sales. While sellers won’t need to pay as many fees and expenses at closing as buyers, there are still a number of closing costs associated with selling your home. None of these costs are particularly egregious, and they'll always be part and parcel of closing; we just think it's important to go in to your sale as prepared as possible!
So, just how much should sellers expect to pay at closing? While every transaction is unique, here are a few expenses that you will likely be responsible for…
Attorney’s Fees
In Illinois, attorneys are an absolutely indispensable part of the closing process, taking care of lots of essential paperwork and contract negotiations. Be ready to pay between $400 and $850 in attorney’s fees, depending on the type of home being sold.
State and County Transfer Taxes
Generally speaking, sellers should budget $1.50 per $1000 of the sale price in Cook County, Illinois.
Municipal (City) Transfer Stamps
Tax stamps for the City of Chicago are $3.00 per $1000 of home sale price. This is in addition to the $7.50 that your buyer is paying the city in transfer stamps. The cost of municipal transfer stamps varies from municipality to municipality, and if you're outside Chicago city limits, you can expect them to be a bit less.
Title Insurance
The title insurance policy that you provide to the buyer is a guarantee that the purchaser will be getting a clear title to the property, free of other legal attachments that could threaten the sale. In Chicago, we generally tell sellers to anticipate paying about $1130 for houses valued up to $100,000. For properties priced at more than $100,000, a rule of thumb is to add another $20 for every additional $10,000.
Property Survey
Accurate assessments help reassure the buyer that they’re actually getting what they’re paying for. Expect a survey to run anywhere between $375 and $500.
Prorations
As a seller, you will be liable for current taxes that are not yet paid or due, as well as for any unpaid utility expenses up to the date of closing. For more on prorations and property taxes, you may want to check out our article "I'm Buying or Selling a Home, What Happens to My Property Taxes?"
Recording of Escrow Fees
Escrow fees will be contingent on the sales price of the home; sellers can expect to pay as little as $200 or well above $500, depending on the circumstances.
Real Estate Broker's Commission
The broker's fee can be as high as 8%, but typically averages around 6% of the sale price. Discount brokers and lesser service brokers may charge less (5.5%, 5%, or even a flat fee). They know their value and charge accordingly. Bear in mind that this cost includes your listing brokerage's fees, as well as the "cooperating commission," the fee that the your listing brokerage pays to the brokerage and agent that brought you the buyer. Remember that you didn't pay the agent who represented you when you purchased the home? Well, this is how they get paid!
For more detailed information on taxes and transaction fees by county, or to calculate your costs with your unique information – such as any liens you have on the property – we encourage you to reach out to a Baird & Warner agent. Here at Real Group RE, our team will be able to get you started with a “Seller’s Net Sheet,” so you’ll know just how to prepare for the big day.
Ready to buy or sell in the Chicagoland area? Real Group RE is here to help! Drop us a line with any questions or concerns, and be sure to keep up to date with our latest news and listings over on Facebook and Twitter!
