Calculating the Closing Costs of Your Real Estate Sale
When selling your home, one of the first and most important questions you may have is how much your net sales proceeds will be after other costs are covered. Net proceeds consist of the total sale price minus the closing costs. In addition to the closing costs, you will have to deduct any mortgage payoff amount.
In this article, we'll go over a typical seller's closing costs.
State and County Transfer Taxes
Generally speaking, sellers should budget $1.50 per $1,000.00 of the sale price in Cook County, Illinois.
Municipal (City) Transfer Taxes
Tax stamps for the City of Chicago are $3.00 per $1,000.00 of the sale price. Municipal transfer stamp amount varies from municipality to municipality.
Aurora, it’s $3.00 per $1,000.00; Des Plaines, $2.00/$1,000.00; Hoffman Estates, $3.00/$1,000.00; Park Ridge, $2.00/$1,000.00; Bartlett, $3.00/$1,000.00; Highland Park, $5.00/$1,000.00; Oak Park, $8.00/$1,000.00.
Certain municipalities require buyers to pay for the municipal transfer stamps (Niles, Naperville, etc.). City of Chicago also require buyer to pay $7.50 per $1,000.00 of transfer taxes.
Certain municipalities impose no transfer tax (Northbrook, Glenview, etc.). Certain municipalities impose no transfer tax but require seller to pay inspection fee (Melrose Park, North Riverside, etc.)
Owner’s Title Insurance
Sellers pay owner’s title insurance policy for the buyer. The cost of the owner’s title policy is determined by the sale price. For a home sale price of $200,000, a typical owner’s title policy cost is $1,725; for home price of $300,000, $1,925; for home price of $400,000, $2,145; for home price of $500,000, $2,325; for home price of $600,000, $2,525; for home price of $700,000, $2,725.00. There will be also miscellaneous title related charges to the seller approximately $200-$250 in addition to the owner’s title policy.
Sellers also pay the cost of the survey. A typical survey cost for residential property is around $450-$550.
Illinois issues tax bills a year later, which means the current year’s tax bill won’t come out until next year (2020 real estate tax bill comes out in two installments in 2021, 2021 tax bill will come out in two installments in 2022.) Therefore, sellers and buyers prorate the property taxes for the current year (January 1 through the date of the closing) and sellers give that prorated amount to buyers at closing. Typical proration percentage is $105%, but it can be lower or higher.
Real Estate Broker's Commission
Typically, the broker’s fee is 5-6%.
Attorneys help review the contract, fill in the gaps, negotiate attorney review and inspection items (repair requests), and prepare all essential sellers’ documents such as deed, bill of sale and affidavit of title. Fees vary, but generally won’t exceed $650-$850 for residential sales.
After the inspection, buyers may request various repair requests. In lieu of making repairs, sellers often times provide closing credit to the buyer. This is a matter of negotiation between sellers and buyers.
This article is for general purposes only and not as legal advice. A tailored review and analysis by an attorney is strongly recommended for any real estate transaction. It is advisable that one consult an attorney if they are unsure about anything relating to their real estate transactions. You can contact a Mauck & Baker attorney at (312) 726-1243.