How Much are Typical Seller Closing Costs in Illinois?
And how to save approximately $5,500 in real estate commissions on a typical $180,000 IL home at closing by selling your home For Sale By Owner on Houzeo?
Congratulations! You’ve made it to the finish line. Closing on a home can be one of the most exciting moments as a seller, but it can also be a stressful one if you aren’t prepared. Illinois is one of the most expensive states when it comes to the closing costs. Various regulations also make it one of the most tedious states. As a Houzeo For Sale By Owner (FSBO) Seller, we expect you to go to your closing prepared. Our comprehensive Illinois FSBO Home Seller Guide will help you accomplish exactly that.
In this section we’ll discuss the key documents and expenses you need to be aware of when closing on a home in Illinois.
What Are the Different Home Seller Closing Costs in Illinois?
Here are the typical closing costs in Illinois, ordered by how big they are.
- Mortgage Payoff: If you have a mortgage, the payoff will likely be the biggest item on your closing statement. It includes items like the principal balance, interest accrued from the last payment to the day of closing, recording fee, and any statement fee the lender might charge.
- Real Estate Broker Commissions: The biggest expense for Illinois home sellers is the broker/agent commission. In Illinois, the typical commission is between 5-6% with generally half going to the listing agent and the other half to the buyer’s agent. The buyer’s agent commission is also called the Cooperating Agent Commission. If you’re selling FSBO via Houzeo, congratulations… You’ve likely saved thousands by paying $0 in listing agent commission! Go on. Pop a bottle of the finest Champagne or Scotch. You deserve it.
- State, County, and City Transfer Taxes or Stamps: State and county transfer taxes in Illinois are customarily paid by the seller, but the sellers can negotiate that the buyers pay a part or the entirety of these taxes. Several cities and localities in Illinois charge hefty transfer taxes when property changes hands. Illinois Realtors has a nice summary here you can use to estimate your transfer taxes. Chicago Title Insurance Company too has a useful summary by jurisdiction you can reference here.
- Property Taxes: Depending upon when you close escrow, you may need to pay the buyer a prorated amount of property taxes, or the buyer may need to credit you.
- Title Insurance: The title insurance policy that Sellers provide to the Buyers is a guarantee that the purchaser get a clear title to the property, free of other legal encumbrances that could threaten the Buyer’s interests in the property. In Chicago, sellers pay about $1,130 for houses valued up to $100,000. For properties priced at more than $100,000, the rule of thumb is to add another $20 for every additional $10,000.
- Attorney Fees: Attorneys in Illinois play an important part in the closing process, taking care of contracts and other essential paperwork. Typically, attorneys charge between $450 and $900 in fees, depending on the type of home being sold and the type of sale it is.
- Escrow Fees: Escrow in Illinois is a neutral third party that handles the transfer of the deposits, documents, funds, and other key items in a closing. Typically, Escrow charges in Illinois are relatively lower than other states like California, but home sellers should budget between $200 to $500 or more, depending upon the circumstances of their sale.
- Property Survey: Surveys generally costs between $350 and $550 for a typical Illinois home. They help reassure the buyer that they’re actually getting what they’re paying for.
- Seller Paid Home Warranty: Buyers in Illinois will often ask for home warranty and the sellers often agree to paying for it. It generally comes in around $500 to $800, depending upon the insurance company, coverage, and area.
- HOA Dues, Document Fees, and Transfer Fees: If the property falls under a Homeowners Association, you may be subject to various other charges. These include HOA dues, a document fee at the beginning of Escrow, and a transfer fee at the end of Escrow.
How Should I Prepare for My Illinois Home Closing?
Your closing agent will schedule a date for your closing. Here’s how to prepare for your closing day.
- Review Your Closing Documents in Advance: Closing documents should generally be available to you in advance of the scheduled closing date. Review these documents at length and understand their provisions. Here are some key documents you’ll likely sign at closing:
- The HUD-1 or Closing Disclosure: Most Illinois homes are purchased with a mortgage. If this is the case on your transaction, you’ll get the Closing Disclosure summarizing the costs in detail. If your transaction is all cash, you may get the HUD-1, although this is less common. These documents detail amounts you’re being charged for, your loan payoffs if any, and the net proceeds you will take to the bank. Remember, depending upon how much equity you have in the property, you might be asked to bring a check (or send a wire) on the closing date. Ensure there are no typos in your name, address, property address, bank info, and other details. Then review every amount and the totals to ensure there are no mathematical errors or inadvertent costs. You’ll be surprised how many times these documents have errors – this is one of the reasons our founder launched Houzeo.
- The Deed: This document enables legal transfer of title from the seller to the buyer. Read this document carefully, verifying all details including the legal description of the property, the deed book, deed book page, and the Property Identification Number (PIN), if any. We know of a case where a Seller sold a $94,000 property, but the deed also legally transferred over the Seller’s 5 other homes worth $680,000 over to the Buyer. There was a huge scramble post closing to correct this mistake. It could have been a nightmare for the Seller if the Buyer didn’t honestly transfer the rest of the properties back to the Seller.
- Statement of Closing Costs: This statement summarizes all the expenses involved in the transaction. This document is easier to understand vs. the HUD-1/Closing Disclosure, but they should tie.
- Certificate of Title: Allows you to state that you have the right to sell the property.
- Ask Questions: If this is your first time selling a property, schedule an appointment with the closing agent before the date of the closing. Prior to that appointment do your research and ask clarifying questions on anything you have doubts on.
- Bring TWO Forms of Official ID: There will likely be a licensed notary involved who’ll require that you swear you are who you say you are. Take a valid driver’s license or passport for ID. Carry a secondary ID as well, just in case.
Now you’re ready! You might’ve heard horror stories of people being blindsided by high closing costs in Illinois – but that’s often the result of not preparing and educating themselves ahead of time. If you are a Houzeo For Sale By Owner Seller in Illinois, we want you to be one of the most educated home sellers out there. Next step, log on to Houzeo.com and list your home for sale by owner. You’ll be in full control of your listing, and save thousands in the process!
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