THE ULTIMATE HOME SELLERS GUIDE PRESENTS:
Chicago home seller costs
Buying a house isn’t cheap, and neither is selling one.
The overall picture
There’s really no point in wasting any time here so we’ll get right to it, when selling a home in Chicago you can anticipate your closings costs to be approximately 8-9%. Let see how you get there:
Realtor fees
We suggested you get a good one for a reason. Realtor fee’s on average can range from 5-6%. This fee covers both your realtor who is selling the house and the buyer agent. Since they do the majority of the realtor work when it comes to selling a house a seller agent typically will net 3.5%. They commit with their time, get professional photos and videos, marketing, open houses, etc. I tell you this to know that your money is going to good use.
Property taxes
In Chicago, you pay taxes in arrears, which means that taxes for last year get paid this year. Say it’s 2021 right now, you will pay your 2020 taxes throughout this year. Taxe rates can vary based on many factors such as your neighborhood, size of the home, which county you are in, and so on. When selling your home you don’t get out of having to pay last year’s taxes unfortunately, you still have to pay for last year’s taxes even if you have moved.
Title insurance
Title insurance protects a new homeowner from issues with your home’s title. If there is someone else who is claiming ownership of the property because of things like outstanding liens from contractors, creditors, or the government you will be protected from someone else claiming these rights whether these issues arise at the closing or years down the road. Trust me when I say title insurance is worth it.
Home Owner Association Fees
If you live in a community that has a Home Owners Association (HOA) and there are any upcoming projects that need to be done such as painting the fence and replacing any lights in the common areas and there will be a special assessment (money out of someone’s pocket) you can anticipate this falling on you. Many times this amount can be nominal but it is something you may have to account for.
Attorney fees
Attorney fees go towards, you guessed it, the attorney. In Chicago, attorneys are required for the transaction of selling your house. This fee will be determined by the lawyer. Though it is an additional fee, make sure to choose your attorney wisely because they can make all the difference.
• I introduced a client to a preferred attorney of mine who is slightly (just slightly) higher than others, and a few years later she had said to me in person “you never skimp on your accountants or your attorneys.” We were in the process of purchasing another 3 flat investment property at the time, she knew what she was talking about.
Transfer tax
A transfer tax, also known as a government transfer tax or title fee, is a tax you will pay when the title for the home passes from you to the buyer at the time of closing. This tax is charged by the state you live in, and the cost varies by state.
Most of these closing costs are paid by the home seller, but this does not mean that they can not be negotiated. I would recommend doing this early on in the negotiation process and not halfway through attorney review. Surprising someone with additional closing costs never fairs well for either party.
In the end selling a house costs money just like buying one does, but you can rest assured that the payments required are ultimately paying for assurance that the job is done right.
