Closing costs in Illinois

Whether you’re in the process of selling your home in the Prairie State or eyeing a new property, understanding the intricacies of the Illinois housing market is crucial. Aside from considering property prices, potential buyers and sellers must also factor in closing costs. But who foots the bill in Illinois, and how much should you budget for? We’ll break it down for you.

How Much are Closing Costs in Illinois?

Closing costs are not one-size-fits-all; they vary based on several factors and differ from state to state. A common way to calculate them is as a percentage of the home’s sale price. According to CoreLogic’s ClosingCorp, the average closing costs in Illinois stand at 2.1 percent. This is relatively higher compared to neighboring states like Indiana (0.9 percent) and Missouri (0.8 percent).

For a median-priced home in the state (valued at $287,400), the closing costs would amount to approximately $6,035. Keep in mind that median prices can fluctuate based on the location within Illinois. For instance, in Peoria, where the median is $155,000, closing costs would be around $3,255. In Chicago, with a median price of $350,000, the closing costs would be approximately $7,350.

Who Pays Closing Costs in Illinois?

Both buyers and sellers incur certain costs during the closing process. Here’s a general breakdown:

Closing Costs for Buyers:

• Lender-related fees: Covering expenses related to obtaining a mortgage, such as application fees, credit checks, and loan origination.
• Inspection and appraisal fees: Including costs for a professional home appraisal and optional home inspection.
• Title-related fees: Encompassing the cost of a title search and title insurance (buyer’s policy is typically paid by the seller, but may vary).
• Escrow fees: Prepayment of certain monthly expenses like property taxes or homeowners insurance premiums, held in escrow.

Closing Costs for Sellers:

• Real estate agents’ commissions: Typically amounting to 5-to-6 percent of the home’s sale price.
• Illinois transfer tax: Usually paid by the seller, but in Chicago, both the buyer and seller share this cost.
• Buyer’s title insurance policy: Typically covered by the seller.
• Prorated property taxes and HOA fees (if applicable) up to the closing date.
• Any concessions or agreements made with the buyer (e.g., repairs), due at closing.

Lowering Your Closing Costs in Illinois

Factoring in closing costs is a crucial aspect of determining your budget for buying or selling a home. Fortunately, there are ways to save on these costs:

For Buyers:

• Explore closing cost and down payment assistance programs for potential grants or low-interest loans.
• Shop around and compare fees and rates with multiple mortgage lenders.

For Sellers:

• Negotiate with your real estate agent for a lower commission rate.
• Consider selling without a Realtor to save on commissions (buyer’s agent commission is still applicable).
• Remember that concessions are negotiable and not mandatory.

In conclusion

understanding and planning for closing costs is a vital step in any real estate transaction. Consulting a local real estate agent with expertise in your specific area of Illinois can provide valuable insights and help you navigate this process effectively.