Who Pays Closing Costs in Illinois?

In Illinois real estate transactions, both buyers and sellers incur closing costs. These expenses are separate from the property’s purchase price and cover various fees and charges needed to finalize the transfer of ownership. Closing costs include services and taxes required to complete the transaction legally.

Buyer’s Typical Closing Costs

Buyers in Illinois are responsible for closing costs, primarily those related to securing a mortgage. These often include lender fees for processing the loan application, such as loan origination, underwriting, and processing fees. Loan origination fees typically range from 0.5% to 1% of the loan amount.

An appraisal fee is a common buyer expense, required by lenders to assess the property’s value. In Illinois, appraisal fees for a single-family home range from $450 to $650, but can reach $1,800 based on complexity. A credit report fee, usually less than $30, covers the cost of obtaining the buyer’s credit history.

A survey fee may be incurred if required by the lender to determine property boundaries and easements. While sellers often provide a survey in Illinois, a buyer’s lender might mandate a new one, costing $400 to $500. Lender’s title insurance is a typical buyer’s cost, protecting the mortgage lender against title defects. This policy is usually required by lenders, with premiums based on the loan amount.

Recording fees are paid by the buyer to register the deed and mortgage with the county recorder’s office, making the ownership transfer public. These fees vary by county but are generally a set amount per document. Buyers also pay their own attorney fees for legal representation, typically ranging from $500 to $1,500 for residential transactions.

Prepaid expenses are another buyer’s closing cost category, involving items paid in advance. These include prorated property taxes, homeowners’ insurance premiums, and potential homeowner association (HOA) dues. Property taxes in Illinois are often paid in arrears; the buyer receives a credit for the seller’s portion at closing and then assumes responsibility for the full tax bill. Escrow fees, if applicable, cover the cost of a neutral third party holding funds and documents until sale conditions are met.

Seller’s Typical Closing Costs

Sellers in Illinois incur various closing costs, with real estate broker commissions being the most substantial expense. These commissions, generally 5% to 6% of the home’s sale price, are paid to both the listing and buyer’s agents for facilitating the sale.

Illinois levies real estate transfer taxes, typically the seller’s responsibility at the state level. This state tax is approximately 0.15% of the home’s sale price. Some counties and municipalities also impose their own real estate transfer taxes, which vary by location.

The owner’s title insurance policy is a common seller expense in Illinois, protecting the buyer against future title claims or defects. While benefiting the buyer, sellers customarily pay this premium. The cost for an owner’s title insurance policy ranges from $1,950 to $3,500, ensuring a clear title for transfer.

Sellers are also responsible for their own attorney fees. An attorney represents the seller’s interests, reviews contracts, and ensures legal compliance. These fees usually fall within the range of $500 to $1,500 for residential transactions.

Prorated property taxes are another adjustment for sellers at closing. The seller is responsible for their portion of property taxes up to the closing date, which is credited to the buyer. Similarly, any outstanding or prorated HOA dues up to the closing date are the seller’s responsibility.

The outstanding mortgage payoff is a significant financial obligation for sellers. This includes the remaining principal balance, accrued interest up to the closing date, and any prepayment penalties. This payoff ensures the seller’s mortgage lien is released, allowing a clear title transfer.

Shared and Negotiable Closing Costs

While closing costs in Illinois have typical allocations, many are negotiable between buyer and seller. The final distribution is determined by the real estate contract’s agreed-upon terms. Market conditions influence negotiations; a buyer’s market may allow more seller concessions, while a seller’s market leads to fewer.

Some costs, traditionally assigned to one party, can be split or shifted through negotiation. For example, the owner’s title insurance policy, commonly paid by the seller, can be negotiated for the buyer to cover a portion or all of it. Attorney fees, while usually paid individually, could also be negotiated for sharing in certain circumstances.

Buyers might request repair credits or concessions from the seller. Instead of physical repairs, sellers may contribute towards the buyer’s closing costs. This benefits both parties, providing the buyer with funds post-closing and simplifying the transaction for the seller.