Closing Costs in Chicago: A Guide for Sellers

Reconveyance fee

After the sale of your home is completed and your mortgage is paid off, you will typically need to cover a reconveyance fee. This fee is associated with receiving a reconveyance deed, which officially releases you from your mortgage debt.

The reconveyance deed must be recorded by your mortgage company, and the cost of this fee can vary depending on your location, depending on the city, state, or county.

Realty transfer tax

You also might be responsible for what’s known as a realty transfer tax. These are fees assessed by local governments whenever a property changes ownership.

These taxes are sometimes called a “Deed Excise tax” or a “Documentary Stamp tax.” Who ultimately pays these taxes depends on the state, city, or county where the sale occurs.

In Chicago, for example, the seller is typically responsible for covering transfer taxes as part of the closing costs, but depending on the terms of the sales agreement, this can sometimes fall to the buyer.

Real estate agent commission

Unless you’re selling your home for sale-by-owner, you’ll likely have used a local agent. Research indicates that an agent’s expertise can significantly impact your sale: In 2023, homes sold with an agent’s assistance had a median price of $405,000, compared to $310,000 for FSBO sellers.

Working with a real estate agent means paying a commission. This fee covers various services, such as accurately pricing your home, marketing it effectively, and negotiating with buyers to ensure you receive the best possible price and terms.

It should be noted, however, that on March 15, 2024, the National Association of Realtors (NAR) announced a landmark lawsuit settlement that will change the way real estate agent commissions are handled in the future. These changes will “decouple” seller and buyer agent compensation. Industry experts predict that this decoupling will likely lower agent fees and give buyers the ability to negotiate commission amounts directly. Learn more.

HomeLight’s transaction data reveals that the national average real estate agent commission is 5.8% of the property sales price. This commission typically includes fees for both the listing and buyer’s agents, with sellers customarily covering the cost.

Use HomeLight’s commission calculator by entering your city for commission data tailored to your specific area.

Attorney Fees

Some states require an attorney to be present when closing the sale of a property.

Real estate attorneys are not essential for closing in Illinois, but your attorney might suggest working with one anyway.

Homeowners Association/Condo Fees

One of the biggest sticking points for sellers is the fees levied by their homeowners’ association (HOA) or condominium association fees.

Like other fees we’ve discussed, these will vary, not just because of the different rules and regulations of your local HOA but also because HOA regulations vary greatly depending on the state. These fees (or dues) are usually prorated at the time of the sale.

The average monthly HOA fee in Illinois is $387.

Seller’s concessions

Sellers may owe money at closing due to financing concessions agreed upon during negotiations. These concessions can include covering costs for closing fees, necessary repairs, or providing home warranties.

One common seller concession is offering repair credits. This option is often utilized when a buyer’s offer includes a contingency, typically linked to the results of a home inspection.

If the seller declines to make the necessary repairs identified during the inspection, the buyer may withdraw from the sale while retaining their earnest money. In such cases, sellers can offer repair credits at closing to cover the estimated costs instead of handling the repairs themselves. However, these concessions are less frequent in a strong seller’s market, as contingencies may deter potential buyers.

Miscellaneous closing costs/fees

These are some of the most common closing costs you’ll face as a seller in Chicago. However, keep in mind that many closing costs can be negotiated. Your buyer may be open to negotiating some of these expenses, and a real estate agent or attorney could help you secure a more favorable deal.

If you want to avoid the hassle of managing closing costs or working with an agent, HomeLight offers a Simple Sale program. This service streamlines the process, allowing you to sell your home in as few as three steps. Just provide basic information about your property, consult with one of our Home Consultants, and you can close the deal in as little as 10 days.

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