Closing Costs in Illinois: A Guide for Sellers

Reconveyance fee

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

Your mortgage lender is responsible for recording this deed, and the exact fee can vary depending on your specific location, whether it’s determined by your 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 Illinois, for example, the seller is typically responsible for covering transfer taxes, which are calculated based on the property’s sale price.

At the state level, Illinois imposes a transfer tax on the sale of real estate. In addition to this, counties can levy their own transfer tax; Cook County, for example, has its own tax for properties changing hands within its borders. Chicago also imposes its own transfer tax.

The tax is levied at a rate of $0.50 for each $500 of value or fraction thereof.

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 real estate agent may suggest consulting one, particularly if your sale is complex.

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

In Illinois, sellers might find themselves responsible for certain costs at closing due to financing concessions agreed upon during the negotiation process. These concessions often involve covering costs like repairs, closing fees, or even home warranties. A typical concession is repair credits, which may come into play when a buyer includes a contingency in their offer, usually related to the home inspection.

If the seller chooses not to address repairs identified by the inspector, they can offer repair credits to the buyer at closing instead of making the repairs themselves. However, it’s worth noting that in a seller’s market, such concessions are less common since contingencies can make offers less appealing to sellers.

Miscellaneous closing costs/fees

These are some of the most common closing costs you’ll encounter as a seller in Illinois. However, it’s essential to remember that many of these costs can be negotiable. Your buyer might be open to sharing some of these expenses, or a real estate attorney or agent might be able to help you secure more favorable terms.

If you prefer a streamlined process without the hassle of negotiating or managing closing costs, consider HomeLight’s Simple Sale program. We simplify the home-selling process in just three easy steps. Provide some basic information about your home, speak with one of our Home Consultants, and you could sell your home in as little as 10 days.

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