How Much Does It Cost to Sell a Home in Illinois?
When you're thinking about selling your home, it's easy to focus on one number: the expected sale price. But the amount you sell for and the amount you walk away with at closing are two different things.
Selling a home in Illinois comes with a number of potential expenses, including real estate brokerage compensation, attorney fees, title-related charges, transfer taxes, property tax credits and other closing costs. There may also be expenses before your home ever reaches the market.
Understanding those costs ahead of time can help you make better decisions about pricing, preparing your property and evaluating offers.
Preparing Your Home for Sale
Your first expenses may occur before your home is listed.
Depending on the property, preparing for market might involve repairs, painting, cleaning, landscaping, decluttering, moving or storing belongings, or other improvements.
That doesn't mean every home needs a major renovation before it can be sold. In fact, spending money on the wrong improvements doesn't necessarily produce a better return.
The goal should be to determine which items are worth addressing, which can be left alone and how the property's condition should factor into your pricing and marketing strategy.
Real Estate Brokerage Compensation
If you hire a real estate brokerage to represent you, compensation for those services is one of the costs you'll want to understand before listing.
Brokerage compensation is negotiable. Your listing agreement should clearly explain the compensation you have agreed to pay your brokerage and the services being provided.
Depending on the transaction, there may also be compensation associated with a brokerage representing the buyer. How buyer-broker compensation is handled can vary and may become part of the negotiations surrounding an offer.
Rather than assuming a particular percentage, ask your broker to explain the compensation structure and how different scenarios could affect your estimated proceeds.
Attorney Fees
Attorneys play an important role in Illinois residential real estate transactions.
A seller's attorney may review the contract, handle attorney review, address legal and title matters, prepare or review closing documents and represent the seller through the legal portion of the transaction.
Fees vary depending on the attorney and complexity of the sale, so sellers should confirm the attorney's fee and services directly with the firm they select.
Title and Closing Costs
Before ownership can be transferred, title work is performed to help establish the seller's ability to convey the property and identify matters that may need to be addressed before closing.
A seller may incur title-related and closing charges as part of the transaction. The exact amount depends on the property, sale price, title company and circumstances surrounding the sale.
Existing mortgages, liens or other title issues may also need to be resolved from the seller's proceeds before the transaction can close.
Transfer Taxes
Real estate transfers can be subject to state, county and municipal transfer taxes.
Which taxes apply and the amount due depend on where the property is located and the terms of the transaction. Some municipalities also have their own requirements associated with transferring a property.
Because these costs can vary by location, they should be calculated specifically for the property you're selling rather than estimated using a single statewide number.
Illinois Property Taxes
Property taxes are an especially important consideration when estimating a seller's proceeds in Illinois.
Because Illinois property taxes are generally paid in arrears, the seller may provide the buyer with a credit at closing for the seller's portion of taxes that have accrued but have not yet been paid.
The amount of the credit is determined according to the contract and the circumstances of the transaction.
This can have a meaningful impact on your final proceeds, particularly in areas with higher property taxes.
Mortgage and Other Payoffs
If you have a mortgage, home equity loan, home equity line of credit or another lien secured by the property, it will generally need to be paid as part of the closing.
Your mortgage payoff is not technically a cost of selling the home in the same way as an attorney fee or transfer tax, but it has a major impact on how much money you actually receive.
Your payoff amount may also differ from the principal balance shown on your latest mortgage statement because it can include accrued interest and other applicable amounts through the payoff date.
Inspection and Attorney Review Negotiations
An accepted offer doesn't always mean the financial terms of the transaction are finished.
Depending on the contract and circumstances, issues identified during inspection or attorney review may lead to additional negotiations.
Those negotiations might involve repairs, credits or other agreed-upon solutions. Any concessions you make can reduce your net proceeds, which is why it's important to consider the entire transaction rather than focusing only on the offer price.
Buyer Credits and Other Negotiated Expenses
A buyer may request that the seller provide a credit toward certain allowable expenses or agree to other financial terms as part of an offer.
Whether accepting a request makes sense depends on the overall offer.
For example, a higher purchase price with a substantial seller credit isn't necessarily stronger than a slightly lower offer without one. Financing, contingencies, closing date and other terms can also affect the strength of an offer.
The number that matters most isn't always the number at the top of the contract.
Moving and Post-Closing Expenses
There are also practical costs that don't appear on a closing statement.
Moving expenses, storage, temporary housing, cleaning and expenses associated with purchasing or moving into your next property should all be considered when planning your sale.
If you're selling and buying at the same time, coordinating the two transactions can be just as important as maximizing the sale price.
How Much Will You Actually Walk Away With?
Your estimated proceeds can be thought of relatively simply:
Sale Price
− Mortgage and Lien Payoffs
− Seller Closing Costs
− Tax Credits
− Brokerage Compensation
− Negotiated Credits or Concessions
= Estimated Net Proceeds
The actual calculation is more detailed, but this gives you a much better picture than looking at the sale price alone.
Before listing a property, your real estate broker can prepare an estimated seller net sheet using an anticipated sale price and expected expenses. As offers come in, that estimate can also be updated to help you compare what different offers may actually mean financially.
Start With the Numbers
A good selling strategy begins before the sign goes in the yard.
Understanding your property's likely market value, expected selling expenses and estimated net proceeds gives you the information you need to decide whether selling makes sense and how to approach the market.
At AED Realty, we help Illinois homeowners understand the numbers, prepare their property for market, develop a pricing and marketing strategy, evaluate offers and navigate the transaction through closing.
If you're considering selling, explore our Seller Resources, learn How Your Home's List Price Is Determined, or contact AED Realty to discuss your property and build a plan.
Clarity. Strategy. Execution.