Selling Your Chicago Property?
When you sell your Chicago property you should know your typical closing costs for a seller. The most important thing should be the bottom line figure you’ll walk away with after closing. What you walk away with is more important than your gross sales price.
Regardless of how much equity you have in your home, you should get an accurate net sheet (closing cost sheet showing your walk away figure) up front so that you can be prepared to make a decision quickly on any offer presented. Do you like negotiating blindly? I didn’t think so, GET A NET SHEET!
It’s crazy to me how many sellers list their properties without having an idea of what their walk away figure it going to be. Without knowing the typical closing costs involved for a seller, how can you determine what an acceptable sales price is for your property?
One of the first things you should do before you put your home on the market is to ask your agent to prepare a net sheet. A net sheet should give you accurate information on the NET number you will walk away with after all typical closing costs for a seller. This is the number you should be most concerned with. When you have a net sheet done up front, you are able to make a decision fast and know what to expect.
I had a client who bought their condo in 2007 at the absolute peak of the market. Even when we sold their condo they were still underwater on their property, but THEY HAD TO MOVE. When I arrived at the condo I found out they were about to fire their previous real estate agent. The condo was listed for $219,900 for over 250 days!!! I was amazed to find out they had no idea what the total estimated closing costs were. The very first question I asked them is if anyone ever prepared a net sheet for them. The answer was no.
“How are you to make an educated decision when you get an offer on your property without knowing your costs?”
They told me that they never thought about it that way. They were prepared to bring up to $50,000 to closing just to get out of this home and into the suburbs. They had no idea all they needed to do was lower their price, and implement a real marketing plan. Even with a lower sales price, they were no where near having to bring in $50,000 to closing.
Don’t you think that you would want to know what dollar amount you were going to bring into closing BEFORE you signed a contract to sell your home?
Back to the story…
The listing was cancelled and we waited 1 week to re-list it so that we could reposition the home properly and get the right marketing plan going. We started as a slightly lower price, but this time the seller understood exactly how much money would be brought to closing based on sales prices that could be offered at various price points. We reduced price to where I advised them and in under 35 days the property was sold.
The sad part is that the seller could have been out of this property a lot sooner if they had the right information and was educated on the NET number they would be walking away with up front. I do not take credit as being some kind of super agent, but this is common sense to me. People want to know what their bottom line is. There is no point trying to sugar coat anything, so it is my job to tell them and not beat around the bush.
Here’s a good estimate of Chicago Closing Costs
Realtor’s Commission– Commissions should be around 5-6% of the sales price depending on your agent. Many people view this as a burdensome cost of doing business, but I disagree. If you have a good agent who knows how to properly market your home that results in minimum sales price of 5-6% higher then where’s the cost?
Title Fees-This will vary on sales price and title company, but most title companies will range in the $1,200($100,000 purchase price) to $3,000 ($1,000,000 sales price) expense. The seller in Illinois is responsible for paying the title insurance. There will be some miscellaneous title fees as well.
Attorney’s fees-Illinois is one of 2 states that I know of that has real estate attorneys close transactions. Their fees tend to range in the $500-$700 range.
Survey fee-If you are selling a detached single family house, you will need to get a survey of the property. This usually costs around $500-$750.
Real Estate Tax Prorations-In Illinois the seller has to credit the purchaser with a real estate tax credit for their unpaid share of taxes. We pay taxes in arrears in Illinois. This means that we are always paying our property taxes one year behind. Plan on crediting the buyer with about a full year’s worth of real estate taxes. This is not really a cost since it’s a bill that you owe since you occupied the property during the time the bill was due, but it will deduct from your bottom line. When you purchased the property you should have also received a tax credit from the seller for the the prior years unpaid share of taxes.
Real Estate Transfer Stamps/Taxes-This will vary based on county and city. The seller in Illinois pays for the state and county transfer taxes. In the city of Chicago the seller is responsible for part of the city tax which is $3.00 per thousand dollars spent as well! The state transfer tax is $1.00 per thousand dollars. The county transfer tax is $0.50 per thousand dollars.
Payoffs To Any Existing Loans-This is your payoff owed is their is debt on the property.
These are the majority of expenses involved when selling your house. There will be are some miscellaneous fees, but the major closing costs are covered here. When you eventually get an offer for your property this is very important number to know. If you would like a more precise closing cost estimate on your home please email me at ChicagoRealEstateDude@gmail.com. I will put together something more accurate for your specific situation.
Have Any Questions?
When I meet with a potential seller client I make I walk them through the entire house selling process up front. This will help you decide if selling your home is right for you at this time. If you would like to to set up a time to see how if selling your property is right for you, just fill out the form below or contact me and I will be glad to assess your situation. Don’t worry I don’t bite and there is no charge to have a conversation :).
Want To Get An Accurate Estimate of Your Closing Costs?