You’ve likely heard about closing costs, but do you know everything that they include? Check out our closing cost “FAQ” to learn more about what closing costs are all about.
What Are Closing Costs Exactly in Chicago?
Closing costs refer to all of the fees that must be paid at the closing table. Depending on where you live, the fees and costs can vary. But generally, closing costs include, but are not limited to:
- Notary fees
- Transfer Costs
- Transfer Taxes
- Appraisal Costs
- Inspection Fees
- Origination Fees
- Recordings Fees
- Title Insurance
- Several miscellaneous additional titles fees
- Survey fees
- Underwriting Fees
- Bank Fees
- Courier Fees
- Wire Transfer Fees
- Liens against the home will need to be paid to clear the title
- Credit Report Fees
- Administrative Fees
- Attorney Fees, If Applicable
- The balance of your mortgage or loans against the home
- Possibly repairs or pest control if this has previously been agreed upon
- COMMISSIONS!
Who’s Paying?
In a traditional sale the buyer and seller will each be responsible for paying some of the above-mentioned fees. Overall, each party will be responsible for about half of the fees listed above but the seller will be responsible for paying all of the commissions on the sale of the property which is by far the largest closing cost paid for the sale of a Chicago area house.
As a seller, you will also need to pay your share of the year’s property tax, up until the day of closing. Any HOA fees or other community costs should be prorated and paid at this time as well.
What Are Seller Subsidies?
Many prospective buyers have a difficult time coming up with enough cash required to complete a real estate purchase. So, sellers will offer subsidies to broaden their buyer pool and help prospective buyers complete the transaction with less out of pocket cash by offering seller subsidies. Seller subsidies are either a flat amount or a percentage of the sale price paid by the seller to cover the closings costs for the buyer.
Can You Avoid These Costs?
Yes! By working with a direct buyer who will pick up all costs associated with the closing! A direct buyer will not charge you a commission, as they are not an agent. Many times, direct buyers will offer to pick up all costs, which will save you money and hassle at the closing table.
Are Repairs Included?
This is another one that is negotiated between the buyer and the seller. If the home is in need of some obvious repairs, the seller will often take care of these before putting their home on the market. However, if an inspection shows additional repairs are needed, a buyer may make his offer contingent on repairs being made. A buyer and seller can work this out before going to closing.