In the first three installments of my series on closing costs, I addressed real estate tax credits, title charges and lender costs. This fourth, and final, last installment will address the last category of closing costs – everything else. As you review your closing costs with your attorney at the closing table, it may feel like everyone is taking their pound of flesh from the transaction. That is because it is essentially true.
Transfer Taxes
Whenever you buy or sell real estate, the government sticks its hand in your pocket. The amount of the tax depends largely upon the location of the parcel. The State of Illinois always gets $1 per $1,000 of the purchase price and the county gets half of that. Municipalities have the authority to set their own individual taxes. Some have none at all (eg. Palatine), and some are fairly hefty (eg. Chicago – $7.50 per $1,000 of the purchase price for the buyer and $3.00 per $1,000 of the purchase price for the seller!). Unfortunately, in most instances these taxes are unavoidable.
Real Estate Broker Commissions
The brokers are paid from the Seller proceeds. The amount they are paid is determined by the terms the listing agreement. The brokers’ commission is usually 5% or 6% of the purchase price. Regardless of the total commission, the listing broker gets a broker co-op commission of 2.5% of the purchase price paid by the listing broker from the total commission.
Recording Fees
The title company will record the deed and mortgage at the county recorder’s office to let the whole world know that you now own the property (and a mortgage on said property). Of course, the buyer is expected to pay the recorder’s for this. The cost is usually between $120 and $130 total.
Survey
If the property is a single-family, detached residence, the seller is required to provide the buyer and title company with a survey. The cost of a survey is roughly $450. If the property is a condominium, no survey is necessary.
Attorney Fee
Obviously, this is the most important cost of all! It is crucial to have a good attorney (like me) to protect you when hundreds of thousands of dollars are at stake. Attorneys, such as myself, who handle residential real estate transactions charge a flat fee paid at closing. At the time of publication, LoftusLaw charges $500. What a bargain!
Thus concludes my series on closing costs. Your experience may vary, as each transaction is unique. If you have questions about closing costs, or any other real estate matter, as always, you can contact me at patrick@loftus-law.com or 773-632-8330. To see what my clients have to say about me, please visit me at avvo.com or on my Google + page.
