Who Pays the Closing Costs When Selling a House in Illinois?
When you're selling a property in Illinois, there are several factors to consider. One of the most important is who pays the closing costs. This can be a tricky question, and it depends on a variety of factors. However, there are some standard expenses associated with selling that we will discuss in further detail.
Often I get the question: Who Pays the Closing Costs When Selling a House in Illinois? The buyer and seller are generally both responsible for the closing costs of a property.
Who pays closing costs when selling a house in Illinois?
As a general rule, closing costs are paid according to the terms of the buyer's and seller's purchase agreement. The responsibility for closing costs is usually divided between both parties if the sale goes through. The costs may not be evenly split, and the buyer is likely to pay more than the seller.
The buyer and seller are generally responsible for the closing costs of a property.
Closing costs are the fees associated with the sale of a home, and they can vary depending on the type of home, the location, and the buyer. For a full breakdown of these costs, here’s a list of all the fees associated with selling.
Remember, closing costs and real estate sales contract terms are negotiated between the buyer and seller before the sale is final.
Sellers typically pay for:
- The real estate agent's commission
- Property taxes
- Home Insurance
- HOA dues (if applicable)
- Repairs (if necessary)
Some of these expenses, like the real estate agent's commission and repairs, are paid at closing. Others, such as property taxes and utilities, may be prorated so that the seller only pays for the time they owned the home.
There’s a lot to take into consideration when selling your home – if it’s your first time, you will find it helpful to read our list of steps for selling your home successfully.
Buyers typically pay:
- Loan origination fee
- Home appraisal fee
- Home inspection fee
- Pest inspection fee (if necessary)
- Closing costs
- Down payment
Understanding Seller Concessions
Seller Concessions are paid by the seller to help offset some of the buyer's costs. In Illinois, a seller can pay up to 3.0% of the sales price towards the buyer’s closing costs and/or prepaid items.
The amount that a seller can contribute is negotiable between the buyer and seller, but note that any amount over 3.0% is paid for by the buyer.
Negotiating Seller Concessions
Negotiating seller concessions can be a great way to save money as a buyer. If you're looking to purchase a home, be sure to ask the seller if they're willing to contribute to your closing costs. It never hurts to ask!
Keep in mind that when purchasing a home, the price needs to be favorable in a sellers' market (which Illinois has) to get an accepted seller concession. In a buyer's market, seller concessions are significantly easier to reach an agreement on.
Disadvantages of Seller Concessions
Let's get this out of the way: Sellers aren't paying your closing expenses because they are too kind. In most situations, when a seller covers closing costs for a buyer, the sales price is usually higher.
Typically the buyer asks the seller to cover some of your closing costs, but what the seller is really interested in is their net profit. The seller agrees to pay closing costs but at a higher sales price.
In some situations, the home may not appraise for the sales price. If this happens and the buyer is getting a loan, they may have to bring money to closing to make up the difference.
The key takeaway?
If you're thinking of selling your home in Illinois, it's important to understand the closing process and who pays the closing costs. When you're negotiating with a seller, they will be looking out for their best interests - not yours. Seller concessions can be beneficial for buyers, but it's important to understand that there are potential risks involved. It's always a good idea to consult with a real estate agent or lawyer before entering into any agreements.
So, who pays the closing cost when selling a house in Illinois? It really depends on the situation. Who pays the closing cost when selling a house in Illinois can vary, but typically the buyer and seller are both responsible for some closing costs. The best way to find out is to ask your real estate agent or the person you're selling the house to.
If you have any other questions about selling a house in Illinois, feel free to reach out to us! We would be more than happy to help.
Posted by Rafael Velasco on