You’ve decided to sell your home.

Maybe you want to take advantage of the rapidly appreciating home values, maybe you’re starting or expanding your family and your current home just doesn’t have enough room, or maybe you’ve decided to relocate from the city to the suburbs. Whatever your reason, you’re probably wondering about the costs involved and just how much you can expect to make on the sale of your home.

While it’s clear that the price you sell your home for is not the amount of money you can expect to receive at closing, many sellers do not understand all of the costs and fees involved in the transaction. Here are 8 of the most common costs you can expect to encounter during your real estate sale transaction. For a complimentary estimate of the costs for your specific property, please call (312-890-9581) or email me at m.stokes@MeghanStokesLaw.com.

1. Realtor Commission

In a real estate transaction, the realtors on both sides are paid by the Seller (which means when you buy your new home, you won’t pay realtor fees).  Typically the cost ranges from 5%-6% of the contract purchase price.  Your realtor may recommend you perform some small upgrades or repairs on your home in order to make it more attractive to potential buyers.  That is an additional cost that could vary widely.

2. Attorney Fees

An attorney is vital to your real estate transaction.  She will review your contract and negotiate modifications to the contract with the buyer’s attorney.  She will also review all of the title search documents and make sure that you are fulfilling your legal obligation of passing on ‘clean title’ to the buyer.  She will also be responsible for drafting all of the legal transfer documents at closing.

3. Negotiated Credits/Repairs from Home Inspection.

More likely than not, your buyer will conduct a home inspection at the start of the transaction.  The cost of the home inspection is paid by the buyer; however, it is common for the buyer to request a seller perform some repairs at the seller’s cost, or to provide a closing cost credit to the buyer at closing, in lieu of any repairs.  The buyer would then be responsible for conducting any repairs on their own after closing.  Sometimes, a home warranty is requested.  The typical cost for a home warranty is between $400 and $700 depending on whether the home is a single-family home or a condo, and which plan is selected.

4. Mortgage Payoff

If you still have a mortgage on the property, this will have to be paid off at closing.  The title company takes care of sending the payoff amount to your lender after closing.

5. Title Fees

Title insurance is a requirement of every contract.  Both buyer and seller pay specific title fees to the title company at the time of closing.  These title fees will vary slightly depending on what title company is used and the purchase price of the home. 

Title fees range from $2,000 to $4,000 if your home sells or $1,000,000 or less.  If your home sells for more than $1,000,000, the title fees will be $4,000 or more.

6. Property Tax Credit

We pay property taxes in arrears.  This means that in 2022, we are paying 2021’s property taxes.  At closing, the seller provides their buyer with a credit to cover the property taxes that cover the period of time the seller owned the home, but for which there is no tax bill yet.  This fee depends on the property taxes from the last full year’s tax bill.  For more on what property tax prorations are and a real-life example, click here.

7. Transfer Taxes

You will always pay a State and County transfer tax when you sell your home.  This is based on the home’s purchase price.  For the State, you pay $0.50 for every $500 of the purchase price.  Counties charge $0.25 for every $500 of the purchase price.  For instance, if you sell your home for $500,000, you will pay $500 in transfer taxes to the State and $250 in transfer taxes to the County.  Your municipality may charge a transfer tax, as well.  For instance, in Chicago, the Seller pays $1.50 for every $500 of the purchase price.  For a $500,000 home, the Chicago transfer tax would be $1,500.

8. Condo Association Fees

If your home is part of an Association, usually the Association will charge a move-out fee (usually a few hundred dollars).  As a seller, you are legally required to provide certain disclosures to your buyer, and condo associations will charge a document production fee to produce those documents.  This fee is usually $200-$400.  Some Associations do not charge a fee. 

Contact Us for a Complimentary Proceeds Estimate!

Sometimes there are additional fees, but the above are all standard fees you should expect to pay in your transaction.  All of the above costs will be subtracted from the purchase price at closing.  Any remaining money will be given to you either in a check or via wire transfer (additional costs from the title company and possibly your bank will be charged).  If you are thinking of selling your home, contact my office (m.stokes@MeghanStokesLaw.com or 312-890-9581) for a complimentary estimate of the proceeds from your sale and see how much you will walk away with.