Selling A Home In Peoria Il– What Cost Should I Expect At The Closing?

Selling A Home In Peoria Il– What Cost Should I Expect At The Closing?


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Selling a home in Peoria Il can be very exciting but may also make you feel a little uncomfortable. Most of us buy and sell just a couple of homes in our lifetimes. Therefore, this is not something we do every day. It is natural to have questions about the home selling process. One of those questions is….. what cost should I expect to incur to when I sell my house? 

The U.S. Department of Urban Development has created a very clear settlement statement outlining the key categories of cost that are incurred when buying and selling properties. It is called a HUD-1 statement. It is the statement that the Escrow Agent will use to itemize all the charges that you can expect to pay.  You can get a copy of the HUD-1 statement at https://portal.hud.gov/hudportal/documents/huddoc?id=1.pdf  .  Key categories on the HUD-1 statement that effect the buyer is discussed below.

There will be a summary of the charges for the buyer and seller right up front in the documents. These summary charges are then explained on the following pages. Prior to the actual closing for the property, this HUD-1 statement will be sent to you. You should review the charges and make sure you understand them. If you don’t, ask your Realtor to explain them. If you still have questions, contact the Escrow Agent that will be handling your closing and that person explain it to you. Don’t be bashful, you have every right to make sure you understand these charges and that they are correct.

Following the summary charges will be a detailed breakdown of the charges. This breakdown is arranged in Key Categories.  These Key Categories include the following for the seller.

 

Total Commission based on price.

This section includes the cost of commission that is paid to the Realtors.  When Selling a home in Peoria Il this cost will be about 7% of the agreed to selling price of the property.   The Escrow Agent will make sure the commission is paid to the Real Estate Brokerages in the amounts as specified in the purchase and sale agreement for the property.  As a seller, your main concern is the total amount, the Realtors for the buyer and seller will be making sure they get paid the correct amount. For a $200,000 dollar house, you can expect to pay $14,000 dollars in commission.

 

Title Charges

In Illinois, the seller typically pays for Title insurance.  Who typically pays for Title Insurance varies from area to area. However, this is a negotiable item. So the seller can pay or the buyer can pay for Title Insurance. It typically cost about $1500 dollars depending on the cost of the house.

You will also be charged an Escrow fee. This is a fee to pay for the services of the Escrow Company in handling the closing of your property. This fee is typically divided between the buyer and the seller. You can expect to pay approximately $350 dollars for you portion of the service.

If there were attorney fees involved, they would show up here as well. You may want to allow about $250 dollars for attorney fees.  There are other miscellaneous charges that are relatively small in cost. Expect to pay about $50 dollars for these fees.

 

Government Recording and Transfer Charges

The Government Recording Fees and Transfer Charges cover the fees to pay for the recording the release of the loan from the sellers lender and to cover the cost of transfer taxes.  In Illinois, you will pay taxes on the transfer of property.  Typically, there is a state & county transfer tax and depending on the city, there is a city transfer tax.

In Illinois, there is a state transfer tax of $0.50 per $500 dollars for the state and an additional $0.25 per $500 for the county.  This is a total of $0.75 per $500 dollars for transfer tax.   If the property being sold for $200,000 dollars, then the transfer tax will be $200,000/500 *0.75 or $300 dollars. More than likely, the city also has a transfer tax. You will need to get the rate for the city and then calculate the transfer tax the same as above.

A key cost that I have included in the above is the proration of property taxes. Property taxes are paid in arrears and the seller needs to provide money to the buyer to pay for the portion of the property taxes that the seller is accountable for but has not paid.  The amount to be paid is dependent on the date of the transfer of the property. I suggest you set down with your attorney or Realtor and have them explain that process to you and give you a rough estimate of those cost.

 

Approximate Cost

To summarize, the cost of selling a home can be significant. The cost to sell a $200,000 dollar home can be approximately $17,000 dollars. This would not include the proration of property taxes.

When selling a home in Peoria Il, I suggest you get a copy of the HUD-1 form and discuss it with your Realtor the expected cost that the seller will incur. This will help make you more knowledgeable on the overall cost of selling your home. It will also help you understand what fees are negotiable between seller and buyer. This will help prepare you for the negotiation process that goes along with buying and selling a home.

I am not an attorney; therefore, you should discuss the cost of selling your home with your Attorney and Realtor to gain an accurate understanding of your situation. The above is intended to give you a rough idea of the items involved and to gives you insights to ask questions about.

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