How Much Are Closing Costs in Illinois 2024?

Buying a home is one of the biggest decisions one can make, and there’s a lot more to consider than just the price of the home. Another substantial expense to consider when you’re buying a home is the amount you’ll pay for closing costs.

Closing costs are the final expenses that need to be paid in order to close on a real estate transaction, such as taxes, lender fees, and title insurance. To help prepare you for the final steps of the homebuying process, this Redfin article will break down how much closing costs are in Illinois, who pays for them, and what costs you can expect to pay as a buyer and as a seller.

How much are closing costs on average in Illinois?

In addition to the down payment, homebuyers will also need to pay closing costs before securing the keys to their new home. As a general rule of thumb, you can expect closing costs in Illinois to add up between 2%-5% of the purchase price. But it’s important to remember that this is just a range and the total amount will depend on a number of factors, such as the buyer’s loan program or negotiations made with the seller.

For example, if you’re buying a home in Naperville, which has a median sale price of $620,000, closing costs could range anywhere from $12,300 to $30,750. Or, let’s say that you’re buying a home in Chicago, which has a median sale price of $365,000. Closing costs for a home here could range from $7,300 and $18,250.

Who pays closing costs in Illinois

In most areas, including Illinois, both the buyer and the seller will pay closing costs. But, each party’s closing costs amount will vary depending on what they are required to pay. Keep in mind that it’s common for the buyer to pay closing costs out of pocket, while the seller’s closing costs are deducted from the home sale proceeds.

Buyer closing costs in Illinois

For homebuyers in Illinois , you can expect closing costs to range 2%-5% of the home’s purchase price. If you’ve paid earnest money, which is typically 1%-3% of the home’s price, this amount will be subtracted from your closing costs. Let’s break down some of the common closing costs covered by the buyer:

Appraisal fee: Home appraisals, which typically range from $300 to $500, are usually paid for separately at the time of the service. However, if not, you’ll need to pay for this at closing.
Inspection fee Home inspections in Illinois generally range from $300 to $500 – they can vary based on local rates and the property’s specific characteristics. If you don’t pay for the inspection at the time of service, this will need to be paid at closing.
Loan origination fee: Your lender may charge a fee for creating your loan. It’s important to inquire about what this cost covers and whether it’s negotiable to potentially avoid high costs.
Loan processing fee: Lenders may also charge a loan processing fee, covering underwriting and related services. Similar to the origination fee, check with your lender to understand its purpose and possible waivers.
Loan discount points: If you buy discount points to lower your interest rate, you’ll pay a one-time fee at closing. These points can lower your rate by 0.25% to 0.5%, but consider your long-term homeownership plans before paying for a reduced rate.
Private mortgage insurance (PMI): Required for down payments under 20%, PMI might involve an upfront fee at closing, depending on the loan type. It’s usually part of your monthly payment, but some loans offer the option to pay it as a one-time fee.
Title insurance: Title insurance is a one-time fee paid as part of closing costs. Buyers typically cover both lender and owner title insurance policies.
Homeowners insurance: In Illinois , your annual homeowner’s insurance premium may be part of your closing costs.
Homeowners Association dues: For homes in HOA-managed communities, you might have to pay one month’s dues at closing, which can vary depending on the property and covers maintenance and operational expenses.
Property taxes: Buyers may have to prepay property taxes as part of their closing costs in Illinois .

Seller closing costs in Illinois

How much closing costs are in Illinois for sellers will vary between each transaction, but here are some of the common fees and costs covered by sellers:

Real estate agent commission fees: These fees can be a significant cost for sellers. Commission fees may vary and are subject to negotiation. Sellers should discuss their options with their agent.
Homeowners Association fees: Sellers are generally responsible for settling any outstanding HOA fees or assessments up to the closing date, and they may need to provide HOA documents to the buyer as part of the sale.
Property taxes: Sellers are responsible for any property taxes that have accrued but not yet been paid up to the closing date. These unpaid property taxes are typically prorated for the months that you owned the property.
Title insurance: Owner’s title insurance is another common closing cost in Illinois paid for by the seller.
Transfer taxes: If you’re selling a home in Illinois, you’ll likely pay a state levied real estate transfer tax. These taxes are typically calculated based on the sale price or assessed value of the property. The specific rates and regulations can vary widely, so it’s important to be aware of the requirements in your area and factor in these potential costs when selling a home.

Median home sale price data from the Redfin Data Center during July 2024.

The post How Much Are Closing Costs in Illinois 2024? appeared first on Redfin | Real Estate Tips for Home Buying, Selling & More.