Seller closing costs

When I sell my home, what kind of costs are there?

Most real estate attorneys consider Realtor commissions, taxes, title related fees, etc. all to be "closing costs." Other real estate attorneys may only call title-related fees "closing costs."  When I talk to a client, I consider all fees to be closing costs - including Realtor commissions.

For Sellers, the largest closing cost tends to be the Realtor commission. This commission is typically between 4 percent and 7 percent of the sale price.  This can be somewhat negotiable between you and your Realtor and is included on the listing agreement you sign with them.

The next largest cost is real estate property taxes. In the Chicago area, we pay property taxes in arrears — which means that this year, we are paying last year's property taxes. So when you sell your home, you must give a property tax credit to the Buyer for the taxes not yet due while you were still living in the home. Typically the property tax credit is based on 105-110% of the previous year taxes but this is negotiable. 

Sellers must also pay transfer taxes at the closing.  In the Chicago area, Sellers pay one dollar ($1.00) per thousand to the State, 50 cents (.50) per thousand to the County, and often a transfer tax to the City or suburb they live in.  In Chicago for example, the Seller pays three dollars ($3.00) per thousand to the City of Chicago.  So if you are selling in Chicago, you will pay a grand total of $4.50 per thousand in transfer taxes.

There are also title related fees.  In Illinois, the Seller pays for the title insurance.  The title insurance policy basically insures the Buyer that they are getting "clean and marketable" title from the Seller.  Title insurance typically starts around $1750.00 and goes up from there depending on the purchase price.  There are also misc. other title related and state fees charged to the Seller at closing that typically end up being around $500.00.

Finally, there may be some fees related to the association/management company (if applicable) or the cost of a survey (for single family homes).

If you are looking for a more accurate figure, simply call our office and we would be happy to go over the individual costs for your property.

It is important to have an experienced, knowledgeable attorney working on your behalf so that you do not pay any unnecessary fees.  Bradford Miller Law PC has closed thousands of transactions and they are very responsive to their clients.  Bradford Miller Law PC is a member of the Better Business Bureau and they consistently receive excellent reviews on Yelp and other sites.

Feel free to call our office for a free consultation - 855-897-9410

10 Reasons for Sellers to Hire an Attorney

Here Are 10 Reasons Why You Need To Hire An attorney To Work On Your Behalf

1. The attorney will go over the specific terms of the contract and look for any problems that may arise. This is a major transaction and you need an attorney to look over the terms of the contract.

2. The attorney will look at the financial strength of the buyer and the amount of earnest money put down and possibly modify those terms to strengthen the contract.

3. The attorney will negotiate on your behalf any items related to the inspection such as repairs that are needed.

4. The attorney will ensure that clear title is given to the new owner.

5. The attorney will explain, and if necessary, negotiate the tax proration between the parties.

6. The attorney will draft, organize and explain all of the paperwork needed for the transaction.

7. The attorney will look for any hidden or unnecessary charges that sometimes get added to the final figures.

8. The attorney will help keep the deal on track. With so much at stake, you need someone monitoring all of the deadlines. The attorney will also ensure that all parties are complying with the terms of the agreement as the process moves forward.

9. The attorney will attend the closing and explain the paperwork to you. Or, in the alternative, the attorney can make other arrangements so you do not have to attend closing.

10. Peace of mind! The attorney will be working for you only — not the other side. This means that you will have an independent party looking out for you and your interests throughout this process.

Contact Bradford Miller Law PC at 855-897-9410 for a free consultation on your sale.

Seller Timeline

Although every transaction can be different, this is a general timeline from the seller's point of view.

1. Offer. There is an offer for the property. Your realtor receives earnest money from the buyer.

2. Attorney involvement. When you receive an offer (or even before) you should immediately call Bradford Miller Law and fax or email the contract to our office. It is important to get the attorney involved right away because there are deadlines that begin to run.

3. Attorney review, etc. We will then begin his or her work on the transaction that will include reviewing the terms of the contract, ordering and reviewing the title policy, and drafting the paperwork necessary for closing.

4. Inspection deadline. In a typical contract, the buyer has the right to have the property professionally inspected. If any problems are found, the buyer may ask for them to be repaired or they may ask for a monetary credit. Or they could choose to cancel the contract and have the earnest money returned to them.

5. Additional Earnest Money. At some point, usually after the attorneys have come to an agreement on all terms, the buyer will give an additional amount of earnest money. This money typically goes to your realtor's office who then puts it into an escrow account.

6. Mortgage commitment deadline. This is often the deadline that matters the most to all of the parties. For a buyer that needs to take out a mortgage, this is the deadline where the lender either "commits" to lending money for the property or decides they cannot lend money for this property. Often, this deadline needs to be extended because the lenders have become more cautious then before and therefore need more time.

7. Final walk-through. The final walk-through takes place, usually the day before the closing.

8. Closing. The actual closing takes place which is where everyone signs the paperwork and keys are exchanged.

Overall, the above timeline typically takes around 45-60 days to complete but every transaction is different and sometimes deadlines need to be extended for one reason or another.

Frequently Asked Questions by Sellers

Frequently Asked Questions

If you would like a free legal consultation, call Attorney Bradford Miller 

at 855-897-9410

Do I need an attorney?

Yes, it is highly recommended that you hire an attorney. With so much at stake, the relatively small fee charged to have an attorney working on your behalf is well worth it. And with Bradford Miller Law there is no fee unless the transaction closes. In other words, if the deal falls through, you will not have to pay any legal fees. When selling a home, sellers will be confronted with complex issues and a lot of paperwork that should only be dealt with by an attorney who is experienced in this area.

How do I hire you for my closing?
Call my office at 855-897-9410 and fax or email the contract. My fax number is 312-379-3163. My email address is bmiller@bradfordmillerlaw.com.

What kind of closing costs can I expect to have as a seller?
Read about closing costs under the post Seller Closing Costs

When should I get an attorney involved?
I recommend you contact our office right away — even before you receive an offer. This way we can begin representing you immediately, which will allow us to review any contract BEFORE you sign it. Other people, however, wait until they accept a buyer's offer. Please note though that you need to contact us immediately after accepting a buyer's offer because there are important deadlines that begin to run after you accept the buyer's offer.

What is a typical timeline for this type of transaction?
Read about the typical timeline under the post Seller timeline

What if the buyer walks away before the closing?
If all of the contingency deadlines have passed (attorney approval, inspection, mortgage commitment date, etc.), you may be able to retain the buyer's earnest money as a penalty. However, it depends on the individual facts at the time the buyer walks away.

How long does it take from the time I accept a buyer's offer to the actual closing?
Typically between 45 and 60 days, however, it may be longer or shorter depending on the individual circumstances.

If the buyer asks for certain repairs to be made during the inspection period, do I have to repair the items?
No, you do not. Keep in mind however, that the buyer could then possibly walk away without penalty if we fail to reach an agreement with them. Typically, we work those issues out and come to an agreement that is fair to both sides.

Please explain how property taxes work in the Chicago area:
In the Chicago area we pay our property taxes in arrears, which means that this year, we are paying last years taxes. Therefore, when you sell your home, you will have to give a credit to the buyer for the taxes not yet due while you lived in the home. Generally speaking, taxes are prorated around 105-110 percent absent special circumstances. That means that we are assuming that the taxes will go up 5-10 percent next year.

What is the "final walk-through?"
The final walk-through usually takes place the day before closing. Generally speaking, the buyer, along with their real estate agent will be looking through the home to make sure there are no problems. For example, they will be (1) making sure any agreed repairs have been made, (2) confirming that the appliances, furnace, hot water heater, etc. are still working, (3) confirming that any personal property of the seller(s) has been removed and (4) checking for any new damage due to the seller(s) moving out or other reasons. As the seller, you should make sure that the home has no new damage and is in broom-clean condition for the final walk-through.

Do you handle short sales?
Yes, Bradford Miller Law, P.C., handles short sales for both buyers and sellers. For more information, contact my office at 855-897-9410.