Answers to Frequently Asked Questions - Buyers:
In negotiating the purchase contract, how much earnest money should I put down?
The typical range for an earnest money deposit is between one percent and four percent of the purchase price. As a buyer, you will want to negotiate an amount toward the lower end of the range.
In addition to the purchase price, what other costs should I expect to pay?
- Legal: Please contact me, as I would be happy to provide a quote for you.
- Lender's Costs: Depending on the loan product, these fees and costs can range from $250.00 to several thousands of dollars. The lender will provide you with a breakdown of its costs and fees.
- Title Company Fees: These costs are tied to the purchase price, but generally range from $1,000.00 - $4,000.00.
- Municipal Transfer Tax (depends on the municipality): Municipal transfer taxes are usually based on a portion of the purchase price. For example, buyers in:
pay either a portion or all of the transfer tax. In some municipalities, such as Evanston, Highland Park and Skokie, the seller pays, and in other municipalities, like Winnetka, Kenilworth and Glencoe, there are no municipal transfer taxes. For example, if a buyer purchased a home in Wilmette for $700,000.00, the buyer would owe $2,100.00 in municipal transfer taxes.
- County Transfer Tax: In Lake County, even though either party may pay the tax, it is typical for the seller to pay the transfer tax. However, it is possible that a buyer could pay, and the tax is .25/$500.00 of the purchase price. The buyer does not pay the transfer tax in Cook County.
Note that these fees can vary greatly, and the above costs are just estimates and not inclusive of all fees and costs.
Why do I need a financing contingency in my contract if I have been pre-approved for a loan?
A loan pre-approval letter from a lender is generally just an indication of your creditworthiness, and does not mean that the lender is giving you a commitment for a loan to buy a particular home, so it is important to keep the financing contingency in the contract.