Answers to Frequently Asked Questions - Sellers:
In negotiating the purchase contract, how much earnest money should I request?
The typical range for an earnest money deposit is between one percent and five percent of the purchase price. As a seller, you will want to negotiate an amount toward the higher end of the range.
In addition to the purchase price, what other costs should I expect to pay?
- Legal: Please contact me for a quote.
- Survey: You will need to provide the buyer with an updated survey, which typically costs between $400.00 - $1,000.00.
- Title Insurance and Fees: You will need to provide the buyer with an owner's title insurance policy, as well as pay other fees and costs to title company. The fees typically start at $1,500.00 and go up depending on the purchase price.
- Municipal Transfer Tax (depends on the municipality): Municipal transfer taxes are based on a portion of the purchase price. For example, sellers in:
pay either a portion or all of the transfer tax. In some municipalities, such as Wilmette and Lake Forest, the buyer pays, and in other municipalities, like Winnetka, Kenilworth and Glencoe, there are no municipal transfer taxes. As an example, if a seller sold a home in Evanston for $500,000.00, the seller would owe $2,500 in property 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, which is .25/$500.00 of the sale price. In Cook County, the seller pays .25/$500.00. So for the Evanston seller above, the Cook County transfer tax would be $250.00.
- State of Illinois Transfer Tax: In Illinois, the seller pays the real estate transfer tax of .50/$500.00. The Evanston seller from the example above would owe $500.00 in Illinois property transfer taxes.
- Pro Rata Share of Real Estate Taxes: As a seller, you will usually need to provide the buyer with a credit for real estate taxes for the amount of time you owned the property (this is because property taxes are paid in arrears). This rate varies, but is typically based on the most recent full year's tax bill, the number of days in the year that the seller will have owned the property, and the proration rate negotiated between the parties.
- Real Estate Broker's Commission: This amount varies and can be negotiated with your broker before you sign a listing agreement, but five percent of the purchase price is a common commission rate.
Note that these fees can vary greatly, and the above costs are just estimates and not inclusive of all fees and costs.