Beyond the Listing Price: Hidden Costs You Should Plan For

Closing costs typically include a variety of lender, title, escrow, recording, and prepaid expenses. The exact amount varies depending on the purchase price, financing terms, and lender requirements.

Potential closing costs may include:

• Loan origination or lender fees

• Appraisal fees

• Title insurance

• Recording and transfer fees

• Prepaid interest

• Escrow funding for taxes and insurance

Your lender will provide a Loan Estimate and, later, a Closing Disclosure outlining estimated costs before closing.

Property taxes vary by municipality and are based on the assessed value of the property. In Illinois, buyers should understand how property taxes are billed, whether taxes have been prorated at closing, and how future reassessments may affect ownership costs.

Reviewing a property's recent tax history and discussing any questions with your real estate professional, attorney, or tax advisor can provide additional context.

For condominiums, townhomes, and some planned communities, homeowners association (HOA) assessments are an important part of monthly ownership costs.

Association fees may contribute toward:

• Building maintenance

• Landscaping

• Snow removal

• Amenities

• Reserve funds

• Insurance for common areas

Assessment amounts and services vary by association, and buyers should review governing documents before closing.

Lenders generally require homeowners insurance before closing. Premiums vary based on the property's location, age, construction, coverage selections, and deductible.

Some buyers may also need additional coverage depending on the property's characteristics or location.

Moving costs are often overlooked when creating a homebuying budget. Expenses may include:

• Professional movers

• Packing supplies

• Storage

• Utility transfers

• Furniture delivery

• Cleaning services

Planning for these expenses ahead of time can help avoid last-minute surprises.

After purchasing a home, unexpected maintenance or repairs may arise. Maintaining an emergency reserve can help homeowners prepare for routine maintenance, appliance replacements, or unforeseen repairs.

Seller closing costs vary depending on the transaction but may include:

• Title-related expenses

• Recording fees

• Attorney fees

• Prorated property taxes

• Mortgage payoff fees (if applicable)

Your closing statement will outline the specific costs associated with your transaction.

Depending on the municipality and transaction, sellers may be responsible for transfer taxes or other local government fees. These costs vary by location and should be reviewed during the transaction process.

Illinois is an attorney-review state, and many residential transactions involve legal representation during contract review and closing. Fees vary depending on the complexity of the transaction and services provided.

Following inspections or contract negotiations, buyers and sellers may agree to repairs, credits, or other concessions. These terms are negotiated on a transaction-by-transaction basis and depend on the property's condition and the terms of the purchase agreement.

Just like buyers, sellers should budget for expenses related to moving, storage, utility transfers, cleaning, and any overlap between residences.

Understanding estimated net proceeds before listing a home can help sellers prepare for their next purchase or financial goals.

Factors that may influence net proceeds include:

• Remaining mortgage balance

• Closing costs

• Transfer taxes

• Attorney fees

• Repairs or negotiated credits

• Moving expenses

Your real estate professional can provide an estimated seller net sheet based on available information, although final figures will depend on the completed transaction.