If I want to sell my house in Peoria IL, how much will it cost?
Importance of knowing what your closing costs will be
Many people ask us the question, "how much will it cost to sell a house in Peoria IL?" There are many costs involved in selling a house, and knowing these costs upfront will make the experience much more enjoyable because you know what to expect. Knowing your closing costs will help you determine how much profit you can expect from the sale of your home, so you know how much you can spend on another house, should you be looking to buy another home. Knowing your closing costs will also allow you to be able to make a quick decision when you get an offer on your home. Without knowing your closing costs, how can you determine what an acceptable sales price will be?
Explanation of Selling Costs
The only variable that we don’t know yet is how much the home will sell for. To give you a better idea, you could look at our solds map, which will show you what other homes in your area have sold for over the past two years. If you would like an accurate evaluation of your home, contact us. No obligation, of course.
Real Estate commissions
Real estate commissions are the largest selling cost. In the Peoria, IL area, the most common commission rate is 7% but there is no such thing as a set commission rate. This is illegal. Commissions are split between the agent that represents the seller and the agent that represents the buyer then divided between their respective companies.
Because of this large fee, some sellers elect to try to sell their home “for sale by owner” and that is definitely an option. If you are considering selling your home by owner, make sure you watch our sell your home for sale by owner or hire a Realtor video. It explains the pros and cons of going this route.
Real Estate taxes
In Illinois, real estate taxes are paid in arrears, which means that last year’s taxes are not due until this year. Last year’s tax bill is mailed out around May 1st of this year and the first installment (first 6 months) of last year’s taxes are not due until June 1st of this year and the second installment (last 6 months) is due on September 1st of this year. When selling a home, all taxes are pro-rated up to the closing date. For example, if you close on March 20th of this year, you will owe taxes for all of last year and a pro-rated amount from Jan 1 – Mar 20 of this year. If closing is after June 1st and the first installment of last year’s taxes have been paid, you will only owe the 2nd half of last year’s taxes and the pro-rated amount for this year. If closing is after Sept 1 and all of last year’s taxes are paid, you will only owe the pro-rated amount of this year’s taxes.
Your mortgage(s) must be paid off at closing. Any home equity loans, lines of credit or any other loans tied to the property must also be paid off at closing.
The amount owed on your mortgage will be slightly more than your current balance. Your financial institution can give you an actual payoff amount based on a closing date, but for this calculation, we would just recommend that you use your balance because the amounts will be very similar.
Sellers are required to pay for title insurance. Title insurance is a guarantee to the buyer that a home has clear title when they buy. The title insurance guarantees that all loans are paid off and all liens, judgments, and title defects have been taken care of.
State and County Transfer Taxes
Transfer taxes are fees charged by local and state government when you transfer real estate ownership from one owner to another.
The fee for state/county transfer tax stamps is $1.50 per every $1000 that you sell your home for. Example: if you sell your home for $200,000, the state/county transfer taxes will be $300.00.
City Transfer Taxes (if applicable)
If you live in the City of Peoria, you will be required to pay an additional transfer tax. The City of Peoria transfer taxes are $2.50 per every $1000 that your home sells for. Example: if you sell your home for $200,000, your City of Peoria transfer taxes will be $500.00
Capital Gains Tax
If you have lived in your home for at least two of the last five years, your profits will be tax-free up to $250,000 if you’re single or married filing separately, or up to $500,000 if you're married, filing jointly. We are not tax experts, so please consult with your tax advisor should you have questions about taxes.
The “Additional Fees” are an accumulation of many smaller fees that add up to somewhere between $200 – $350 depending on a few variables. These are standard closing costs and are not any additional fees our office charges.
Everyone deserves to have a clear idea of "how much will it cost to sell a house in Peoria, IL?". Hopefully, the information above helps clarify the closing cost of a house in Peoria, IL and gives you the information you need to sell your home with confidence.
If you have questions or are looking to sell your home, we would love to hear from you. Contact us or call us at (309) 693-9244.