Importance of knowing what your closing costs will be
Many people ask us the question, "how much will it cost to sell my house?" 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 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?
Home Seller Closing Costs Calculator
Find out what your closing costs will be using our Home Seller Costs Calculator. We built this calculator and it is specific to selling costs in the Peoria IL area. This will allow you to find out what your net will be should you decide to sell. You will need to know the 1) selling price 2) amount owed on mortgage (if applicable) 3) closing date 4) Realtor’s commission and 5) annual property taxes. Once these numbers are entered, the calculator will automatically figure the rest of the closing costs. This is an estimate and many of these numbers are pro-rated from the closing date.
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 your married, filing jointly. We are not tax experts so please consult with your tax advisor should you have questions about taxes.
Everyone deserves to have a clear idea of "what will it cost to sell my house?". Hopefully, the information above helps clarify closing costs 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) 693-1133.
Whether you are looking to buy or sell a house in the Peoria, IL area, it’s important to know how the real estate market is trending. Below, we have created a page full of charts that compares real estate markets for many of the local areas and is broken down by high school district.
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