12 min read Feb 02, 2024

Seller or Buyer: Who Pays Closing Costs in Illinois in 2024

Closing is the final stage of a real estate transaction. The sheer amount of paperwork involved in the process can make you feel flustered and overwhelmed, especially if you are buying or selling a house for the first time.

A rookie mistake that most first-time home buyers and home sellers make is not taking closing costs into consideration. To be specific, who pays closing costs in Illinois, and how much are they?

Why are Closing Costs Important?

Paying closing costs is important to finalize the real estate transaction. For instance, Illinois mortgage lenders typically require a home appraisal report and home inspection reports to determine the net worth of the property, and the loan amount and calculate the risk involved. Without these, they may not approve the loan.

Closing costs are also important to transfer the ownership of the house from the seller to the buyer. To understand this better, let’s consider the recording fee. It is charged by state and/or local government agencies to register the real estate sale, making it a matter of public record. Not recording the sale can be a gateway to legal liabilities in the future.

That being said, it is crucial to develop an understanding of closing costs before you begin a real estate transaction. If you are selling a home in Illinois, it will help you find the right price for your property without narrowing your profit margins.

If you are buying a house, being well-versed in closing costs can help you establish your affordability.

Who Pays Closing Costs in Illinois: Buyer or Seller?

Both the buyer and the seller have to pay certain closing expenses in Illinois.

Seller closing costs in Illinois can amount to 8%-10% of the final sale price of the home. This does not include the mortgage payoff. The biggest closing cost (5%-6%) the seller has to pay is the listing and buyer’s agent commission. The remaining 3%-4% includes expenses like home inspection fees, the land survey fee, HOA fees, estoppel fees, etc.

» How to Calculate Closing Costs for Seller in Illinois: Find out what are typical closing costs for seller in Illinois.

Usually, the buyers are responsible for paying most of the settlement costs in Illinois. Buyers closing costs in Illinois can amount to 2%-5% of the final sale price of the home or the mortgage amount.

Buyers can negotiate certain closing costs with the seller and the lender. Some sellers may offer to pay certain buyer closing costs to sweeten the deal or sell their home faster.

» Estimated Closing Costs for Buyer in Illinois: Here are the typical closing costs for buyer in the US.

Who Usually Pays Closing Costs in Illinois?

As mentioned above, the buyers are responsible for most of the settlement costs. However, the closing costs to be borne by the buyer and the seller vary by transaction type. Let’s take a look at the buyer and seller closing costs by transaction type.

Who Pays Closing Costs for Cash Buyer in Illinois?

Cash house buyers in Illinois do not have to take a mortgage to finance their real estate purchases. As a result, cash deals benefit both the buyer and the seller as they are quicker, less risky and complicated, and have lower closing costs.

Both the seller and the buyer have to bear certain closing expenses in a cash sale.

Some seller closing costs on a cash sale in Illinois are attorney fees, closing/settlement fees, escrow fees, HOA fees, pro-rated property taxes, title insurance, and transfer tax.

Since the buyer does not opt for a mortgage in case of a cash sale, they do not have to pay lender-related closing costs like application fees, appraisal fees, credit report fees, discount points, lender’s title insurance, and underwriting fee. Buyer closing costs on a cash sale in Illinois include attorney fees, courier fees, escrow fees, homeowners insurance, HOA fees, title search fees, transfer tax, and property tax.

» Cash Offers Illinois: Here is a guide on how to deal with cash offers in Illinois.

Who Pays Closing Costs in Illinois on a Wholesale Deal?

Three parties are involved in a real estate wholesale deal, the seller, the wholesaler, and the buyer. The wholesaler acquires the property from the seller on contract and sells it on their behalf. Wholesalers often look for distressed properties priced below market value. Such deals are usually low risk and present the opportunity to make a larger profit in a shorter time span.

The seller and the buyer pay closing costs in case of a wholesale real estate deal in Illinois. The wholesaler is not responsible for closing costs. However, they may have to pay taxes on the assignment fee (monetary compensation wholesalers receive for organizing the deal, usually a percentage of the final purchase price).

Some seller closing costs on a wholesale deal in Illinois are attorney fees, escrow fees, HOA fees, transfer tax, and pro-rated property tax.

Buyer closing costs on a wholesale deal in Illinois include appraisal fees, assignment fees, escrow fees, owner’s title insurance, recording fee, the survey fee, title search fee, etc.

» Illinois Wholesale Real Estate: Find out more about the wholesale real estate market in Illinois.

Who Pays Closing Costs on a Vacant Land in Illinois?

Land is a tangible asset, and its value only increases with time as it has a limited supply. In addition, this niche of real estate is less competitive as compared to wholesale deals and house flipping in Illinois.

Both the buyer and the seller have to pay some closing costs on the sale of land in Illinois.

Seller closing costs on land sale in Illinois include attorney fees, deed preparation fees, HOA fees, pro-rated property tax, real estate agent commission, recording fees, transfer taxes, etc.

Some buyer closing costs on land sale in Illinois are appraisal fees, attorney fees, environmental inspection, land survey fees, loan application fees, origination fees, soil percolation test fees, title insurance, and title search fee.

» Why Do You Need Title Insurance in Illinois: Protect your real estate investment by opting for title insurance.

Who Pays Closing Costs on a New Construction Home in Illinois?

Purchasing a new construction home means buying a house directly from the builder or developer. Here, the buyer is the first person to live in the house since its construction.

Usually, the buyer has to bear all closing costs in Illinois on new construction. Nonetheless, the builder may offer certain incentives towards closing costs to make the property more attractive, especially if the buyer chooses to work with their in-house lender.

Buyer closing costs in Illinois on a new construction include attorney fees, deposit registration fees, development fees, harmonized sales tax, loan origination fees, meter installation fees, notary fees, pro-rated property taxes, real estate broker commission, settlement fees, transfer taxes, and Tarion enrolment fee for new homes.

» How to Buy a House in Illinois: Here is a step-by-step guide on buying a house in Illinois.

How to Lower Closing Costs in Illinois?

Illinois has some of the highest closing costs in the United States. Let’s put this in perspective. The median home price in Illinois is $255,300. So, the closing costs for seller in Illinois typically range from $20,424 to $25,530. And, closing costs for buyer in Illinois can amount to $5,106-$12,765.

» How Much are Closing Costs in Illinois: Here’s everything you need to know about the closing costs in Illinois for buyers and sellers.

How to Lower Closing Costs for Seller in Illinois?

If you are putting your house on the real estate market in Illinois, here are some ways to reduce the cost of selling a house in Illinois.

1. Opt for a discount broker or a flat fee realtor

Compared to traditional brokers who charge 6% of the sales price as commission, discount real estate brokers in Illinois only charge 3%-4% of the sales price for their services. In fact, some low commission realtors offer higher concessions if sellers choose them as their buyer’s agents for their next real estate purchase.

2. Choose “For Sale By Owner” (FSBO)

Sellers can save up to 3% realtor commission and cut several costs by opting for “Illinois For Sale By Owner” services. Houzeo offers services like Illinois Flat Fee MLS Listing for FSBO sellers. With Flat Fee MLS, sellers can list their property on the MLS, which makes the selling process easier and smoother. What’s more, if the buyer is unrepresented, with Houzeo, sellers can sell their homes for zero realtor commission charge!

» For Sale By Owner Sites: Check out the best For Sale By Owner websites in 2023!

3. Research and compare

Sellers can save on closing costs such as attorney fees, home inspection cost Illinois, and escrow fees by researching and comparing more affordable services to find the one most suitable for them.

4. Ask the buyer to cover seller closing costs

Buyers may agree to cover the seller’s closing costs if the market is competitive and fewer houses are in the market. On the other hand, sellers can raise the listing price to cover full or partial closing costs.

How to Lower Closing Costs for Buyer in Illinois?

If you are putting your house on the market, here are some ways you can reduce closing costs for buyer.

1. Opt for a rebate program

Some real estate brokers offer buyers incentives like rebates that help lower their closing costs and/or buy down the mortgage interest. Real estate agent services are free for buyers as sellers pay the agent commission for both parties.

2. Give a solid offer

Present an attractive deal to entice the other party to cover some of the closing costs. Although it doesn’t mean more proceeds, an irresistible offer can reduce expenses. The better the offer, the more they’ll want to accommodate the deal. Hence, there’s a great chance the seller will pay the added cost to keep the transaction easier and quicker.

3. Minimize requests

Making demands can make the deal slow and troublesome for both parties. Therefore, buyers should make minimal requests so the seller will be more willing to cover some of the closing costs. If there are too many inconveniences, the seller may question the genuineness of the buyer and feel the need to back out.

4. Compare lender mortgage rates

You can compare lenders to choose the one offering the best mortgage rates and benefits. If you have a preferred bank, you can also negotiate the mortgage rate with them. Further, if you have received an offer with a lower rate from a different lender, you can share it with the preferred bank and ask if they can match or beat it.

» Mortgage Broker in Illinois: A mortgage broker can help you find the best loan deal.

Closing Cost Calculator Illinois

Closing costs vary heavily according to location and mortgage rates. Houzeo’s Closing Costs Calculator is a free tool that factors in these elements to help you calculate closing costs in Illinois. It shows the user a detailed list of itemized costs and highlights junk costs that can be avoided.

Houzeo’s Home Sale Calculator Illinois helps calculate closing costs for sellers with a swish and a click! All the sellers have to do is enter their property location, home sale price, mortgage payoff, seller agent commission, and buyer agent commission, and voila!

» Closing Costs Calculator for Seller Illinois: Check out the seller closing costs calculator for calculating the closing costs for seller.

Houzeo’s Buyer Closing Cost Calculator helps calculate closing costs for buyers in Illinois. To find the estimated buyer closing costs, the buyers have to add the property location, home purchase price, and the down payment in the buyer closing cost estimator.

» Estimated Closing Costs for Buyer in IllinoisCheck out the closing costs calculator for buyer for calculating the closing costs for buyer.


If you have not begun your real estate journey yet, opt for Houzeo. Houzeo.com, a tech company, provides an unbeatable combination of maximum savings, cutting-edge technology, and 5-star customer support.

With its 100% virtual service, it helps home sellers list their properties without any hassle from the comfort of their homes while also allowing home buyers to explore properties and make offers online.

Houzeo’s customer-centric approach, advanced technology, and MLS flat fee Illinois packages make it an ideal choice for those looking to avoid paying high commissions and closing costs.

» Houzeo Reviews: Check out Houzeo.com’s reviews before listing your house!

Frequently Asked Questions

1. Who pays transfer taxes in Illinois?

Transfer taxes in Illinois are typically paid by the seller. In Illinois, transfer taxes are called documentary stamp taxes.

2. Are Illinois property taxes paid in arrears?

Yes. Property taxes in Illinois are paid in arrears (at the end of the year).

3. Is a survey required for closing in Illinois?

No. The law in Illinois does not mandate a land survey when buying or selling a house. However, it may be required by mortgage lenders and title companies.

4. Who pays owner's title insurance in Illinois?

The seller usually pays for the owner's title insurance in Illinois.

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