In an Illinois home sale, both sides pay closing costs, but the bills look very different. Who pays closing costs in Illinois comes down largely to local custom rather than statute: sellers typically spend 7% to 9% of the sale price once the real estate commission is included, while buyers should plan on roughly 2% to 5% of the purchase price for loan charges, insurance, recording, and prepaid items. Nearly every line is negotiable, and a few — municipal transfer taxes and the buyer’s agent commission chief among them — now vary more than they used to.
What the Seller Customarily Pays
The real estate commission is the biggest number on the seller’s side by a wide margin. Illinois commissions average about 5% of the sale price, split between the listing agent and the buyer’s agent. On a $285,000 home, close to the state’s recent median, that’s roughly $14,400. Since August 2024 the seller is no longer automatically responsible for the buyer’s agent share, which is a meaningful change discussed below.
Illinois custom puts the owner’s title insurance policy on the seller. This policy protects the buyer against problems in the property’s ownership history — undisclosed liens, forged deeds, boundary disputes, defects a title search might miss. The premium scales with the home’s value and often runs a few thousand dollars on a typical residential sale.
Sellers hire a real estate attorney. Illinois doesn’t technically require attorney representation at closing, but virtually every residential deal here uses lawyers on both sides, which surprises people moving from states where title companies handle everything. Fees generally run $500 to $1,000. The seller’s attorney prepares the warranty deed, orders the title commitment, and gets payoff statements from existing lenders so the title is clean at transfer.
State and county transfer tax stamps come out of the seller’s proceeds in most Illinois transactions. At the combined rate of $0.75 per $500 of sale price, a $300,000 home generates $450 in state and county transfer taxes. Municipal transfer taxes are a separate question, and responsibility for them shifts by local ordinance.
If the home is in a homeowners association, the seller usually pays for the resale disclosure packet. HOA management companies charge $150 to $500 to assemble it. The seller also provides a property tax credit to the buyer at closing, which works differently than most people expect and has its own section below.
What the Buyer Customarily Pays
Loan-related fees make up most of the buyer’s closing costs. Origination fees — what the lender charges to process and underwrite the mortgage — run 0.5% to 1% of the loan amount. On a $250,000 mortgage, that’s $1,250 to $2,500. The buyer also pays for an appraisal, usually $400 to $700, and a credit report fee under $100.
The buyer pays for the lender’s title insurance policy, which the mortgage company requires as a condition of the loan. It protects the lender’s financial interest in the property and is separate from the owner’s policy the seller provides. The premium is typically lower than the owner’s policy because it covers only the outstanding loan balance, not the full purchase price.
Recording fees go to the county recorder for filing the new deed and mortgage. Illinois counties charge a flat fee per document rather than per page, and those fees have risen in recent years. Expect roughly $80 to $100 per document depending on the county, so recording a deed and a mortgage together usually costs $160 to $200 or more.
The buyer’s attorney fees mirror the seller’s range of $500 to $1,000. The buyer’s attorney reviews the purchase contract, examines the title commitment for defects, and walks the buyer through the mortgage documents. This review matters. The attorney is the one person at the table whose job is to make sure the buyer understands what they’re signing up for over the next 15 or 30 years.
With less than 20% down on a conventional loan, the buyer pays private mortgage insurance. Conventional PMI is a monthly premium with no upfront component. FHA loans work differently: they carry an upfront mortgage insurance premium of 1.75% of the base loan amount, paid at closing or rolled into the loan balance, plus ongoing monthly premiums.
Home inspections and radon testing are buyer expenses in nearly every Illinois transaction. A standard home inspection runs $300 to $500, and a professional radon test adds $150 to $400. Neither is legally required, but skipping them is a gamble. Illinois has some of the highest radon levels in the country, and mitigation installed later costs more than the test would have.
Who Pays the Buyer’s Agent Now
Before August 2024, the seller almost always paid both agents’ commissions as a bundled cost baked into the listing agreement. The total ran 5% to 6%, and the listing agent would advertise the buyer’s agent share on the MLS. Buyers rarely thought about it because they never wrote a check for it directly.
That changed on August 17, 2024, when a settlement with the National Association of Realtors took effect. Sellers are no longer required to offer compensation to the buyer’s agent, and listing agents can no longer advertise a buyer’s agent commission on the MLS. Buyers now negotiate their agent’s fee separately through a written agreement before the agent can show them homes.
In practice, many Illinois sellers still choose to offer buyer’s agent compensation because it broadens the pool of potential buyers. But the amount is now a negotiating point rather than an industry default. Some sellers offer nothing and let buyers handle the cost themselves. Others agree to contribute as part of the purchase price negotiations. If you’re buying, confirm how your agent’s fee will be covered before you start touring homes, because this catches people off guard when they realize the cost may come out of their own pocket.
Transfer Taxes by Level
Illinois imposes a state transfer tax of $0.50 per $500 of sale price on every property transfer.1Justia. Illinois Code 35 ILCS 200/31-10 – Imposition of Tax Counties can add up to $0.25 per $500 under separate authority.2Illinois General Assembly. Illinois Code 55 ILCS 5/5-1031 – County Real Estate Transfer Tax Combined, the state and county rate is $0.75 per $500, or about $1.50 per $1,000 of sale price. The seller customarily pays these taxes by purchasing revenue stamps at recording.
Many Illinois municipalities add their own transfer tax on top, and this is where the bills can climb quickly. Local ordinances determine the rate and who pays. Some towns put the entire amount on the seller, others on the buyer, and a handful split it.
Chicago has the most complex structure. The city charges a total of $5.25 per $500 of sale price, divided between the parties: the buyer pays $3.75 per $500 (the “City portion”) and the seller pays $1.50 per $500 (the “CTA portion,” which funds the Chicago Transit Authority).3City of Chicago. Real Property Transfer Tax (7551) On a $350,000 Chicago condo, the buyer owes $2,625 and the seller owes $1,050 in city transfer taxes alone, before state and county taxes are added. The “Bring Chicago Home” referendum, which would have created a graduated tax with higher rates on properties over $1 million, was defeated by voters in March 2024, so the flat $5.25 rate remains in effect.
Before you assume who pays the municipal transfer tax in your deal, look up the ordinance for the specific city or village. The answer isn’t the same two towns over.
The Property Tax Credit from Seller to Buyer
Illinois property taxes are paid in arrears, meaning this year’s bill covers last year. That timing mismatch creates a real problem at closing. The buyer will eventually receive a tax bill covering months when the seller still owned the property, and without a correction at closing, the buyer would be stuck paying for someone else’s time in the home.
The fix is a seller credit. At closing, the seller gives the buyer a dollar-for-dollar credit for taxes that have accrued during the seller’s ownership through the closing date. Because the actual current-year bill doesn’t exist yet, the parties estimate it.
Most Illinois contracts prorate taxes at 105% of the most recent bill, building in a cushion for expected increases. In reassessment years, or when a homestead exemption won’t carry over to the new owner, buyers often push for a 110% proration to avoid a shortfall. The math is simple: take the adjusted annual tax estimate, divide by 365 to get a daily rate, then multiply by the number of days the seller owned the property during the current tax year. That total comes off the seller’s proceeds and shows as a credit on the buyer’s side of the closing statement.
This credit is one of the larger line items at an Illinois closing, especially in the collar counties around Chicago where property tax bills regularly top $10,000. A late-fall closing after the seller has owned the home for most of the tax year can easily produce a credit of several thousand dollars.
Prepaid Interest and Escrow Deposits
Buyers also face a separate category of closing expenses that often surprises first-time buyers: prepaid items and escrow deposits. Prepaid interest covers the daily interest on the mortgage from the closing date until the first monthly payment kicks in.4Consumer Financial Protection Bureau. What Are Prepaid Interest Charges? Closing later in the month means fewer days of prepaid interest, which is why some buyers prefer a late-month closing date.
The lender will also collect an initial deposit for the escrow account, which holds funds for future property tax and homeowners insurance payments. These deposits typically cover several months in advance so the lender has enough on hand to pay those bills when they come due.
Federal law limits the cushion. Under RESPA, the maximum escrow cushion is one-sixth of the estimated total annual escrow payments, roughly two months’ worth.5eCFR. 12 CFR 1024.17 – Escrow Accounts If annual property taxes and insurance total $9,000, the lender can hold up to $1,500 beyond what’s needed for upcoming disbursements. Some lenders collect right up to the federal limit, so it’s worth checking that the initial escrow deposit on the closing statement matches the regulation.
What’s Actually Negotiable
Illinois custom assigns most of these costs, but custom isn’t law. Who pays the owner’s title policy, who covers the municipal transfer tax where the ordinance is silent, whether the seller contributes to the buyer’s closing costs or buyer’s agent commission — all of these can move in the purchase contract. In a buyer’s market, sellers often agree to credits that offset recording fees, prepaid items, or even part of the loan origination. In a seller’s market, buyers sometimes agree to pick up costs that would ordinarily sit on the seller’s side.
The one bill no one can shift is the one your own lender and attorney charge you for work done on your behalf. Everything else is a conversation. Read the contract carefully before you sign it, because the allocation of closing costs is set the moment both parties agree, and changing it later takes everyone’s consent.