There has been a lot of talk recently about full disclosure of those closing costs payable by purchasers of residential real estate. Efforts have been made by the federal government to reform the Real Estate Settlement and Procedures Act (RESPA), and to ensure guarantees from lenders of loan closing costs and fees. Recent litigation has federal courts divided as to the legality of fee-for-services markups by title companies. While all of these issues are as yet unresolved, there are other, more localized charges that should not be overlooked by residential buyers and sellers in the Chicago area. One example of these is the transfer tax charged by many municipalities in northern Illinois . The number of these has grown in recent years - approximately 118 towns in the six-county area have municipal transfer taxes and/or locally-mandated closing conditions (such as inspections or water bill payment), as has the amount of tax for many towns. These taxes must be paid no later than closing, and often take the form of stamps affixed to the deed of transfer (and without the affixation of which the deed of transfer may not be recorded). While I have never heard of anyone refusing to buy or sell based solely on the amount of transfer taxes the transaction would entail, it might be useful for realtors to educate parties early in a given sale as to what the local transfer tax ordinance means for them financially. This is especially important for buyers, who may barely be able to qualify for financing in the first place. We shouldn't assume lenders are educating consumers on this point: some of the good-faith estimates I see contain only a generalized (and understated) amount for transfer taxes. Early planning for costs which are readily determined will enable buyers to make more informed choices about their ultimate purchase. For more information about local transfer taxes, and other municipal requirements for residential real estate sales, go to Attorneys' Title Guaranty Fund's helpful website at: |
|
||||||||||||
