Investing in real estate can be a great way to generate secondary income. However, it’s important to know that there are costs that are associated with the purchase or sale of home other than the contracted price. Below is a brief discussion of some of these added costs:
- Water/Sewer Full Payment Certificate: In the city of Chicago a full payment certificate is needed prior to transfer/sale of a home. The certificate is issued by the Department of Finance and it indicates that the water and sewer charges and penalties that accrued to a water account are paid in full or otherwise transferable to the subsequent owner. Depending on the real estate contract the responsible party could be either the seller or buyer. In order to obtain a full payment certificate an application with an application fee of $50.00 shall be made to the department of finance. However if the property is exempt from the Real Property transfer tax the application fee shall not be charged.
- Real Property transfer tax: Real estate transfer taxes are taxes imposed by states, counties and municipalities on the transfer of the title of real property within the jurisdiction. In Chicago sellers generally have the responsibility of obtaining and paying for transfer taxes. Depending on location of the property either the buyer has to pay the transfer taxes, some counties have a split in which buyer and seller will split the fee.
- Plat of Survey: Generally speaking, sellers have to provide the buyers attorney with a Plat of survey that conforms to the current minimum standard of practice for boundaries, this survey cannot be dated more than 6 months prior to the closing. The survey is important because it shows you how the piece of land that you are buying is divided and it makes certain that your property is not encroaching on another property, or that your property is not being encroached by another property. Believe it or not that there are many cases and disputes of property and boundary lines. The survey is crucial and is required in every real-estate transaction. Depending on the contract the buyer or seller may have to provide the survey prior to the date of closing.
These are just some of the costs associated with the purchase or sale of a property. Be sure to consult with your real estate attorney, to ensure that these items are taken care of.