FINANCE, CLOSING & MATH — IL RE SALESPERSON CHEAT SHEET

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QUICK CUES & ANSWERS

Transfer Tax (State)

Q: How much state transfer tax on a $250,000 sale?

• Formula: (Sale Price ÷ 500, round UP) × $0.50

• Calc: $250,000 ÷ 500 = 500 × $0.50 = $250

• Who pays? Seller

• Family exemption? Yes (check local exemptions)

Property Tax Proration (In Arrears)

Q: Seller owned 90 days. Annual tax = $2,190. What's seller's credit?

• Formula: (Annual Tax ÷ 365) × Seller's Days

• Calc: ($2,190 ÷ 365) × 90 = $6 × 90 = $540 credit to buyer

• Key: IL taxes paid in ARREARS → seller credit flows at closing

Commission Math

Q: $300,000 sale, 6% total, 50/50 broker split, 80/20 agent/broker. What's agent net?

• Step 1: $300,000 × 6% = $18,000 (total commission)

• Step 2: $18,000 × 50% = $9,000 (agent's split)

• Step 3: $9,000 × 80% = $7,200 (agent net)

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HIGH-YIELD FORMULAS TABLE

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FINANCING & SETTLEMENT DECISION TREE

Loan Estimate vs. Closing Disclosure

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Rule: Buyer must receive Closing Disclosure ≥3 business days before closing to allow review.

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CLOSING: WHO PAYS WHAT

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Concept	Formula	Example	Key Notes
State Transfer Tax	(Sale Price ÷ 500, round UP) × $0.50	$150,000 ÷ 500 = 300 × $0.50 = $150	Seller pays; round UP
Tax Proration	(Annual Tax ÷ 365) × Days Owned	($1,825 ÷ 365) × 120 = $600	In arrears = seller credit
Commission	Sale Price × Rate × Agent %	$250k × 6% × 60% = $9,000	Varies by agreement
Cap Rate Value	NOI ÷ Cap Rate	NOI $50k ÷ 10% = $500,000	IRV triangle: I = Cap Rate × Value
GRM (Gross Rent Mult.)	Sale Price ÷ Monthly Rent	$200,000 ÷ $2,000 = 100	Quick income comparison
LTV (Loan-to-Value)	Loan Amount ÷ Appraised Value	$180,000 ÷ $200,000 = 90%	Higher LTV = higher risk
Depreciation (Tax)	Building Cost ÷ Useful Life	$300,000 ÷ 27.5 yr = $10,909/yr	Residential = 27.5 yr; commercial = 39 yr
Area → Acres	(Length × Width) ÷ 43,560	(220 ft × 198 ft) ÷ 43,560 = 1 acre	43,560 sq ft = 1 acre
Section to Acres	1 section = 640 acres	1 township = 36 sections	Gov't survey system
When	What	Timing	Content
Loan Estimate	Lender's estimate of loan terms, costs, rate	3 days after application	Interest rate, fees, monthly payment
Closing Disclosure	Final loan terms & closing costs (TILA)	3 days BEFORE closing	Actual costs, final rate (if locked), title/recording fees, prorations
Item	Typically Paid By	Why	At Closing?
State Transfer Tax	Seller	Statutory liability	Yes (held or paid by atty)
Chicago/Cook Transfer Tax	Seller + Buyer (split)	Local variation	Verify per county
Title Insurance (Owner's)	Seller (tradition)	Buyer gets long-term benefit	Yes, via title company
Lender's Title Policy	Buyer	Loan requirement	Yes, from title company
Attorney Review	Buyer + Seller (split)	Standard IL practice	Yes or per contract
Recording Fees	Buyer (typically)	New deed on record	Yes
Property Tax Proration	Seller → Buyer (credit)	Arrears = seller owes	Yes, as credit
Earnest Money	Buyer (deposit)	Held in trust; applies to down payment	Yes, credited at closing

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ILLINOIS-SPECIFIC THRESHOLDS & RULES

Closing Timeline

• Earnest Money Deposit: Next banking day after offer acceptance (no commingling)

• Attorney Review Period: 5 business days (standard; can be modified)

• Loan Estimate: 3 days after application

• Closing Disclosure: 3 days BEFORE closing

Property Tax (In Arrears)

• Assessed Value × Tax Rate = Annual Tax

• Seller credit = (Annual Tax ÷ 365) × Seller's Days Held

• Example: Sold March 15 (74 days owned) | Annual tax $1,825

- Proration = ($1,825 ÷ 365) × 74 = $370 (seller's credit to buyer)

Trust Account Rules

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