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Starting August 1st, it is going to be a bit more expensive to buy and sell real estate in the Chicagoland area; title insurance and escrow closing fees are going up.

Chicago Title's new rate structure includes a $50 bump up on all owners title insurance policies (a seller cost) and $50 more for all escrow closings (typically a buyers charge). The charges for "title indemnities" and (Chicago) water department full account payment certifications are also being increased.

I will not be surprised to see similar announcements from other title companies in the not to distant future.

Kudos to CT for kicking up that TI fee, effective August 1, pure nefarious genius there. Property tax bills are supposed to be mailed out on August 1st - payable September 1. When Mortgage Companies expect a tax bill due, they demand that the title insurance company guaranty payment of the taxes. Title company are happy to oblige. They collect money from the buyers who will be responsible to pay the taxes and set up escrow accounts to hold that money until the tax bills are actually issued. And - back to that genius part - the title company charges the buyer a handling fee (a newly increased fee) for the TI. The hapless buyer has no say in the matter. The lender demands it. The buyer pays for it. TIs will be imposed on most transactions until those tax bills are issued and I don't know about any of you, but for myself, just don't see anything out there to suggest that they will come out any time soon.

To be sure, a $50 on either side of the transaction is not going to kill the market or gain much notice in most circles. Yawns no doubt. But, if you place these increases into context by reflecting back on the overall roll-up of closing costs in recent months, you can see that its not just the declining market prices or the tightened lending standards that are depressing the number of contracts closing or the overall malaise in the marketplace.

-> Seller paid City of Chicago transfer tax levied at $3.00 for each $1,000 of the sales price
-> Cook County Recorder's fee increase for mapping and computer document systems
-> Processing fees associated with title company State Predatory Lending Database compliance in all Cook County mortgage transfers
-> City of Chicago Water Department full account payment certification fees increased
-> Cook County Property Tax Homeowners Exemption laws have changed reducing the dampening effects - likely accelerating tax increases
-> City of Chicago's announced increase of the local tax rate.
-> increased premium rates for Mortgage Insurance - when available.

Its not only harder to buy and sell real estate right now; its also costlier.


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