Buying or Selling a Home in Missouri vs. Illinois: What’s Different?

Buying or Selling a Home in Missouri vs. Illinois: What’s Different?

The Mississippi River might seem like a huge barrier between Missouri and Illinois, but it’s actually less than a mile wide. The two states share a lot of traits, especially in terms of real estate. If you have ever considered buying a home across the river—whether that means going east into Illinois or west into Missouri—the real estate process is mostly the same. But there are a few differences worth noting.

Which State is More Affordable? MO or IL?

Illinois has the dubious “honor” of being named one of the countries least tax-friendly states, and homeowners do, indeed, pay higher property taxes than Missouri. But a 2019 in the St. Louis Business Journal found that Illinois was more affordable. Illinois ranked #20 on the list of states, with residents spending an average of 78.2% of their income on living expenses. In Missouri, the percentage was 82.3% and a #34 ranking. 

Higher property taxes in Illinois are offset, in part, by lower home prices. Similar houses sell for less in some parts of the Metro East than their Missouri counterparts. Missourians also pay personal property tax which Illinois residents do not (but sales tax is generally lower). 

This means there is no definitive answer as to whether one or the other is a less expensive place to live. You will likely be spending the same amount of money for a comparable house, one way or another. 

That said, the entire regional real estate market has a huge range of home types, sizes, and prices. Once all of the different variables are factored in, the entire region can be considered an affordable place to live without significant differences in the cost of living.

Finding a House in Missouri or Illinois

House with "under contract" sign in Missouri or Illinois

Whether it is a small starter home or a luxury estate on a large piece of land, Missouri and Illinois have it all. House hunters of all types and with any budget will find something to suit their needs in either state. 

Many real estate agents in the region are licensed in both states, allowing them to show homes and complete sales in either Illinois or Missouri. Some people may prefer to hire someone based in the area where they live or where they are looking, but they should not feel restricted if they’re planning to move into another state. Berkshire Hathaway HomeServices Select Properties recently added two offices in the Metro East to their existing eight locations in and around St. Louis. No matter where you want to shop for a home, we have you covered.

More important than where your agent is based, is their familiarity with the small details that are different about buying or selling a house in the two states.

Occupancy Rules and Permits

Almost every municipality in the region requires some type of occupancy permit. Each time a property changes hands, whether through a sale or new renter, the city or county inspects the home. This inspection is more limited than the building inspection that assesses the repairs a house might need. It’s main purpose is simply to ensure it is habitable and there are no code violations.  

The rules and fees change from town to town. A realtor who is familiar with the area will be able to help a buyer obtain the proper certificate of occupancy along with the other paperwork associated with the sale.

Home Inspector Credentials

Man holding a house model under a magnifying glass, symbolizing differences in home inspector credentials in Missouri vs. Illinois

A building inspection is an important part of the real estate process. It is recommended for all buyers so they know about any issues before completing the purchase, which often becomes a good negotiating tool. This is true in both Missouri and Illinois. There is a difference, however, in who may do the inspections.

To become licensed in Illinois, home inspectors must have 60 hours of education in conducting inspections and the statutes and regulations that are specific to the state. They must also pass a Home Inspectors Exam for Illinois.

Missouri does not regulate home inspectors. The state only makes a recommendation that an inspector has liability insurance and certification through a reputable home inspection training association. This does not mean that there are no qualified home inspectors in Missouri. But a home buyer may want to make sure they find someone with sufficient expertise and experience.

Radon Testing and Mitigation

Radon is a naturally-occurring radioactive gas that is potentially harmful. The danger can be mitigated with a piping system that diverts the gas away from the living space. Many buyers and sellers know about radon and test for it, but the rules are different in the two states.

The Illinois Radon Awareness Act requires sellers to provide buyers with a pamphlet from the Illinois Emergency Management Agency about the dangers of radon. The seller does not, however, have to test the home for the gas, or pay to mitigate it if gas is found. If the seller has tested the home and radon is found, the Act states that this must be disclosed to a buyer. Just as any other issue with the home like an old furnace or leaky roof, the buyer can negotiate to have the seller take care of it.

Starting in 2013, the Illinois Radon Awareness Act also required that all newly constructed houses and apartments include radon mitigation systems. So radon testing and mitigation should only be a concern when buying or selling a home built before 2013.

Missouri has no legislation regarding radon testing, disclosure, or mitigation. Buyers who are concerned about radon should consider having the home tested before moving in.   

Should You Worry About Mine Subsidence?

The St. Louis region’s history includes a robust coal mining industry. Homes in Southwestern Illinois in particular are at risk for mine subsidence. This is the shifting and sagging of the earth beneath many of our modern-day buildings, causing problems with foundations and structural damage.

Since mine subsidence is a concern in the Metro East, there is a statute for 34 Illinois counties that automatically includes subsidence insurance as part of any homeowner’s insurance policy. Claims for damage are filed and paid through the Illinois Mine Subsidence Insurance Fund (IMSIF). If a homeowner has an ongoing claim through the fund where repairs are in progress (or damage is still happening due to ongoing earth movement), the claim benefits can be transferred and the new owner can continue to collect.  

Residents outside of those specific Illinois counties can purchase their own mine subsidence coverage if they choose. The same goes for Missouri residents who can not take advantage of the IMSIF.

The One Difference in Closing Costs

Cash, calculator, glasses, a small model home and a book on the difference in closing costs in Missouri vs. Illinois

Closing on a house in Missouri and Illinois is nearly identical in the types of costs due and how they are divided up between the buyer and seller. The only difference is the real estate transfer tax. 

This is a fee or tax charged whenever the title to a piece of property is transferred from one owner to another. Many states, including Missouri do not charge a real estate transfer tax. Those that do charge one can decide whether the buyer or seller is responsible for paying it.

In Illinois, the transfer tax is part of the seller’s closing costs. The amount is based on the sales price of the house, as well as what part of the state it is in. Home buyers in Chicago pay .75%, plus an additional .05% to Cook County! For the rest of the state, including the Metro East, the fee is .10%. While that amount is more reasonable, it can come as a surprise at closing for new Illinois residents.  

Choosing a Side of the Mississippi River

The differences in the home buying and selling process in Missouri and Illinois are not enough to make or break a deal for most people. They should not deter anyone from looking for a new home in either state. What is important is to find a house that fits your budget, your style, and the needs of your family. 

Our entire region has a wealth of wonderful, welcoming communities and beautiful homes on both sides of the river. Contact an agent at one of Berkshire Hathaway HomeServices Select Properties' 10 regional offices to start your search today.

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