Escrow Fees / Escrow closing costs / Who pays what ?

 

What are the Seller's and Buyer's expected to pay in regards to Escrow Closing costs and Fees ?

Who pays what is dictated by the traditions and practices in each county and what the Seller & Buyer parties both mutually agree upon..... Let’s say you are working with your real estate agent and are in the midst of a real estate transaction.  By now you are probably trying to figure out how much it will cost to cover all expenses in order to close the transaction.  At this stage you are also probably trying to figure out who of the two parties will pay for the necessary services and fees - and when these amounts will need to be paid.  FYI - not all costs associated with closing a real estate transaction are always paid at close of escrow (COE).  Sometimes service providers like inspectors and surveyors want to be paid upfront for their services.  When you are trying to figure out what, who, when, and how much, there is one thing you should remember - different costs and service fees are paid at various times throughout the escrow proces.

With that being said, sometimes it makes more sense for one party to pay for a fee or service than it does for the other party. For example:  Most home inspectors investigate a property from the buyer’s view point (you hire them they work for you).  Home inspectors look for what could possibly be wrong or is non-operational in the home/property.  Inspectors look for the hidden surprises that the potential buyer may not have the skill to find and locate themselves.  If the inspector is being paid by the seller or the seller’s agent he, the inspector, may have an incentive or a directive to overlook things that he might not otherwise if he was working-and-being-paid for by the buyer.  For this reason, it is a known fact within the industry that it is best for the buyer to pay for their own property inspections.  After-all, the buyer is the one benefiting from the information obtained in the final "inspection report".

Again, keep in mind "every Real Estate transaction is different" therefore costs are allocated in various ways. The cost allocation is dependent on what the Seller and Buyer agree to in regards to "who pays for what?"  

Note:  • Below is a list of items in regards to "who-pays-what" from the Seller and Buyer perspective.  Each line item has a link that will explain and hopefully give you a better idea and understanding of what each item means.  • I have specifically put this list and links together in order for you to be more informed with the real estate Escrow Process and some of its definitions.  • I Oscar Castillo am not in the Escrow, Title nor Mortgage Lending business.  I am a local San Diego residential REALTOR® consultant - a Listing agent and Buyer's agent.  • Use the information to your advantage.... you can thank me some other time for this detailed information.

The Seller  can generally be expected to pay for:

• Owners Title policy premium

• Real Estate commissions

• Escrow fee

• Sub-Escrow fee

• Document preparation fee for Deed

• Request for demand fee

• Document transfer tax  - ($1.10 per every $1,000 of Sales price)

• City transfer tax / conveyance tax   - (if any)

• Payoff of all loans in Seller’s name  - (or existing loan balance if being assumed by buyer)

• Loan fees required by Buyer’s lender (VA, FHA)

• Beneficiary Statement fee

• Interest accrued to lender being paid off

• Statement fees & reconveyance fees

• Termite inspection & repairs/work  - (according to contract)

• Home Warranty Plan  - (according to contract)

• Any judgments, tax liens, etc., against the Seller property

• Recording charges to clear all documents of record against the seller

• Tax pro-ration  - (for any unpaid taxes at the time of title transfer)

• Any unpaid homeowner’s dues

• Homeowners transfer & document fee  - (according to contract)

• Any Bonds or assessments  - (according to contract)

• Any and all delinquent taxes

• Notary fees

• Messenger fees  - (if applicable)

• Zone disclosures

 

The Buyer can generally be expected to pay for:

• Title insurance policy premiums

• Escrow fee

• Sub-Escrow fee

• Document preparation fee  - (if applicable)

• Notary fee

• Recording charges for all documents in buyer’s name

• Tax pro-ration  - (from purchase/acquisition date)

• Termite inspection & repairs/work  - (according to contract - commonly paid by seller)

• Homeowner’s transfer fee/moving fee

• New loan charges  - (except those required by lender for seller to pay – VA,FHA)

• Interest on new loan from date of funding  - (to 30-days prior to 1^st payment date)

• Beneficiary statement fee for assumption of existing loan

• Home Warranty Plan  - (according to contract)

• Fire Insurance premium for 1st year

• Flood insurance if required by lender

• Home inspection     - (property inspection, roofing, geological, mold etc.)

• Messenger fees  - (if applicable)

 

* Would you like to be more familiar as to what the Escrow Process is?  I have put together a step-by-step outline with the hope that you would be more aware and knowledgable in regards to the process.  Use this Escrow Process  link. .... Let me know how else I can help you. 

 

 

 

 

 

 

Whether it be a purchase or selling of your home,  always know that it would be my pleasure to assist you with any questions you may have.  Make it a point to contact me and if you like what you hear,  then ideally together we can start working towards accomplishing your Real Estate needs and goals.

You can reach me anytime at (858) 775-1057

Oscar Castillo

Broker Associate - Coldwell Banker

 

Oscar@OscarSellsHomes.com