Hard to answer without seeing your GFE. Mortgage professional estimate fees based on normal escrow charges. You wouldn't haggle the lender about fees that are not theirs (title and escrow fees). Total closing fees per HUD is normally between 3-4% of the loan amount (cost to obtain loan, closing costs, title fees, title insurance).
If you're looking to haggle. You should let your agent know that this is important to you and to try to negotiate where they send the file to for escrow. Customary for seller to control services with the guidance of the listing agent.
There are two parts to the title services in most contracts. (a) The title company does research to determine the title is clean and that nothing "clouds" that title, and all the debts against the property are known and are paid off. They create a policy to prove to the buyer that the title is clean. (b) Then, an add-on policy insures the buyer's lender of the same.
When the purchase contract is written, it generally states who will pay for the part which protects the buyer, and who will pay for the part which protects the lender. This is completely negotiable before the contract is written. Then, after you have signed the contract, it is an agreement --- which can be renegotiated if both parties agree. It is common practice (but not always the case) for the seller to buy the more expensive policy which protects the buyer. Then, commonly (but not always the case) the buyer purchases the add-on title insurance for their own lender. Like I said, that's the common way, but your own contract may have been written to some other specification.
I recommend that you look at your purchase agreement and see who was designated to pay for those two parts of the policy. You should also look at the contract to see which title company was named as the title company that would be used. Residential purchase agreements usually identify this. Sometimes it's a specific company and sometimes it's a more general agreement like "seller's choice" or "buyer's choice". If the title company is already agreed upon, then changing the title company requires a change in the agreement that both sides need to agree upon and then escrow can arrange for that new title company. (Be careful, though, because you may have already incurred title company charges if they have prepared much of the work already.)
Did you use a real estate agent? If so, check first with your real estate agent. If s/he cannot answer these questions, feel free to contact me directly and I'll put you in touch with my title guy who is extremely reputable and excellent at explaining these things.
Naia G. Waters
Realtor / Training Director
Prudential California Realty
3130 Wilshire Blvd., Suite 100
Santa Monica, CA 90403
Title insurance costs are charged upfront: prior to or upon closing. The title insurance policy charge is negotiable between seller and buyer. Title insurance fees and charges for title services are inevitable - at least lenders title policy is required to purchase - no matter if the transaction is a refinance, or purchase, or you are buying a brand new construction home.
Also, lenders require title policies up to the loan amount, while an owner's title insurance coverage is recommended to cover full property value. You can assume that no matter the company, unless you get a short rate, all companies will be in the same range for coverage. There are more than 25 title insurers servicing Southern California. You could use your lender's advice as to which one to choose. Or, you could run your own title company search, or stick with some popular ones.
The BUYER can generally be expected to pay for:
* Lenders title insurance policy (for the amount of the loan only)
* 1/2 of the sub-escrow fee
* 1/2 of escrow fee
* Document preparation (if applicable)
* Notary fees
* Recording charges for all documents in buyer's name
* Tax proration (for any taxes unpaid at the closing)
* Homeowner's transfer fee (if applicable)
* All new loan charges/ points (except FHA/VA loans)
* Interest on new loan from date of funding to 30 days prior to first payment date Assumption or change of records fee on existing loan
* Assumption of existing loan
* Inspection fees (roofing, property, geological, etc.)
* Termite work (according to contract usually section 2 )
* Home warranty (unless paid by seller, according to contract)
* Fire insurance premium for first year
Immediately ask for a Buyers Estimated Closing Statement of Costs from your escrow company, and a HUD1 statement from your lender, and compare the two. Question discrepancies, and NEGOTIATE (or have your agent do it on your behalf). One lender I use is currently crediting for appraisals (a savings of about $500) and many lenders are offering 0 points loans. Do apply with more than one lender, and make sure at least one is a mortgage broker who can shop MULTIPLE lenders for you, looking for savings on interest rates and fees.
ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
Since the purchase is taking place in Southern California Title & Escrow is handled by two separate companies. The escrow companies aren't regulated by the Dept. of Insurance and the fees are substantially higher.
is the home located in Los Angeles County? If so the escrow charge is split 50/50 between the buyer and seller. The title fees would be paid by the seller.
Also, its highly possible that your lender overstated the title fees on the Good Faith Estimate.
Faith Home Loans
This seems high. I am not a lender, however, as a realtor who closes a lot of transactions in the $250,000 to $350,000 price range here is my experience. Please note, everything is negotiable to a certain extent. Both title companies and escrow companies must post their rates with the government bodies that regulate their industry. They have a range of fees, so you should be working to get your loan at the low end of the range. Your realtor should be helping you with this
Title insurance and all title company junk fees (sub escrow, document fees, etc) are around $1,000, give or take $200. Escrow fees, including all their junk fees are about the same. Other items that you will pay, which may be bringing your total so high are loan origination fees (often 1 - 2% of the loan amount, although many direct lenders are writing loans at par, which mean 0%), discount points (if you are buying down your rate), and other lender fees (some lenders will either waive these fees or charge a flat fee). Of course, if you are setting up impounds, this will also increase your needed cash at closing.
Go over your good faith estimate with your lender and question every line. Right now, lenders tend to overestimate charges as new lending laws do not allow them to charge significantly more than is disclosed on their good faith estimate, however, they are also not allowed to charge significantly less so you want to keep them honest. Make sure you are understanding each and every fee on the estimate. Then shop it around. Lenders are aggressively shopping for good buyers right now, with home sales at a 15 year low, putting you are in the driver's seat. Also, ask your Realtor for a recommendation for a lender or two they have successfully worked with in the past. They can often help you negotiate lower fees. Good luck in containing your costs and Dare to Dream.
Shel-lee Davis, QSCÂ®
Certified Distressed Property Expert â€“ CDPEÂ®
Short Sale & Foreclosure Resource â€“ SFRÂ®
Certified HAFA Specialist â€“ CHSÂ®
Your Real Estate Consultant for Life
RE/MAX Palos Verdes Realty
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Any questions please free to contact me