It sure seems like something is not right with this scenario as I believe it could have been structured a lot better!
May I ask you a few questions off this site? There may be time to make make changes and save a lot of money!
Email me at: Steve@pro-option.com
Closing cost include items such as title insurance, document stamps, prorated property taxes, commissions, prorated HOA fees, etc. On some loan types those fees can be included in the loan. For first time home buyers, displaced home buyers, or buyers who have not owned a home in the past three year there are down payment assistance programs to aide in covering closing cost.
With regards to how agents are paid. In most cases the Realtors commission is paid from the Sellers proceeds from the sale.
Michael D. Bellamy, P.A.,
REALTORÂ®, SFR, BPOR
Charles Rutenberg Realty, Inc
933 Lee Rd, Suite 300
Orlando, FL 32810
"The Standard of Excellence"
Grab your agent and closing agent from the title company and get a copy of your HUD1 and review it BEFORE closing to insure no surprises! Typically 3-5% of the cost of the home is a good guide for closing costs.
Highest and best regards,
REALTORÂ® | Century 21 Elite Home Finders
Certified BPO Specialist
5401 S. Kirkman Rd., Ste 725 | Orlando, FL
Direct: 407.256.8190 | Fax: 407.264.8073
Visit http://www.ThePremiumProperties.com and find your dream home today!
I apologize for arriving late to the party.
I hope it has been sorted out. I would first say that as the agent helping you with the purchase, I would negotiate with the seller about the $2400 processing fee. Basically that is the charge that the attorney is charging the seller to process the short sale and in turn the seller is passing the cost on to you. On my short sale contracts in which the sellers are asking for that; I put that the lender or seller will be responsible for the amount, not the buyers. Also the short sale lender (bank that holds the mortgage on the property) usually, if asked by your agent in the contract pay for their part of the title costs, lender policies etc. The buyer does have some obligations as well. You will need to pay for the owners title policy as well as other costs associated with your mortgage (generally about 5% in addition to your down payment amount based on the type of loan selected). You can always ask the lender to help pay some of those costs. You never now. Many short sale closings I have done, seller has paid 3% towards buyers closing costs and prepaids. If you are doing an FHA mortgage that requires 3 1/2% down payment, that money has to come from you or from gift funds. If with the credits from the seller the amount left is less, then those credits will be adjusted. Your $1,000 dollars will be subracted at closing from the amount owed.
Please go to http://www.watsontitleservices.com and click on buyer's closing cost estimator. It is a vary good and accurate link.
If you have any questions, or if I can help you with the purchase please let me know.
Realtor, Watson Realty Corp
I have several blogs and tips on my website that can spell it out for you. Here is a direct link to a breakdown of closing costs in Florida: http://www.rentbuysellsarasota.com/blog-info/closing-costs-f
And here is another one showing who pays what: http://www.rentbuysellsarasota.com/blog-info/closing-costs/
You can also search my site using the words "title" and "Closing Costs" to get even more examples.
To answer your questions:
How do closing costs work? - see the link above
Can any be incorporated into the mortgage loan?- yes, some of them can be, talk to your mortgage lender to see which costs can be incorporated into the loan that you've been qualified for. Allowable closing costs vary depending on the lender and type of loan.
Or all of them paid in cash at closing?- some fees, like courier fees, loss mitigator fees etc cannot be included and need to be paid cash at closing but must be disclosed on the HUD.
And how do the agents get paid? - typically the seller will pay the agent's Broker the commission. In a short sale, the sellers' bank who is agreeing to do a short sale will pay the commission, sometimes they reduce the commission the agent gets paid to compensate for the loss they are taking.
(Actually, you should be asking your Agent.)
Go to your Title Company and ask your Escrow Officer for a copy of the HUD1,
then ask them to go over it for you.
Good luck and may God bless
EMD is usually required for all transactions. Now whether or not it is paid at submission or after third party approval...it differs from transaction to transaction. Paying for all of your closing costs could be because they have already had the bank require no contingencies and any % towards closing would not be paid by the "bank". Closing costs cannot be incorporated into a mortgage. Paying them in "cash" at closing is the norm. The agents and their brokers are paid by the sellers from proceeds of the sale. And paying that $2400 for a processing fee???? Yikes....that's high.
If you have any other questions...you've come to the right place. Trulia is a great place to get an assortment of answers from some great agents!
If you would like my help...please feel free to email me!
Charles Rutenberg Realty