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Mike, Other/Just Looking in Los Angeles, CA

How are escrow agent fees calculated and what should the normal fee to the escrow agent be?

Asked by Mike, Los Angeles, CA Sat Dec 4, 2010

I want to make sure the fee that goes to the escrow agent is not an over-charge, which may be due to a relationship between the escrow agent and the real estate agent. On a $300,000 sale, I was told the escrow agent fee was $1600, which is equally divided between the buyer and seller.

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Kawain Payne’s answer
Escrow companies like all professional service providers determine their own fees.

The is no "NORMAL" fee set for escrow companies.

Escrow companies will want to be competitive, but need to make a profit too. Try not to choose the company with the lowest price, just because they have the lowest price. Ask your agent which company he/she has worked with in the past, and which one was most efficient and timely. That is the one you want:)

Kawain Payne, Realtor
2 votes Thank Flag Link Sat Apr 6, 2013
Well first you need to shop around to find a flat rate escrow company I have seen some as low as 700 per sale. Think about this the escrow company takes a big check from the mortgage company and splits it into smaller checks and mails them off. That's what you are paying them to do so 700 is a very fair price 1600 isn't bad but I would shop around more. The fees involve.din buying and selling a house are a government sponsored scam so you have to do your research to keep from being taken for a ride
1 vote Thank Flag Link Wed Feb 6, 2013
Mike,

As other agents mentioned, escrow fee is negotiable but the most important aspect is that they will respond to questions, requests when needed. There are some escrow companies that offer low rates but be aware that you usually pay what you get because these companies will charge extar fee for services that other escrow companies include in the package. Usually agents have their working escrow companies that they are used to and will go extra miles to close the deal.

Good Luck,

Daniel Choi
Broker Associate
Nextage Capital Advisors
1521 Wilshire Blvd
Los Angeles, CA 90017

http://www.nextageventaja.com
1 vote Thank Flag Link Thu May 5, 2011
Lets be honest, agents usually choose the escrow company because of the kickbacks that the receive from them
Flag Thu Dec 5, 2013
Hi Mike;
Escrow fees are HIGHLY negotiable, especially in this economy.
Remember, it's not just the base fee (usually a flat fee and $1.00 to $2.00 per one thousand dollars of purchase price) but all of the add on fees (sub-escrow, document preparation, messenger fees, etc) that increase the cost to you.
For example, on a $500,000 escrow I closed on Thursday, the seller negotiated the escrow fee to a flat $750.00. By negotiating up front, the cost was fixed for the seller, and was a great fee compared to the going market rate.
This is the moment when your agent should be working hard for you.
Have them seek out at least 3 licensed reputable independent escrow companies, and bid for the job. BE AGRESSIVE- it's your money. As I tell my clients, every dollar is a dollar.
Then have them give you an estimate of total costs, or a HUD1 statement. That way you know you are comparing apples to apples, and there are no hidden fees.
There is nothing inherently wrong with working with a broker-affiliated escrow, as long as they have a great reputation and can remain neutral.
Last, but certainly not least, choosing the cheapest is not always the best answer. A good escrow officer can, and often does, make the transaction dramatically easier for all involved. Seek your agent's guidance on this. We have lots of experience and usually know who is best.
Good luck,
Deborah Bremner
The Bremner Group at Coldwell Banker
REALTOR, 00588885, ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
(D) 818.564.6591
http://www.thebremnergroup.com/news/
1 vote Thank Flag Link Sat Dec 4, 2010
As everything in real estate, it's negotiable. Don't hesitate to try getting lower escrow fees, you can negotiate with any partner (buyer, seller, escrow company, inspectors etc). Most escrow companies will charge around 1% of the purchase price. It's common that sellers and buyers pay their own escrow fees. If you want you offer to be super strong, you can offer to pay the other party's costs.
0 votes Thank Flag Link Sat Apr 6, 2013
I believe it's $2 for every thousand dollars. It's around that ball park.
0 votes Thank Flag Link Thu Feb 7, 2013
wow..we are being charged 2,500..should i be concerned????
0 votes Thank Flag Link Wed Feb 1, 2012
Mike,

The price that you've been charged for escrow sounds very fair. The amount is usually based on a flat rate of $x per $1,000 of the selling price plus additional fees for specific services. Most escrow companies are similar in price. There isn't a huge range of prices between companies. But, price shouldn't be the only deciding factor. Your agent recommends an escrow company usually because they have worked with them before, have good repore with them and know they are honest, hardworking and keep in good contact with their clients. So, if you have any questions, ask your agent. I'm sure he or she will be able to talk to you more about why they go with the escrow they do and explain more of the details of the fees and cost.
Web Reference: http://www.homesbydanny.com
0 votes Thank Flag Link Mon Jan 10, 2011
Mike,

The price that you've been charged for escrow sounds very fair. The amount is usually based on a flat rate of $x per $1,000 of the selling price plus additional fees for specific services. Most escrow companies are similar in price. There isn't a huge range of prices between companies. But, price shouldn't be the only deciding factor. Your agent recommends an escrow company usually because they have worked with them before, have good repore with them and know they are honest, hardworking and keep in good contact with their clients. So, if you have any questions, ask your agent. I'm sure he or she will be able to talk to you more about why they go with the escrow they do and explain more of the details of the fees and cost.
Web Reference: http://www.homesbydanny.com
0 votes Thank Flag Link Mon Jan 10, 2011
Hello Mike,
Escrow prices are not effected by relationship factors between the escrow agent and the real estate agents. The amount you specified is within the range of the value of the property. Escrows fees are not an exact proportion of the value of the property.

Hope this helps.
Web Reference: http://www.DavidNewHome.com
0 votes Thank Flag Link Sun Jan 9, 2011
On the web references link below is today's First American Escrow & Title Fees.

Happy funding, Rudi
0 votes Thank Flag Link Wed Dec 8, 2010
Mike:

The relationship between a title officer and a Realtor has nothing to do with title and escrow fees. Title companies have set rates for title insurance and escrow companies (closing companies) have set rates they charge for escrow fees. In many cases, the fees are available on the company’s website or in a booklet handed out by the escrow companies. There is usually a very small difference between the rates charged by various companies. Realtors recommend specific escrow companies because they’ve worked with the escrow officer before and have developed a good working relationship. There is no kickback to an agent of any kind – it’s actually VERY illegal. Here is a web site that may help:

http://www.hud.gov/offices/hsg/ramh/res/respamor.cfm#HT

As to how costs are divided between buyer and seller, that depends on how the purchase agreement was written: all costs are detailed carefully on page 2 of the contract. If there is uncertainty, an Addendum can be written to clarify things.

Lastly, as pointed out below, there can be room for negotiation for the additional fees such as wiring fees, processing fees, doc prep fees, courier fees, etc.
.
0 votes Thank Flag Link Mon Dec 6, 2010
That pirce is in the ballpark. While escrow fees are negotiable it is a service business so you want someone responsive and good. It can be maddening when you near closing and the escrow agent can't be reached quickly especially if the lender has issues. Price is not everything.
0 votes Thank Flag Link Sun Dec 5, 2010
Hi Mike, that sounds within the prices I've encountered... a little lower, actually. It may be worth calling escrow and asking if they'll give you a discount.
0 votes Thank Flag Link Sat Dec 4, 2010
Mike,

The fees will vary slightly from one Escrow company to the next, but they are not wildly different. The $800 fee that you have been quoted is in line with what I have seen out there. Generally they charge bet $1.75-2.00/ each 1,000, plus a flat fee which can range from $200-300 depending on the company you work with. You may be able to negotiate some of the other fees, i.e. document scanning, courier, notary, etc. and ask them to include as part of your fee.

Congratulations on the purchase of your new home.
0 votes Thank Flag Link Sat Dec 4, 2010
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