Home Selling in 93065>Question Details

homebuyer123, Both Buyer and Seller in Simi Valley, CA

Is this a valid escrow fee?

Asked by homebuyer123, Simi Valley, CA Wed Mar 28, 2012

The escrow company handling the sale of my home gave me a detailed worksheet with all costs to close my home.

Under Additional Disbursements, there is a 1,168 fee (reimbursement to buyer for owner's title policy: seller to buyer) plus a 365.75 fee (reimbursement to buyer for transfer tax).

These fees are not part of our purchase agreement with our buyers. Do I really have to pay for these fees?

Help the community by answering this question:

Answers

9
A) Read the RPA, Purchase Agreement. B) Call the Escrow Company for clarity. C) Consult with your listing agent/broker. D) Have a nice day.
1 vote Thank Flag Link Wed Mar 28, 2012
So, you mean you don’t understand how this works? HUD re-worked the way closing costs are disclosed so that it would be better for all concerned. Are you telling me that their form is confusing?

Let me try to explain: Under the rules that dictate how lenders are to disclose everything, all fees are disclosed to the buyer by their lender – including most (or all) fees paid by the seller. On the final HUD-1 there is a reconciliation that shows what the lender disclosed, and what is actually being charged. If the title and escrow fees are off by more than 10% (even if the seller is paying them,) the lender is required to reimburse the buyer money to bring the actual figures to within 10%. In order to do this, many escrow companies will show all of the fees as buyer fees, and then credit the buyer for the fees that are to be paid by the seller. That way they can do their analysis to see if a reimbursement is warranted. (That’s why it shows a reimbursement TO the buyer for the CLTA Tile insurance policy and the transfer tax.)

As for those fees not part of your purchase agreement – I think they probably are your fees, and they probably are on the purchase agreement. Those are typically seller fees in all of California; there are other fees (Escrow fees, ALTA or lender title insurance to name a few) that will vary from area to area. If you used a standard California Association of Realtors contract, you can find these fees addressed on the 2nd page in Section 4, paragraph C (2) and D (1.) If you used another form they will still be addressed somewhere. In any case you really should have gone through a detailed net sheet with your agent and had all of this explained long before now.
Web Reference: http://www.SacRELender.com
0 votes Thank Flag Link Wed Mar 28, 2012
I think the simple answer is that if you look at page two of your purchase agreement, you will see that there was a selection made for who would pay these items. They were probably noted to be paid by you. Tiny little boxes marked. You are probably thrown off by the fact that they are listed as the buyers cost and reimbursed by you, which is a confusion caused by they way the costs must be shown for the lending requirements. Your realtor probably delineated some of these estimated costs on something called the estimated buyers costs, at the time you signed your listing agreement.
Web Reference: http://Sterlingliving.com
0 votes Thank Flag Link Wed Mar 28, 2012
homebuyer123,

In So Cal, customarily the Seller (owner) buys a Owners Title Policy. The owners is paying for this policy, because the owner is stating - here is a policy that will back up the fact that I have the right to convey Title to you, the buyer. It would only make sense that the Seller/Owner needs to convey proper legal title and should pay for a policy that backs up that claim.

In Northern California, for some reason, the buyer pays the owner's policy - I don't completely understand why anyone would think that that is the burden of the buyer, but that is the way they do things up there. Remember the buyer is also going to pay for a lender's endorsement to your title policy, so the buyer is not getting away with anything.

Again, customarily in our area the Seller pays the tax stamps on the deed. Be thankful you live in Ventura County because the fee is 5 times high in Los Agneles County.

I posted a link to an article I wrote that explains on the how the fees get divided: http://homebuysblog.com/2011/08/11/who-pays-for-what-simi-va…

Ted Mackel
http://www.HomeBuysBlog.com
0 votes Thank Flag Link Wed Mar 28, 2012
The fees you are seeing as a credit to the buyer are most likely a result of how the HUD is written up. If you look at the closing statement, you will probably see the fees were paid by the buyer and then credited. The way the HUD is produced is not the easiest to read. Are you represented by an agent? If so, they can explain it thoroughly. If you are not represented by an agent, then I would recommend calling the escrow company and have them explain to you. Hope this helps.
0 votes Thank Flag Link Wed Mar 28, 2012
I am guessing you have agreed to pay up to $xxxx in closing costs for the buyer. It must have been a generous amount and now they are trying to use it up for everything. I recall the "old days" when I use to ask for closing costs and it was always a good idea to itemize them so the other side would not add crazy stuff. Bottom line is you agreed to $xxxx amount of them so you need to realize they could find them to use.
0 votes Thank Flag Link Wed Mar 28, 2012
First I would review your contract to see how the closing cost are being paid. Second, call your Real Estate agent. Third, call the escrow officer to ask the same questions. Nobody can give the answer correct answer you want unless you ask the parties involved.
0 votes Thank Flag Link Wed Mar 28, 2012
Please ask your Real Estate agent representing you in this transations.
0 votes Thank Flag Link Wed Mar 28, 2012
If you are the seller are you crediting th ebuyer with any closing costs? if not then why are they crediting the buyer? The onbly thing you may have to pay is transfer tax which is usually spolit 50/50 with the buyer. Have your agent review it with you.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Wed Mar 28, 2012
How could a realtor from New Hampshire know what the practice is in SoCal? BTW, you're wrong.
Flag Sat Nov 1, 2014
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2016 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer