What to do with junk fees charged by escrow and title company?

Asked by Wei-min Chang, 90034 Sat Jul 17, 2010

Can we negotiate on the fees charged by escrow and title companies? Who do it? ourselves or my agent? What kind of fees are likely to be waived?

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Cameron Piper, Agent, Forest Lake, MN
Sat Jul 17, 2010
Wei-min Chang,

I have found that the vast majority of title companies won't negotiate their fees. Before everyone jumps in to tell you that title companies should negotiate, tough economy, work for the consumer, blah, blah, blah - I should point out that shady title companies are not something you want to mess with. Imagine how you would feel if you found out later that you thought the previous mortgage was paid off, but it wasn't. Think it doesn't happen? In my home town the city used a title company to compensate a home owner for the purchase of their property in a eminent domain suit - title company took the money - didn't send it to the previous mortgage company - city had to pay the mortgage themselves. Thats right, they bought the same property twice.

Be careful in what you go shopping for, most title fees are fixed (state taxes, etc.) the only real fee is for the closing services and possibly some title searching, but I would strongly caution you against 2nd rate service here.

Cameron Piper
Web Reference:  http://www.campiper.com
1 vote
Heather Paul, Agent, Santa Monica, CA
Sun Jul 18, 2010
Yes, these fees are negotiable. I would speak with your agent if you are upset about the escrow and title fees. These fees are usually set by the purchase price of the home. Talk to your agent, there are usually brochures about the title and escrow fees that explain them better.
0 votes
Thom Colby, Agent, Irvine, CA
Sat Jul 17, 2010

Here's teh best way to approach it;
1) Use an independent escrow company that is not affiliated with or owned by a Real Estate Brokerage.
2) Ask your agent and the escrow officer to explain each of the fees they have included on the Estimated Closing Statement.
3) Most likely there are some fees that are put on the statement "just in case" there are some charges, such as courier fees, wire fees, notary fees, etc.
4) Make sure the Title Company is not affiliated with or owned by a Real Estate Brokerage - Use one of the "Big-5" Title Companies. Title Insurance rates are set by the Insurance Commission. If you are selling a house you recently purchased and you are using the same Title Company again, you will likely get the "short-term rate" which is discounted.

If you do not ask you will not get any fees reduced. I am not a proponent of reducing these fees because Escrow and Title protect YOU. They are the only true neutral 3rd party in the transaction.

Best of luck,

Thom Colby
Broker / Owner & Certified HAFA Specialist
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We NEVER DOUBLE-END a Transaction in our Brokerage. It is never beneficial to the Seller or to the Buyer and it is only beneficial to the Agent.
888-391-5245 Direct Cell
0 votes
Gregorio Den…, , San Diego, CA
Sat Jul 17, 2010
There are a lot of people in a transaction that need to get paid and a lot of things that need to be paid for. What you think may be junk, are usually 100% legitimate. There is no negotiation; if you asked to negotiate and they agreed, you should run away because that's a sign they were padding the fees in the first place. Contrary to popular belief, everything is NOT negotiable.
0 votes
Dp2, , Virginia
Sat Jul 17, 2010
Certain fees are negotiable, and others aren't. If you only plan to buy 1 property, then you probably won't be able to negotiate as large of a discount as you could if you were going to buy several.
0 votes
Emelia Sanch…, , Ontario, CA
Sat Jul 17, 2010
Wei-min Chang,

There should be no junk fees. The fees usually are a base charge and a percentage of the purchase price. These charges are now advised in advance on your good faith estimate so that you have an idea of the total costs needed to close. If there is a charge that you would define as a "junk fee" I would question it. Call escrow to explain it or your realtor.
0 votes
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