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Closing/Escrow/Settlement
Fee – Methods of closing
a real estate transaction vary from state to state, as do
the fees.
Title Insurance – Title Insurance assures the homeowner
that they have clear title to the property. The lender also
requires it to insure that their new mortgage loan will be
in first position. The costs vary depending on whether you
are purchasing a home or refinancing a home, so we will not
provide a range here.
Notary Fees – Most sets of loan documents have two
or three forms that must be notarized. Usually your settlement
or escrow agent will arrange for you to sign these forms
at their office and charge a notary fee in the neighborhood
of $40.
Recording Fees – Certain documents get recorded with
your local county recorder. Fees vary regionally, but probably
run between $40 and $75.
Pest Inspection – also referred to as a Termite Inspection.
This inspection tests not only for pest infestations, but
also other items such as wood rot and water damage. The inspection
usually runs around $75. If repairs are required, the amount
to cover those repairs can vary. The seller will usually
pay for the most serious repairs, but this is a negotiable
item. Usually (not always) the pest inspection fee is paid
by the seller of the home and is not normally reflected on
the Good Faith Estimate.
Home Inspection – Since it is the homebuyer’s
choice to obtain a home inspection or not, this cost is not
usually reflected on a Good Faith Estimate. However, it is
recommended. Keep in mind that the home inspector has
a certain set of standards he uses when inspecting a home,
and those standards may be higher than required by local
building codes. An example is that an inspector may
note there is no spark arrestor on a chimney but the local
building code may not require it. This sometimes leads
to conflicts between buyer and seller.
Home Warranty – This is also an optional item and
not normally included on the Good Faith Estimate. A Home
Warranty usually covers such items as the major appliances,
should they break down within a specific time. Often this
is paid by the seller.
Loan Tie-in Fee - Although this sounds like a lender fee,
it is not. When charged, it is usually by a settlement
agent (escrow, lawyer, etc) and is to compensate them for
services they provide in dealing with the lender.
Sub-escrow Fee - When charged, the source of this fee is
usually the title insurance company. It is usually to
compensate them for activities in coordinating with the settlement
agent (lawyer, escrow company, etc).
Courier Fee - Sometimes charged and deals with the costs
associated with ferrying documents around between the lender,
title, escrow, settlement, etc.
Homeowner’s Association Transfer
Fee – If you
are buying a condominium or a home with a Homeowner’s
Association, the association often charges a fee to transfer
all of their ownership documents to you.
 Refinancing
Associated Costs
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copyright 2000 by Terry Light and
RealEstate ABC
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