28 Feb Overview of Closing Costs and The Closing Statement

Let’s take a closer look at escrow fees charged for both Buyers and Sellers, that generally appear on the closing statement with other related closing costs such as loan fees, commission, required repairs, disclosure costs, title fees, taxes, and payoffs. 

Requesting an estimated closing statement from your escrow officer is a great way to understand all the closing costs related to the transaction before closing. Here we will explain a bit more about the settlement fee paid to the Escrow Agent for settling and closing your real estate transaction.

Buyer’s Escrow Costs

Escrow Fees

Escrow is highly involved in the process of a real estate transaction, including handling all of the funds and providing an overall accounting of the real estate transaction. The settlement agent ensures that all involved parties pay what they owe and that everyone is paid correctly per the parties’ instructions. The fee charged for closing the transaction. This service comes in the form of a settlement fee, which is calculated relative to the purchase price liability.

Consider the following:

• The escrow agent is properly licensed and bonded in California.
• They have the knowledge, training, and expertise to handle compliance with local, state, and federal regulations.
• Your escrow process follows all applicable laws, and the sale will be legal and valid.
• The escrow agent is an independent third party, competent and trustworthy to caretake and disburse transaction funds.
• The escrow agent facilitates that all conditions of the contract are met for closing.

Loan Tie-In Fee

 As part of the buyer’s purchase loan, The escrow company will collaborate with the buyer’s lender through all stages of the transaction, including receipt of loan documents and compliance with various Federal Regulations such as https://www.consumerfinance.gov/know-before-you-owe/ and https://en.wikipedia.org/wiki/Real_Estate_Settlement_Procedures_Act. The Loan Tie-In Fee accounts for the escrow company’s time and supplies needed to complete these items.

Processing Fee

Real estate transactions are complicated, and it is unusual for an escrow situation to come without any supplemental needs. These obviously vary, but can include spouses, ex-spouses, grantees, trustees, business partners, lender required debt payments, extra government agencies, and more. All of these would need to be dealt with in order to complete the escrow process, so the Processing Fee accounts for the time needed for contact and documentation. It is common for Escrow to include one or two added contacts in their escrow fee. Any significant number of added contacts would result in an increased Processing Fee.

 Notary Fee: Per State statute, the notary fee is $15 per notarized signature. Additional traveling fees may apply if the borrower is unable to appear in the escrow office for the signing.

REQUEST AN ESTIMATE: Once all the final terms have settled and the loan estimate received from the lender, request an estimated statement from your escrow officer for a complete accounting of all transaction fees. This will provide an estimate of the cash needed to close. Escrow will request funds after loan documents are received and provide the final estimate with actual funds needed at that time.

Seller’s Escrow Costs

Seller escrow fees will differ from a Buyer’s; however, they will both have the same Escrow Fee, Processing Fee. 

REQUEST AN ESTIMATE: Once all the final terms have settled and all demand statements received, request an estimated statement from your escrow officer for a complete accounting of all transaction fees. This will provide an estimate of net proceeds.

Notary Fee: Per State statute, the notary fee is $15 per notarized signature. Additional traveling fees may apply if the borrower is unable to appear in the escrow office for the signing.

Please contact us if you have questions or need assistance with an escrow. It would be our pleasure to assist you!