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Posted over 11 years ago

Don’t be afraid to negotiate closing costs. It’s Real Estate.

Don’t be afraid to negotiate closing costs.  It’s Real Estate.


And in real estate, EVERYTHING is indeed negotiable.  With the market starting to show signs of fresh life in some markets, more people are asking for mortgages again in several parts of the country.  And with that, an age old discussion comes back with it…closing costs.  A.K.A.  What are all these fees for?  


The closing costs charged by some lenders are enough to refit that grubby bathroom or buy a great flat screen TV with movie surround sound if you are not careful.  While lending practices have tightened up, lenders are still very creative and come up with a bundle of added costs that in themselves don’t seem so expensive but add up to a tidy sum:


Example:


Printing Fees                           $ 47.50

Preparation Fees                      $ 50.00

Admin Fee                               $ 65.00

PDF Fees                                 $ 25.00

Miscellaneous                          $100.00

Origination Fee*                      $150.00

Broker Fee*                            $100.00

Funding Fee*                          $ 50.00


Grand Total                            $487.50


* These last three are the same thing so don’t get charged 2 or 3 times for same thing.


Upon seeing some good advice on the Internet, we were reminded that for every closing, revisit these charges if we see items that appear duplicated or unreasonable.  Some people have been known to charge extravagant amounts for title searches as an example.  Some fees I have seen that are supposedly ‘standard’ I have never seen anywhere else except in one particular office.  Be wary and not afraid to speak out!


Standard lender speak is generally that the fees are standard and nobody else ever has a problem.  However, when receiving pushback, do remind them that if they are unreasonable, you do have a right to dispute them as they do have to disclose.  The result is closing costs can be reduced by hundreds of dollars.  Just goes to show if you don’t ask, you don’t get.  Similar to all the new fees we see in the banking world in recent months, lenders are still quite creative indeed.


Now don’t get me wrong, there are several lenders out there that do excellent work, whether direct or mortgage brokers.  They take care of their clients fair and square with reasonable pricing.  When you work with enough of these, you will invariably come across the ones that don’t and as always be wary.  So always be aware.  You just might be able to buy that flat screen TV for my breakfast/kitchen with the money you can save!



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