I would like to know how pays for the house closing cost (buyer or seller) in Souther California! What are the other things I need to make sure before closing !
Everything is negotiable, having said that, here is what's customary:
Seller pays: Seller's portion of escrow fee, owner's title insurance policy, seller credits to buyer if any, city & county transfer taxes, agreed to repair costs and sales commissions.
Buyer pays: Buyer's portion of escrow fee, lender's title insurance policy and lender fees, and down payment of course.
I use 1.5% of purchase price for buyer and 1.5% for seller, it might be closer to 1%, in all my estimates. This does not count sales commissions on the seller's side and does not count lender fees on the buyer's side ... commissions and lender fees can vary greatly depending on the deal.
Each area has a "common for the area" or "traditional for the area" for example Northern California is different from Southern California where as in NoCal the buyer pays for owners title and in SoCal the seller pays owners title. With that said here is what is traditional for Southern California.
Escrow Fee: Split 50/50 or "each pay own" pretty much means the same.
Owners Title: The seller pays owners title.
HOA document and transfer fees, Transfer Taxes: Paid by the Seller
Lenders Title: Paid by the buyer
For estimate you can use a title net sheet here is a link to one
Escrow Fee: Split 50/50 or "each pay own" pretty much means the same.
"Split 50/50" means each pays half of the total escrow cost. While that is never taken literally by escrow, "each pay own" is more correct. Buyer and seller escrow costs are never equal, so 50/50 would inevitably be unfair to one party or the other.
There is a differences between escrow cost and the escrow fee. You are absolutely correct the escrow cost are different for the buyer and seller, however the escrow fee which is included in the sum of the escrow cost are commonly split 50/50. This 50/50 method is so common it's implemented in netsheets provided by title companies and the Realtor association please see link provided in my last post and below screenshot.
It doesn't say 50/50, it says "split", meaning, neither buyer nor seller pays everything, it doesn't mean seller pays 50% and buyer pays 50%. 50/50 suggests seller would pay 50% of buyer's loan junk fees like for example loan tie-in-fee or notary fee which are unique to buyer. Escrow fees are rarely, if ever, the same for both seller and buyer.
Yes it does, default is 50/50 however as you can see you can use the slider changing the ratio this is just the escrow fee. Not sure why you're thinking it includes loan, tie-in, or notary fee's those are separate from the escrow fee. I went ahead and filled one out so you can see.
I see what you're getting at. We are talking about two different things. I think of an escrow fee as money the closing agent (escrow company) puts in their pocket for services they render, such as, the 50/50 escrow fee you mention, plus demand fee, wire fee, grant deed fee, trust certification fee, loan tie-in fee, etc...all the fees paid to escrow that one typically sees on a hud-1. If you look at all the fees paid to escrow, buyer and seller are almost never equal, thus, saying 50/50 is not appropriate. If you look at the one base fee charged by escrow, it is most of the time equal ... although I highly doubt a bank selling one of their reo's that requires you use their escrow is truly paying as much of that base fee as the purchase agreement suggests.
I would be a little careful using one title company's definition of a 50/50 escrow fee as a basis for concluding that writing 50/50 on the standard CAR form is going to be interpreted the same by all escrow companies.
It's kind of a moot point because however it is interpreted, both buyer and seller, after review, approve and sign escrow instructions and that then becomes the controlling authority for the balance of the transaction.
This is hardly something that keeps me up at night. I do think "each their own" is much clearer and more descriptive.
The take-away here is that total escrow fee is more than the base fee that is sometimes split 50/50.
Just the escrow fee nothing else is fairly common to split 50/50 in Southern California. Has nothing to do with trusting a title company most have the split option on the net sheet or when providing quotes or estimates. You can take a survey of 100 escrow officers and they'll tell you the same thing.
Regarding REO companies some will do a split 50/50 however on their side of the split there is a discount for example if escrow was $1400 split 50/50 that is $700 each side then the REO company shows a discount line item say $200 so net escrow fee to REO company is $500.
@Account Closed My purchase agreement specifies all escrow costs and who pays what. I often pay all seller costs to close escrow. But when we are sharing the costs, only the escrow service fee is 50/50. Every other cost is assigned to either the buyer or seller. I've never considered how the CAR contract deals with that. Costs to close escrow are never 50/50. It would be misleading to suggest that.
Just the escrow fee nothing else is fairly common to split 50/50 in Southern California. Has nothing to do with trusting a title company most have the split option on the net sheet or when providing quotes or estimates. You can take a survey of 100 escrow officers and they'll tell you the same thing.
Regarding REO companies some will do a split 50/50 however on their side of the split there is a discount for example if escrow was $1400 split 50/50 that is $700 each side then the REO company shows a discount line item say $200 so net escrow fee to REO company is $500.
Ed, I've seen at lease 100 closing statements. The total escrow fees paid by the seller has never been equal to the total escrow fees paid by the buyer, never.
@Account Closed My purchase agreement specifies all escrow costs and who pays what. I often pay all seller costs to close escrow. But when we are sharing the costs, only the escrow service fee is 50/50. Every other cost is assigned to either the buyer or seller. I've never considered how the CAR contract deals with that. Costs to close escrow are never 50/50. It would be misleading to suggest that.
The CAR form breaks out overall costs too. But it doesn't break out escrow fee (4.C.(1)). Escrow fee is the sum of the base fee (usually 50/50) plus several other fees specific to buyer/seller. To put 50/50 against line item (4.C.(1)) is misleading and incorrect. That's my only point. It's moot however, because escrow agents know what you really mean and do the right thing.
Please tell me which escrow does 50/50 on all line items I'm really interested in seeing who interprets 'escrow fee' as 50/50 for total fees paid to escrow.
Please tell me which escrow does 50/50 on all line items I'm really interested in seeing who interprets 'escrow fee' as 50/50 for total fees paid to escrow.
Jeezz, Ed, that's my whole point, nobody does 50/50 for total fees, that's why you should not put 50/50. I'm done with this discussion.
@Account Closed My purchase agreement specifies all escrow costs and who pays what. I often pay all seller costs to close escrow. But when we are sharing the costs, only the escrow service fee is 50/50. Every other cost is assigned to either the buyer or seller. I've never considered how the CAR contract deals with that. Costs to close escrow are never 50/50. It would be misleading to suggest that.
The CAR form breaks out overall costs too. But it doesn't break out escrow fee (4.C.(1)). Escrow fee is the sum of the base fee (usually 50/50) plus several other fees specific to buyer/seller. To put 50/50 against line item (4.C.(1)) is misleading and incorrect. That's my only point. It's moot however, because escrow agents know what you really mean and do the right thing.
On my closing statements "escrow fee" means the base fee. These days that fee includes less and less. Draw deed, "signing", doc prep, demand fees....they have line items for things that used to part of the "escrow fee".
I have a family member selling land here in Santa Barbara. He's a college professor and plenty smart, but his closing statement is truly difficult to understand if you don't deal with these forms for a living. Essentially the consumer is agreeing to the fees after the fact. They have no idea going in what will be needed and what escrow will charge. The consumer can't really shop around as they don't what anything is called and wouldn't know what to ask.
I hear you. It used to be worse. I think there was a law passed some years back that basically said escrow has to actually perform the service before it can charge for it, things got better but one wonders why they can't just include everything in the base fee. I remember one fee from a couple years ago that I still can't get out of my head, called an 'upload fee', wow, what was that all about.
Good point about consumer agreeing to fees after the fact. It's hard, especially if you are unfamiliar with the process, like anything. You can control it to a degree if you either choose your own escrow or negotiate before closing. If I choose escrow I have an discussion before hand, if I have to go with the other party's escrow I hold back until I get the estimated hud and from that I can (somewhat) negotiate before closing. As a lender I can hold back the wire, as a buyer I can hold back doc signing and/or cash to close, as a seller I can hold back the grant deed...not to hold up closing of course but to get the estimated hud. Sometimes, who cares, I just let it go.
Kind of like those slimy private lender's that in addition to points charge underwriting fee, doc prep fee, origination fee, loan discount fee, appraisal fee, credit report fee, lender's inspection fee, tax service fee, processing fee, wire transfer fee and 'other'. Hey, wait, that's me ... NOT :) I guess those escrow agents aren't all bad, they teach private lenders how to make money :)
Hmmmm, maybe I should start charging an 'upload' fee, makes a lot of sense in this new era of computers ... nah, to far out there, even for me :)
I hear you. It used to be worse. I think there was a law passed some years back that basically said escrow has to actually perform the service before it can charge for it, things got better but one wonders why they can't just include everything in the base fee. I remember one fee from a couple years ago that I still can't get out of my head, called an 'upload fee', wow, what was that all about.
The latest was $75 for "Seller's Package - Printing". If the seller's don't do email/elec. fax, they are charging to print the package and mail it. The mailing fees were all over the place. I told them to use my fedex acct. number for everything. They obviously noticed I noticed. They didn't use my account but started charging me totally reasonable overnight mail fees, at what looks like actual cost.
Escrow is a support service to sell title insurance. I once had an escrow rep here in Santa Barbara tell me he couldn't do escrows for my low value props in Kern because his overhead for escrows here was $700.00. Since the low value title policies are only $400-600, he'd be losing money.
I don't think escrow companies are getting rich. But nevertheless, junk fees are annoying.
Title companies offer packages with title & escrow combined at very reasonable rates, and they include everything except things like notary and recording ... no junk fees. This is for loan refinance escrows. Not sure if it's available for buy/sell escrows.