My first rental purchase..here are the closing costs..

8 Replies

I just closed on my first SFR in Memphis and was a little surprised at how much closing costs were. I have 2 more in escrow scheduled to close end of the month. I would like opinions on the costs if they seem average or not. If there is a way to reduce the costs on the next two I am all ears.

A. Origination Charges $1,545.00

02 Processing Fees $550.00

03 Underwriting Fees $995.00


B. Services Borrower Did Not Shop For $534.50

01 Appraisal Fee  $495.00

02 Credit Report  $27.50

03 Flood Certification to CoreLogic Flood Services $12.00

C. Services Borrower Did Shop For $1,895.60

01 Home Inspection  $250.00

02 Pest Inspection Fee  $75.00

03 Title - Closing Protection Letter $50.00

04 Title - Lender's Title Insurance to Title Service $783.60

05 Title - Notary Fee to CSS $150.00

06 Title - Overnight / Express $25.00

07 Title - Settlement Fee to Title Service $562.00

D. TOTAL LOAN COSTS (Borrower-Paid) $3,975.10

@Brent Olsen the fees seem in line with any purchase transaction - the one that sticks out to me is the title company charging a settlement fee and a notary fee - assuming you closed in your home state and not at the title company. You should be able to get a notary for free at a bank and I would ask title to reduce the settlement fee since you didn't take their closers time, conference room or get free cookies at the closing.

Easier to beat up title fees than lender fees, which would be your next stop.

Hopefully, you are not further surprised by the taxes in Memphis - city and county property taxes billed separately.

You can always ask the bank to waive or lower the OC. Wondering why your paying pest inspection, we usually have seller cover that and include a 1 year warranty. Closing protection letter is usually $25 in our area. Settlement fee to title service of $562, wondering what that is about.

Originally posted by @Travis Sperr :

@Brent Olsen the fees seem in line with any purchase transaction - the one that sticks out to me is the title company charging a settlement fee and a notary fee - assuming you closed in your home state and not at the title company. You should be able to get a notary for free at a bank and I would ask title to reduce the settlement fee since you didn't take their closers time, conference room or get free cookies at the closing.

Easier to beat up title fees than lender fees, which would be your next stop.

Hopefully, you are not further surprised by the taxes in Memphis - city and county property taxes billed separately.

Good title companies don't just send a package to a buyer and hope all goes well. If he closed on a TN purchase in CA, title likely sent a licensed title professional to get ink on those docs, package them up, send copies of necessary funding docs via fax/email, and return them to title. 

I love the "easier to beat up title fees" comment. 

Originally posted by @Tom Gimer :
Originally posted by @Travis Sperr:

@Brent Olsen the fees seem in line with any purchase transaction - the one that sticks out to me is the title company charging a settlement fee and a notary fee - assuming you closed in your home state and not at the title company. You should be able to get a notary for free at a bank and I would ask title to reduce the settlement fee since you didn't take their closers time, conference room or get free cookies at the closing.

Easier to beat up title fees than lender fees, which would be your next stop.

Hopefully, you are not further surprised by the taxes in Memphis - city and county property taxes billed separately.

Good title companies don't just send a package to a buyer and hope all goes well. If he closed on a TN purchase in CA, title likely sent a licensed title professional to get ink on those docs, package them up, send copies of necessary funding docs via fax/email, and return them to title. 

I love the "easier to beat up title fees" comment. 

 That hasn't been my experience - I have bought and sold a lot of properties receiving the title docs via email with a return overnight label. I have a notary in my office, execute docs and send them back to title. You are in the industry so I am sure you have examples of it not working out. Of course, the lender or title could have the requirement of title professional presenting the package that just hasn't been my experience. 

Originally posted by @Tom Gimer :
Originally posted by @Travis Sperr:

@Brent Olsen the fees seem in line with any purchase transaction - the one that sticks out to me is the title company charging a settlement fee and a notary fee - assuming you closed in your home state and not at the title company. You should be able to get a notary for free at a bank and I would ask title to reduce the settlement fee since you didn't take their closers time, conference room or get free cookies at the closing.

Easier to beat up title fees than lender fees, which would be your next stop.

Hopefully, you are not further surprised by the taxes in Memphis - city and county property taxes billed separately.

Good title companies don't just send a package to a buyer and hope all goes well. If he closed on a TN purchase in CA, title likely sent a licensed title professional to get ink on those docs, package them up, send copies of necessary funding docs via fax/email, and return them to title. 

I love the "easier to beat up title fees" comment. 

 I did everything with docusign via emails..the only person that came to me what the notary upon closing of the docs...

Originally posted by @Travis Sperr :
Originally posted by @Tom Gimer:
Originally posted by @Travis Sperr:

@Brent Olsen the fees seem in line with any purchase transaction - the one that sticks out to me is the title company charging a settlement fee and a notary fee - assuming you closed in your home state and not at the title company. You should be able to get a notary for free at a bank and I would ask title to reduce the settlement fee since you didn't take their closers time, conference room or get free cookies at the closing.

Easier to beat up title fees than lender fees, which would be your next stop.

Hopefully, you are not further surprised by the taxes in Memphis - city and county property taxes billed separately.

Good title companies don't just send a package to a buyer and hope all goes well. If he closed on a TN purchase in CA, title likely sent a licensed title professional to get ink on those docs, package them up, send copies of necessary funding docs via fax/email, and return them to title. 

I love the "easier to beat up title fees" comment. 

 That hasn't been my experience - I have bought and sold a lot of properties receiving the title docs via email with a return overnight label. I have a notary in my office, execute docs and send them back to title. You are in the industry so I am sure you have examples of it not working out. Of course, the lender or title could have the requirement of title professional presenting the package that just hasn't been my experience. 

This deal had a full loan package to be signed out of state. No chance something like that would happen on our watch without a third party making sure everything was completed in accordance with the closing instructions. CSS, a professional signing service, got paid $150 to go to the borrower and get the package signed. That's fair in my book.

Originally posted by @Brent Olsen :
Originally posted by @Tom Gimer:
Originally posted by @Travis Sperr:

@Brent Olsen the fees seem in line with any purchase transaction - the one that sticks out to me is the title company charging a settlement fee and a notary fee - assuming you closed in your home state and not at the title company. You should be able to get a notary for free at a bank and I would ask title to reduce the settlement fee since you didn't take their closers time, conference room or get free cookies at the closing.

Easier to beat up title fees than lender fees, which would be your next stop.

Hopefully, you are not further surprised by the taxes in Memphis - city and county property taxes billed separately.

Good title companies don't just send a package to a buyer and hope all goes well. If he closed on a TN purchase in CA, title likely sent a licensed title professional to get ink on those docs, package them up, send copies of necessary funding docs via fax/email, and return them to title. 

I love the "easier to beat up title fees" comment. 

 I did everything with docusign via emails..the only person that came to me what the notary upon closing of the docs...

Got it. $150-200 is the going rate for the service that CSS provided.

Thank you everyone that provided your thoughts and opinions...

Updated 9 months ago

Here is what I was told by the lender regarding the settlement fees..I am curious to know if the fees look reasonable: The settlement fee of $562.00 – it is labeled as a settlement fee, but here are the items included in their fee: 1. $250.00 Document Prep Fee – includes sending the title commitment package to the lender; preparing and sending the closing package to the notary, and once received back, getting the package to the lender for funding. 2. $250.00 Closing Agent Fee – they are the escrow off that funds on the loan. 3. $62.00 Shipping & Handling – the title company has to overnight the final package to the lender, and they have the courier deliver the deeds down for recording.

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