Flipper/Rehabber · Easton, PA · Member since 2013 · 224 posts · 36 votes
We are about to close on our first place and our realtor with keller williams is using their in house title company. The house cost 40k but our closing costs he said would be 5k, we are in eastern PA. My first thought was that sounded high. Can you bring your contracts to a title company of your choosing that does it for less? Or is it fairly standard whoever you go to.
In california, mostly seller pays agent fee of about 5~6%, which covers both of listing agent (seller's) and selling agent (buyer's), 2.5~3% each. Buyer does not pay agent commission.
And closing cost is about 3% of the purchase price.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
yes, that seems high, even if it's a financed deal and that number includes pre paid insurance and taxes escrows. Your purchase contract will say who pays what, and who picks the title co. Get a Preliminary HUD, post any fees here if you like, to make sure it's legit. Is it a short sale, and you're paying some sort of negotiation fee?
Flipper/Rehabber · Easton, PA · Member since 2013 · 224 posts · 36 votes
13y
It was a cash deal. I looked back at the summary of buyers costs he sent us and realize that 2,700k or 6% is going towards brokers agency fees? i thought the seller pays the brokers/agents not the buyer, correct?
It was a cash deal. I looked back at the summary of buyers costs he sent us and realize that 2,700k or 6% is going towards brokers agency fees? i thought the seller pays the brokers/agents not the buyer, correct?
Post a copy of the summary (redact any personal information) and we can probably give a more detailed answer to whether the costs are reasonable or not.
And don't hesitate to call the title company and ask them flat-out why the commission is on your side of the HUD and not the seller's. It's possible that it was a mistake; it's also possible that the summary is misleading and you're interpreting it incorrectly (I misread HUD-1 statements all the time!)...
Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
13y
$1,000 sounds about right for a cash purchase: $325 for closing fee, $125 for title search, $400-500 for title insurance, and a few other small items. Don't hesitate to negotiate title company fees (other than title insurance, which is probably fixed).
Flipper/Rehabber · Easton, PA · Member since 2013 · 224 posts · 36 votes
13y
Apparently there is a Buyer's Agency Contract that my husband signed not fully realizing that it said we would basically have to pay the broker 6% of the sale when we buy.( I don't remember this being discussed at any length, I am sure it was mentioned) . I have never heard of this, do other agencies do this?? I am upset but feel there is nothing we can do now and will have to go with a different agency after this till my husband gets his license. Can we somehowe negogiate this fee before we close??
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
13y
A "buyers agency fee" ... I've yet to encounter that one ... So essentially, your agent will pocket half (3%) of the sellers commission, plus an additional 6% from you? ... or are both agents getting 6% on this one?
Is this an unlisted deal (and there is no sellers agent)? Even in those instances - if we use our agent - we only pay him a flat finders fee (if he brought us the deal).
I'd be having a serious discussion with my agent which would include the words "we will never work together again"
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
13y
Well, I'm not an agent and I did most of my deals without buyer's agent. With that said, I've never heard of any buyer having to pay commission to their buyer's agent, unless this is a deal that wasn't listed.
For example: If your agent approached FSBO and made an offer. Where there might not be any commission. If this is a normal listing, then I do believe that this is out of the ordinary, as the commission paid by the seller, will be split with the buyer's agent. So, he'll double dip and he'll only do one deal with a client.
I don't even see how this agent can stay in business, when he/she has to compete with others buyer's agents, who don't charge that. This is really strange in my opinion
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
13y
Maybe it would be worthwhile for you to contact the top person at Keller Williams and ask in general if their buyer's agents get commission on top of their shared commission?
Also, even taking off $ 2600 of the $ 5,000 closing cost - that still leaves 2400, which is really high
Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
13y
Jessica,
Did this buyer's agent bring you the deal, If so they need to get paid on what you agreed to pay, and it looks like your husband sign it without asking questions and so closed the deal and please ready and understand everything before you sign anything on the next deal?
Flipper/Rehabber · Easton, PA · Member since 2013 · 224 posts · 36 votes
13y
This was a sale off the MLS and maybe it is just this particular broker that has this whole buyers agency contract with 6% of the purchase price going to them, either way it is very upsetting and now I wonder if other agencies try to do the same thing? But yes basically it does sound like double dipping to me, 6% when you purchase and 6% when you sell, although I am not exactly sure how they split it up....will not be using them anymore....
Dallas, TX · Member since 2013 · 4k+ posts · 744 votes
13y
If it was of off the MLS, you should have contacted the listing agent, and the listing agent will get 6% and who they split that is their business. Where did this buyer's agent come in the picture at?
Investor · Cincinnati, OH · Member since 2010 · 1k+ posts · 928 votes
13y
I would clarify (with the agent and broker) why they executed an agreement of this type with you. It is not standard with Keller Williams, or virtually any other broker. Is it because the sales price is so low, thus not providing adequate compensation for services rendered? Did the agreement call for 6% from the buyer regardless of the selling price of the property, or was there some sort of low-price clause that would essentially impact investors purchasing inexpensive properties?
Flipper/Rehabber · Easton, PA · Member since 2013 · 224 posts · 36 votes
13y
We contacted our agent and are waiting for them to respond....
Who does everyone else use for broker?
Our other closing costs seem higher because of the taxes that are higher here. we will probably get some of that back when we sell...I have to look at it again and then post it...
Flipper/Rehabber · Easton, PA · Member since 2013 · 224 posts · 36 votes
13y
Ok, we were able to talk to our agent and apparently it was a mix up on his part so we don't have to pay the extra 2700 that he had had down. So now the closing costs are a little over 2k which i am fine with. Thanks for all the input and wise words, you guys are great!!
Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
13y
Is that a new agent?
I don't think an experienced agent would have ever voiced it. They would have known that it's wrong, even if it was put on the wrong line or in the contract.