We Rebranded! InspectHOA is now Rexera

Request Demo

10 Common Closing Costs Escrow Deals with at Closings

Title & Escrow,
Published: Mar 02, 2023
Last Edited: Mar 18, 2024
by Editorial team
blog

As you probably know (and have to regularly explain to your clients), closing costs are the fees and expenses associated with the purchase or sale of the property that is payable at the time of closing. These costs include a variety of fees and are negotiated between the seller and the buyer. Closing costs can be confusing for both buyers and sellers. 

To explain closing costs to your clients, provide them with a breakdown of the estimated costs for their specific transaction. Here is a list of the top 10 costs that are collected at closing to help your clients understand what fees they are responsible for and why they need to pay them.  

1. Escrow fee

The escrow fee is a part of closing costs and it is the fee that the title or escrow company charges to handle the escrow for managing and allocating the funds placed in escrow at closing.

2. Payoff

A payoff is a statement that tells us how much is owed for the mortgage or lien. It is built into a Payoff/Demand statement, and the seller has to pay to remove those encumbrances. Depending on how the letter is requested, there might be a fee for the document generation as well.

3. Title insurance

An Owner’s policy, or Owner’s Policy of Title Insurance, protects the buyer’s interest in the home during and after the home purchase. 

And then if the buyer takes a loan, the lender will often require, as a condition of the loan, that the buyer gets a Lender’s Policy, or Lender’s Title Insurance, to protect the lender’s security interests in the property.

4. Homeowners insurance premium

Homeowners insurance is the money you pay to your insurance company to keep your policy active and your property protected against any issues.

5. Mortgage/loan origination

The mortgage origination fee is the upfront fee owed to the lender for processing a loan. It covers a variety of things such as an application fee, processing, and underwriting of the loan.

6. Property Appraisal Fee

The Appraiser will charge a fee for assessing the fair market value of the property. The value is used to determine the property’s loan-to-value (LTV) ratio.

7. Property taxes

Escrow prorates the taxes, dividing the taxes and other credits between the seller and the buyer. The seller pays their part of the bill up until the closing, including the taxes that have not been issued yet. And the buyer pays from the close of escrow and beyond. 

8. Recording fees

To transfer ownership, escrow has to record legal ownership transfer documents and different kinds of deeds. Escrow prepares those documents and the recorder’s office charges fees for the service. 

When you record a deed, the county will require that you pay a transfer fee. Charged by the state or a local government, the transfer tax fee is assessed as a percentage of the sale price.

9. Home inspection & survey fees 

Home inspection fees are paid to a certified home inspector to assess the property’s condition. Lenders might require the inspector to confirm the property is in good condition.

For example, in California, closing parties have to inspect the toilets, and make sure they’re up to code. To get that explicit sign-off, there has to be an inspection by the city. Typically the seller will have to pay for those home inspection fees, but it’s up for negotiation.

The mortgage survey identifies the major buildings on the property, such as the house, garage, etc. And whether it intrudes on any neighboring properties or vice versa.

A Lender may often require a survey because they will want a certain coverage on the lender’s policy that covers things that a survey might disclose. And a title insurance company will require that the parties get a survey to provide that coverage.

10. Home warranty

A home warranty protects the homeowner from major financial bills due to failure of certain appliances and systems.

——–

There are many other closing costs that might appear at the home closing, such as HOA fees. Try to educate your clients about what closing costs are and who is responsible for paying them. Hopefully, this checklist helps you establish a more transparent process with your client.

tw fb link tg whatsappp

Rexera in the News

n1 n1 n1 n1 n1 n1 n1 n1
Proud members of
p1 p1 p1 p1 p1 p1 p1 p1 p1
What our clients say about us?
rev1
Katie Zorn, Ambassador, Hankin & Pack
linked website
I couldn't do my job without you
You all rock! Seriously. I do see all the hard work you guys do. This job isn't easy. I couldn't do my job without you guys so I mean it when I say YOU ROCK!
Katie Zorn, Ambassador, Hankin & Pack
rev1
Brad Honn, Senior Director of Escrow and Title Operations, Homeward
linked website
Worry-free closings
“As we all know, HOA issues can really blow up and cause a lot of problems for closing. So it helps us all sleep better knowing that there is not going to be a problem, or anything we forgot on the order, or an update that we forgot to complete before closing the transaction. Because we have a great partner Rexera (formerly InspectHOA), making sure that those things don’t happen to us.”
Brad Honn, Senior Director of Escrow and Title Operations, Homeward
rev1
Kacie McAteer, Vice President, Ideal Title Agency
linked website
They always go the extra mile
"Rexera (formerly InspectHOA) is simply above the rest when it comes to our HOA needs. Their portal is perfect, their communication is constant, and they always go the extra mile in order to meet our deadlines and impress our customers. I would highly recommend them to everyone in the title insurance industry. Thank you Rexera for all that you do!"
Kacie McAteer, Vice President, Ideal Title Agency
rev1
Lori, Escrow Support Supervisor
A huge win for us
"Your team discovered the lien and let us know so we were able to get the payoff statement. We were also able to revisit the research and find the recorded lien.

This is a huge win for us – so THANK YOU for all you do!"
Lori, Escrow Support Supervisor
rev1
Diana Casella, Ideal Title
website
A vendor that cares
"We’ve only been working with you all for a little while, but so far my team is singing nothing but praise and relief at finally having a Vendor that cares about these files as much as we do. "
Diana Casella, Ideal Title
rev1
Michelle Rose, Partner, Closing Day Settlements
linked website
Number #1 for efficiency
"I highly Recommend Marina Hubenova and sending all orders to Rexera (formerly InspectHOA). I love sending all my orders through their client portal or in Qualia. They are number #1 with efficiency and detailed reports. I never think twice on placing my orders with them. "
Michelle Rose, Partner, Closing Day Settlements
rev1
Shawna Hernandez, Director of Escrow Operations, Endpoint
linked website
A partner for innovation
"We are constantly tweaking and refining our processes, so we needed a reliable partner that would go along this journey with us. And Rexera (formerly InspectHOA) is exactly that."
Shawna Hernandez, Director of Escrow Operations, Endpoint
rev1
Cristina Sadler, Escrow Officer, TransCounty
linked website
A way to take back control
“I was worried the job wouldn’t get done, but it always gets done! It’s worth it; it’s beyond worth it!"
Cristina Sadler, Escrow Officer, TransCounty
rev1
Scott Young, EasyKnock
linked website
A solution to a historical problem
"Rexera (formerly InspectHOA) has been an instrumental partner in mitigating risk and creating efficiencies in our acquisition process. They are the solution to a historical problem that title companies and other vendors face in every transaction."
Scott Young, EasyKnock
You will hear from us soon








    You will hear from us soon