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Deed Stamps |
Documentary
Stamp Tax levied on any deed transferred to a new owner through sale
or estate proceedings. Deed stamps are charged at 70.t per hundred
dollars in value or $7 per thousand dollars in value. A $100,000 sale
= $700 in deed stamp tax. If the Seller refuses to pay deed stamps the
property is then encumbered with a tax lien and escrow cannot be closed
until the lien is satisfied. |
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Title Insurance Policy |
This
is the policy provided by the current owner assuring the Buyer that
there are no clouds or title issues that encumber the property. All
easements, uses, etc have been properly recorded along with all transfers
of ownership. All signatures, notaries, licenses, etc. were in effect
and current when title was conveyed to the current owner. This is a
Sellers "proof' that the property is in good order and can be conveyed
to the new owner. |
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Title Search & Exam Fee |
In an assumption
the existing title policy can be conveyed with the property with a title
search and exam of the current conditions. As long as there were no discrepancies, the
existing title policy remains in effect. |
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Title Insurance Endorsements |
There
are three endorsements required by the lender on all new mortgages that
can be paid by either party. The endorsements are a loan requirement
and are most often charged to the Buyer. This item can be argued to
be a Seller's cost, as a fee title policy (owner's),
cannot be issued without the required endorsements. |
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Closing Attorney/
Settlement Fee |
This
is usually a cost assessed to the Seller, as it is a function of closing
of escrow. When the Seller purchases owner's title insurance through
a closing attorney the "attorney fee" for "closing"
is normally waived as the attorney's make their fee off of the title
insurance premium. |
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Transaction/
Administrative Fee |
A
fee assessed to the Buyer or Seller by the real estate company that
is their representative. These fees are charged to offset the cost of
keeping records for long time periods as outlined by the Florida Real
Estate Commission and the Florida Legislator in Chapter 475. |
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Real Estate Brokerage Fee |
Real
estate commission or flat fee outlined in the Listing Agreement to be
'laid by the Seller to the real estate broker for finding a Buyer that
is qualified and willing to purchase said property. |
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Mortgage Discount Points |
A
function of borrowing funds. When there is heavy movement in the money
market that makes the interest rate volatile, the investors may require
some of their earnings up front to offset future risk of money loaned
out at a lower rate than the current market is
charging. This item appears in both expense layouts as both parties
can participate in the payment of discount points |
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Rec. Satisfaction of Mortgage |
seller must record a satisfaction of mortgage
showing that the existing mortgage is paid in full and no longer encumbers
the property. Satisfaction is recorded through the local county office
and must be in place prior to the issuance of a new mortgage note. |
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Wood Destroying Organism Repairs |
This
cost is associated with any repairs found in a Wood Destroying Organism
inspection
The Seller
is only obligated to repair up to 1% of the purchase price unless otherwise
negotiated. Any repairs exceeding
the 1% are to be paid by the buyer, should the buyer wish to proceed. A clear WDO report is required by most lenders
in order to process the loan. All
repairs must be made and re-inspected prior to closing. |
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Other Repairs |
This
cost is associated with any items that were found deficient by the Buyer
on their initial visit, subsequent personal inspection under the terms
and conditions of the contract or a professional home inspection. If
the dollar figure in this item is less than that required to repair
or replace items outlined in a written list provided by the Buyer to
the Seller, the Seller is only obligated to the dollar amount shown.
Negotiations must commence immediately between the parties on how the
balance of the repairs will be accounted for. A credit can be issued
to the Buyer by the Seller in the form of a price reduction in a like
amount or the Buyer can agree to be responsible for all repair costs
above the dollar figure outlined for this item. This item has nothing
to do with WDO or Appraisal repairs that effect property value. |
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Wood Destroying Organism Report |
In
a VA sale the Buyer (veteran) is not allowed to pay for the WDO report
by law; the Seller must pay for it. This item is sometimes assessed
to the Seller by scratching through For VA Sale Only. This is a Buyers
cost as it is a requirement of the lender that the Buyer show the property
to be free of wood destroying organisms to reduce the investor’s risk
of losing his investment. It can also be argued that it is a Seller's
cost as one of the "proofs" that the property is "clear"
of wood destroying organisms and worthy of the Buyer's consideration.
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Appraisal Fee |
This
is a Buyer expense required by the lender and investor. They will loan
no more money
than the home will appraise for although the Buyer may pay more for
the home if they desire. The Buyer must make up the difference between
appraised value and purchase price. It can be argued that this can also
be a Seller's cost as a "proof' that the property has the value
set forth in the Purchase and Sale Agreement and Deposit Receipt. |
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Survey |
The
lender requires a new survey to show that there are no violations of
set backs, easements, flood zones, etc. that would diminish the properties
value. Often assessed to the Seller as one of the "proofs"
to the new lender that the property is in good order prior to the transfer
of title and issuance of a new mortgage. |
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Flood Certification |
A
certification issued by the surveyor that the property has been surveyed
to be above or out of elevations that require flood insurance. A requirement
of the lender to reduce risk of collateral loss (house) due to flood
hazard |
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Tax Service |
A
one-time charge to set up an account that will distribute tax revenues
to the proper taxing authorities when they are due. Most often a requirement
of the lender to assure the investor that taxes
will be paid from escrowed funds provided monthly by the Buyer so that
the property will not be lost due to unpaid taxes or uninsured hazards.
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Tax Proration |
Since your
property taxes are paid at the end of the year, you must pay your portion
of the property taxes to the buyer since they will be responsible for
paying them at the end of the year.
If your mortgage company escrows your taxes they will either
reimburse you after closing, or credit the amount in your escrow account
to your balance due. |
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Home Warranty |
An
insurance policy that can be paid for by either Buyer or Seller that
provides coverage on most of the operating systems in a home such as
appliances, plumbing, heating and cooling units, etc. |
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Underwriting Fee |
Charged
as an administrative fee by lenders that do not have underwriters on
staff. Thus requiring them to
send out the loan packages to be underwritten. Can be paid by either
party. |
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Doc Prep Fee |
Doc
Prep Fee can also be assessed to the seller for preparation of current
owner's documents to further the sale and close of escrow. This item
should be checked for both parties so that costs can be fairly assessed
for work done to further both sides of the transaction. |
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Courier Fees |
Normally
a function of acquiring the mortgage. Many lenders do not have the "package"
ready for closing until the last minute due to their own criteria and
the closing package is couriered to the closing agent. The closing agent
may also have to courier funds, approvals, title disclosures, etc. to
local courthouses or other parties involved in the sale. The closing
agent makes every effort to charge the courier fees to the party receiving
the benefit of the service. |
