RealtyPin.com's Top Ways to Save on Closing Costs
NEW YORK, Jan. 31, 2013 /PRNewswire-iReach/ -- Buying a home is an expensive proposition. Aside from the actual price of the home there are many ancillary costs that are attached to that purchase. You will more than likely have fees to a mortgage lender, appraiser, surveyor, home inspector, etc. You will also have fees paid to a title or escrow company which facilitates the transfer of the funds between yourself and the seller and records all the documents transferring title to you. While it may seem like these fees are written in stone, almost all of them are negotiable and knowing which ones are can save you hundreds if not thousands of dollars on your purchase. Here are some common title fees you can negotiate.
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1. Settlement Fee. This is more than likely the largest negotiable fee you will be charged. It is what the title or escrow company charges you for performing their services. There are several ways to save money on this fee. The first way is to have it written into your contract that the seller chooses the title company and is responsible for all fees associated with the transfer of title. This means any fees the title company charges that are not associated with your mortgage (such as mortgage taxes, mortgage title insurance, or recording fees) would be paid by the seller. This is by far the easiest way to avoid paying any title fees and most sellers will agree to do so in exchange for being able to work with a title company either they or their real estate agent are familiar with.
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The other way to save money on the settlement fee is to contact the title company and negotiate the fee with them. Unlike other fees charged to you, the settlement fee is a completely arbitrary amount charged by the title company. You can contact five different title companies and ask them what they charge for a settlement fee and be told five different amounts. This fee can range from $100 to $1000 or more. Contact the title company and tell them you think the fee is too high and want it reduced or you will consider choosing another company. In all likelihood they will agree to modify the fee because they want to keep the transaction.
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2. Attorney Fee. Some title companies include this in the settlement fee and others leave it as a separate charge. The attorney fee is what the title companies in house attorney charges to review the title commitment or abstract as well as all of the closing documents. However most states and title underwriters consider this to be part of the title companies job and do not allow attorneys to charge a separate fee for this service. The attorney must do something above and beyond to collect this fee such as negotiating a lien on title or preparing a specialized document for closing. Still many title companies will include this fee as a matter of course on all their closings. If you are charged an attorney fee contact the title company and ask them what it is for. If they can not give you a proper answer then ask for the fee to be removed. Even if they do have a response ask for the fee to be lowered.
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3. Owner's Title Insurance. When you purchase a home with mortgage funds there are two title policies that will be issued. One is to protect your lender, the other is to protect yourself from title mistakes. Title companies are regulated by the state as to how much they can charge for the insurance fee to the lender. However they have discretion in deciding how much of a co-insurance fee to charge you. This can be anywhere from $25 to $500 or more depending on the price of the home you are buying. If this co-insurance fee seems high to you then contact the title company and ask them to lower it.
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Whenever you are negotiating with a title company over their fees you need to be firm in your requests and realize that you have the upper hand in these negotiations. The title company does not want to lose the business and therefore will do their best to accommodate your requests.
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