Hidden Costs In Your Real Estate Transaction

Use this little check list to help you spot some of the most common places where your costs can go up dramatically.  Little extras that pile on and can really add up.

 

We all want to save money! Sure we do. We probably know where the best priced gas is in town and how to shop for a discount airfare when going to visit the family but Real Estate can be very confusing.

Mobile Notary Fees: Your closing officer will cheerfully tell you that they can send someone to you to sign and notarize documents. Great! But guess who pays for this service - you! Your schedule may make it worth it but if you can stop by the title or escrow office you can potentially save $100-$250 dollars. The reason for the broad range is because if you are getting a loan there are more documents to sign and the price goes up.

Termite Company Repairs: In many areas small repairs that are commonly called wood rot are bid by the termite company. Everyone is busy, everyone wants to close the sale so the seller typically signs this document and pays 3-5 times the amount it would cost to have a fascia board or a post on the patio replaced. Often a handyman is enough to do these jobs. Please note; I am not talking an actual termite problem here. That would have to be treated properly by the termite company.

Escrow Fees: These can vary wildly. I have seen differences of $450 for the same transaction. As Realtors we have trusted partners that we refer you to. However, over time we can lose sight of what the fees are. Ask your Realtor to get three quotes for escrow services. If they want to use their preferred escrow provider ask them to match the best price.

Title Fees: In many states these charges are set by the state insurance commissioner and do not really vary. However, it would not hurt to get a quote and also look carefully for any surplus charge beyond the actual title policy fee. Buyers, if you are getting a loan you will have to buy what is called a lenders title policy for your lender this is in addition to the title policy on the home which the seller typically pays for. Be sure you get quotes on that. One note here, any discounted extended to one party must also be equally extended to the other party.

Broker Fees: Buyers and sellers need to be aware of add on charges from the brokerages involved in the transaction. More and more often I am seeing some brokerages are adding a fee on top of any commission they are getting. Typically called a transaction fee or a admin fee these are pure junk and if you insist I am sure they will get removed. If not you will have to decide if that brokers services are worth that extra fee to you.

Home Inspections:  A good home inspector can save you a fortune! I would simply ask your RealtorRead Our article on how to ask the best questions in your home inspection.

if they have several they recommend or just one. Ask what sort of report you will get and what the general fees in the area are. Currently in my area inspection fees, for essentially the same inspection can vary by $125. Some inspectors provide very detailed reports with heavy emphasis on photos others just a general overview with few pictures. Be sure you get the report you need for the type of property you are buying.

State Requirements: Many states have specific forms or reports they require to be part of a real estate transaction. Here in California there is a pack of Hazard reports the seller must provide the buyer. There are multiple companies that sell these reports and prices differ by as much $35 for the exact same reports.

Your general rule of thumb is to ask questions. Anytime you as a buyer or seller are asked to pay for something be sure that you know what it is, are okay with it and know what options are out there for you. Don't let the hidden costs in your Real Estate transaction get out of control.

For more information on Real Estate in Southern California Please visit our website at www.PSagent.com or call us anytime at 760-408-5300.

Title Binder Policy Can Save You Money

In the Palm Springs market place a typical expense of a seller is to pay for the title insurance policy for the buyer when they sell their home. However, if the seller had purchased a Title Binder policy before closing escrow their escrow (back when they purchased the home) the seller can now realize a substantial savings upon resale.

How does this work?

When you are the buyer getting ready to close escrow (finalize the sale) on your new home be sure to request that you be issued a Title Binder policy.The seller you are buying your home from is actually paying the cost of your Title Policy. However, you would request and pay for the Title Binder policy

(typically a few hundred dollars or less - 15% of the cost of the title policy) yourself.

Then three years or less down the road when you go to resell your home you tell your agent that you have a binder policy for the title company. This gives you to a substantial discount on the policy you are going to have to provide for your buyer. Your only fee will be on the difference between what you paid and what your buyer is now paying. Again typically a few hundred dollars versus the thousand plus that you would otherwise be paying.

The three year restriction may not work for you if you are planning on buying and holding the property. Some title companies will allow you to extend it to four years for a small extra premium. Despite this is if you are buying for the short term, know you will be transferred, up-size or downsize or even if you are flipping houses for profit
Title Binder Policies make lots of sense.

Small savings like these may not be dramatic but can really add up overtime and maximize the value of your home ownership experience.