By Keith Kyle
Closing Costs – Who Generally Pays What In The Escrow Process
Keep in mind that the charts below are based on the standard allocation of costs in an escrow in Three Sixty. As with any detail of buying a home everything is negotiable including who pays what costs during the transaction. In addition not all of these costs exist in every transaction and many are dependent on the lender, escrow company and the details of the offer.
Although not in the charts below it is standard for the seller to pay the real estate commission (generally 5% in our area) for both the listing (seller’s) agent and the buyer’s agent.
Title Fees
| Name of cost | Customarily Charged By/ Who Pays | What is it? |
| Owner’s Title Policy | Title company / Seller cost | Fee for the title policy. Calculated using the sales price. Insures that the title is clean at close of escrow |
| Lender’s Title Policy | Title company / Buyer cost | Title policy issued to lender to cover the amount of the loan. Based on the loan amount. |
| Sub Escrow Fee | Title company / Buyer & Seller | Fee to administer the payoff of loans or property taxes of the seller and collection of funds from the new lender |
| Document Transfer Tax | LA County / Seller. There is also a city transfer tax in some cities but not in Hawthorne | Fee charged on all properties that transfer title based on sales price. $1.10 per thousand of sales price |
| Record Release/Reconveyance | LA County / Seller | Charge to record the release/reconveyance |
| Federal Express/Messanger Fees | Federal Express / Buyer & Seller | Charge to deliver all time sensitive documents and monies |
| Title/Wire Fee | Banking Instituion / Buyer & Seller | Charge to wire funds to or from escrow, seller, lenders, etc |
| Electronic Recording | County / to Buyer | Charge to electronically record the document |
| Record Grant Deed | County / To Buyer | Charge to record the grant deed |
| Record Trust Deed | County / To Buyer | Charge to record the trust deed. |
| Messenger | Messenger Service /Buyer and Seller | Charge to special messenger documents during the escrow: |
| Lender’s Endorsement | Title / Buyer | Charge for endorsements required by lender to cover “outside normal” risk circumstances |
Escrow Company Fees
| Name of Cost | Customarily Charged By/To: | What it is? |
| Escrow company fee | Escrow / Both buyer and seller each pays own | Covers liability assumed as well as standard processing costs. This varies but usually cost is somethung in the vicinity of $2.00 per thousand and a $200.00 base |
| Demand Fee | Escrow / Seller | Charge to request a statement & process involved in getting a payoff figureto escrow on the outstanding amount of the current loan. One demand fee per loan. |
| Process HOA Docs & Transfer Fee | Escrow / Seller | Fee for processing required to assign membership for HOA a& copying all governing documents |
| Document Fee | Escrow / Buyer | Covers the cost of all processing required to meet new lender requirements |
| Loan Tie-In Fee | Escrow / Buyer | Covers the cost of all processing required to meet new lender requirements |
| Federal Express | Federal Express /Buyer | For document packages to out of County Lenders. |
Lender & Loan Costs
| Name of Cost | Customarily Charged By/ To | What is it? |
| Origination Fee | Lender / Buyer | Charge for lending money at 1% of the loan amount |
| Documentation Preparation | Lender / Buyer | Paid to lender for preparation of final loan documents |
| Tax service | Tax Service / Buyer | Fee charged to buyer to set up property taxes with the state |
| Wire | Banking institution | Charge for the wiring of funds to title for closing |
| Underwriting | Lender / Buyer | Fee to direct lender for the process of approving |
| Tax impounds | Lender / Buyer | Collected to create an impound reserved account for the lender to pay property taxes twice a year |
| Prepaid Insurance | Lender / Buyer | Generally 1yr of hazard insurance collected for impound reserveaccount |
| Appraisal | Appraiser / Buyer | Paid directly to appraiser for appraisal of property |
| Credit Report | Lender: / Buyer | Paid to credit bureau for report containing 3 credit scores |
| Processing | Lender / Buyer | Paid to mortgage broker for processing loan package from application to closing |
Disbursements
| Name of Cost | Customarily Charged By / To | What is it? |
| HOA Transfer Fee | HOA Management / Seller but often negotiated | HOA or managemebt company fee to transfer ownership and handle new accounting set up |
| HOA Dues | HOA Management / Seller | Usually prorated and paid through day of closing |
| Fire Insurance | Insurance Agency / Buyer | 1 year prepaid premium for homeowners insurance |
| Notary | Notary / Buyer |
Payoffs
| Name of Cost | Customarily Charged By/ To | What is it? |
| Recording Fee | Existing Lender / Borrower | Charge for having reconveyance recorded by the county. |
| Statement forwarding fee | Existing Lender / Borrower | Charge for issuing a payoff statement |
Credits and Prorations
| Name of Cost | Customarily Charged By/ To | What is is? |
| HOA Dues | Seller /Buyer | Calculated from date of COA through month-end |
| County Property Taxes | Seller / Buyer | Calculated from the date of payoff through end of period paid for. |