Who pays for what?

A major question in every escrow is: "Who pays for what?" The answers vary by county ordinances and standard practices. What is listed below are “customary” practices. All fees charged are governed by terms of the sales contract and other written escrow instructions. Note: on some FHA, VA or other government-backed loans, the buyer will pay some fees that governmental regulations will not allow you to pay.
Seller's Generally Pay: Real estate commission Document transfer tax ($1.10 per $1,000 of sales price) Notary fees Property tax proration (to date of acquisition) Special delivery/courier fees, if required Document preparation fees Document recording charges Homeowner’s association statement fee and prorata dues Home warranty (according to contract) Work/repairs required (according to contract) Matters of record against the property or seller (loans, tax liens, judgments, etc.) and fees required to clear them (statement fees, reconveyance/trustee fees and prepayment penalties) Bonds and assessments (according to contract)	Buyer's Generally Pay: Title insurance policy premiums (lender’s and buyer's) Escrow fees Notary fees Property tax proration (from acquisition date) Special delivery/courier fees, if required Document preparation fees Document recording charges Homeowner’s association transfer fee and prorata dues City costs Home warranty (according to contract) Inspection fees (according to contract) Matters of record against the buyer including tax liens, judgments and fees required to clear them Fire insurance premium for the first year Assumption/change of records fees if the buyer is taking over an existing loan Lender’s new loan charges Interest on new loan from date of funding to 30 days prior to the first payment Other prorations (rents, insurance etc.) if applicable

What is Escrow?

Escrow is the process that buyers and sellers of homes use to complete the monetary and legal details of a sale. A neutral third party manages the escrow, called an “Escrow Officer,” who generally works for a title company. “Title” is the proof of ownership of a property. The title company ensures that all terms of the contract are adhered to before the sale is complete and money changes hands.

In order to successfully bring an escrow to close, the title company will:

• Obtain a title report to ensure that the seller has the right to transfer ownership (title) to the buyer
• Ensure that any previous loans on the property have been paid off
• Acquire necessary loan and insurance documents
• Confirm that necessary inspection reports are on file
• Arrange for the buyer to sign all necessary paperwork to complete the close of escrow

When these details are complete, the Escrow Officer requests the funds to be released and instructs the title department to record the transaction at the County Recorder's Office, thereby closing escrow.