Guide to Closing Costs

Closing on your home can be stressful, but you can minimize the stress by knowing what to expect. Plus, it helps to work with good people, so choose your Realtor®, Mortgage Lender, and Title company with care. We encourage you to refer to Bella Casa’s list of Business Referrals. Also see a previous post explaining What Happens in Escrow.

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THE BUYER NORMALLY PAYS FOR:

• One-half of the escrow fee (according to contract)
• Lender’s title policy premiums (ALTA)
• Document preparation (if applicable)
• Tax pro-ration (from date of acquisition)
• Recording charges for all documents in buyer’s names
• Fire insurance premium for first year
• Home Warranty (according to contract)
• Inspection fees (according to contract): roofing, property, geologial, termite, etc.
• All new loan charges (except those required by lender for seller to pay)
• Interim interest on new loan from date of funding to first payment date

THE SELLER NORMALLY PAYS FOR:

• One-half of the escrow fee (according to contract)
• Work orders such as termite inspection and work (according to contract)
• Owner’s title insurance premiums
• Real estate commission
• Any judgments, tax liens, etc. against the seller
• Any unpaid Homeowner Association dues
• Home Warranty (according to contract)
• Any bonds or assessments (according to contract)
• Any loan fees required by buyer’s lender (according to contract)
• Recording charges to clear all documents of record against seller
• Payoff of all loans in seller’s name (or existing loan balance if being assumed by buyer)
• Interest accrued to lender being paid off, reconveyance fees and any prepayment penalties

Article Source: Ticor Title 503-472-6101

829 N. Hwy 99W, McMinnville, OR 97128

What Happens in Escrow?

WHAT IS ESCROW AND WHY IS IT NEEDED?

Escrow is an arrangement in which a disinterested third party (an escrow holder), holds legal documents and disburses funds on behalf of a buyer and seller, and distributes them according to the buyer and seller’s instructions.

People buying and selling real estate often open escrow for their protection and convenience. The buyer can instruct the escrow holder to disburse the purchase price only upon the satisfaction of certain prerequisites and conditions. The seller can instruct the escrow holder to retain possession of the deed to the buyer until the seller’s requirements, including receipt of the purchase price, are met. Both rely on the escrow holder to faithfully carry out their mutually consistent instructions relating to the transaction and to advise them if any of their instructions are not mutually consistent or cannot be carried out.

Escrow is convenient for the buyer and seller because both can move forward separately but simultaneously in providing inspections, reports, loan commitments, funds, deeds, and many other items, using the escrow holder as the central deposit point. If the instructions from all parties to escrow are clearly drafted, fully detailed and mutually consistent, the escrow holder can take many actions without further consultation. This saves much time and facilitates a smooth closing of the transaction. Continue reading “What Happens in Escrow?”