Posted by Donna LaBelle on 11/6/08 8:31pm
Msg #269170

I just spoke to the borrower

and he doesn't want to sign just yet because all of a sudden he is being told that he has to pay for the sellers closing costs He said that amtrust is the bank ( its a bank owned property) and amtrust gave him one figure for closing costs but Ticor is who expects him to pay the sellers closing costs- an additional large chunk of money. Haven't heard of this happening before but there is something new every day

Reply by Teresa/FL on 11/6/08 8:38pm
Msg #269171

The buyer/borrower should check the terms of the contract he

signed when he offered to purchase the property.

It should specificy who pays the closing costs.

It is not customary for the buyer to pay the seller's closing costs, but since this is a REO property, maybe the contract terms were written to benefit the seller.

Reply by GA/Atty on 11/6/08 9:01pm
Msg #269173

What closing costs would the seller even have? n/m

Reply by Linda_H/FL on 11/6/08 9:12pm
Msg #269175

Re: What closing costs would the seller even have?

Commission (if a realtor involved); transfer taxes, if any; recording satisfaction of mortgage; bring any water and sewer charges current;

Just off the top of my head.

Reply by Linda_H/FL on 11/6/08 9:13pm
Msg #269176

Oh..and in FL

Seller pays title insurance premium for an Owner's Policy...not sure if it's like that in CA...

Reply by Teresa/FL on 11/6/08 9:56pm
Msg #269177

Re: What closing costs would the seller even have?

And current year county property taxes (prorated between seller and buyer), in addition to what Linda has already listed.

Bottom line is that the sales contract should indicate who pays what. The title company prepares the HUD according to sales contract and the lender's instructions.

It appears that this buyer was suprised by a difference in what his GFE showed and what the actual cash to close # is. His loan officer/broker and real estate agent should be able to explain the difference in the two figures to him.

Reply by Pat/IL on 11/6/08 10:20pm
Msg #269179

Re: What closing costs would the seller even have?

It really baffles me that more people don't just hire an attorney to represent them in a real estate transaction. At least to approve the contract and HUD and to look over the loan documentation.

I would not rely on my real estate agent or my mortgage broker to explain or advise on those matters. They have their own interests to tend to. An experienced real estate lawyer would be representing the interests of the buyer, and should be aware of the customary division of costs for the locale.

I have purchased two houses and have been in the title business since the 1980s and would still not enter into a real estate deal without representation. I would say despite my experience, but it is more likely because of what I have learned.

Reply by Linda_H/FL on 11/6/08 10:24pm
Msg #269180

I agree Pat

especially when buying a property out of foreclosure or an REO property (which was obtained that way) - too many issues in the property's past that can come back to bite you without proper research. MHO

Reply by Teresa/FL on 11/6/08 11:00pm
Msg #269189

I agree, also

Especially when buying a REO property.

Too many buyers rely on their loan and real estate agents for advice when they might be better off with an attorney at least reviewing the documents. On the other hand, I have been at closings where an attorney sat in and reviewed the documents as they were presented and had no comments or questioned items that were clearly included in the sales contract as the responsibility of one party or the other.

Reply by GA/Atty on 11/6/08 10:38pm
Msg #269185

None of those items are considered closing costs here -

but that's basically just tradition. I remember now how much the term varies in meaning from place to place.

Reply by Linda_H/FL on 11/6/08 10:41pm
Msg #269186

Okay...now I'm curious

what DO you consider Seller's closing costs?

Reply by GA/Atty on 11/6/08 11:06pm
Msg #269190

Actually, now that I think about it, we don't even use the

term "Seller's closing costs" here.

The standard contract simply refers to closing costs - who pays them is a matter of what the contract says.


Generally closing costs include lender's fees and other fees associated with the closing (appraisal, flood cert, attorney's fee, lender's title insurance policy, etc etc). They do not include prorated tax or utilities or real estate commissions.

It used to be that seller's generally paid for transfer tax and a termite or structural letter if the lender required it. These days, however, the standard contract calls for the buyer to pay the transfer tax and most lenders no longer require the pest inspection.

So generally the contract says "Buyer shall pay all closing costs, but seller shall contribute the sum of $ XXX to be used at buyers discretion to pay for closing costs, insurance premiums and any other prepaid items required by lender". Or something like that.

I know in other parts of Georgia it is customary for sellers to pay a fee for "deed preparation" for the warranty deed, but not in my area.

Reply by PAW on 11/7/08 6:30am
Msg #269202

From my HUD prep guide

The general consensus of many closing agents is that anything listed on the 2nd page of the HUD-1 (Settlement Charges) is commonly referred to as "closing costs" and is carried over to line 103 (Settlement Charges to Buyer/Borrower - Line 1400) and line 502 (Settlement Charges to Seller - Line 1400).

Reply by GA/Atty on 11/7/08 12:01pm
Msg #269222

I refer to that as "settlement charges" - which includes

closings costs but may include other items as well.

Reply by dickb/wi on 11/7/08 1:28pm
Msg #269227

and back taxes--title co closing costs--elec if municiple... n/m

Reply by BobbiCT on 11/7/08 7:21am
Msg #269204

Returning to moldy, oldy days ...

From a CT perspective:

Quite common in past "bad" times that purchaser agrees to pay "seller's closing costs," which are specificially defined by the local County Bar Assoc. Closing Customs or contract. Particularly foreclosures and tax sales; i.e., "seller" wants to minimize its loss and see what its attorney can negotiate to push onto purchaser's costs. Also, the seller "costs" are always estimates until the "work is done or adjustment made", which is when the seller's attorney or escrow company crunches the final numbers. For example, CT tradition is seller pays for deed and conveyance tax form preparation plus local & state conveyance taxes (calculated on sale price [or if State Tax Dept. objects and audits "value" of the real property, which can be an interesting seller's lawyer and appraiser battle two months after sale when the seller gets a bill for additional conveyance taxes owed to the State and Town - same issue in New York state]). The seller could negotiate that purchaser is to pick up legal fee of seller's attorney preparing deed and tax forms and local conveyance tax; however, seller will pay cost of state conveyance tax (which is higher than local). Seller could negotiate that purchaser pays cost of seller's recording fees, outstanding local taxes or prior to sale common charges and water and sewer use; i.e., instead of adjusting at closing.

To ancient me in CT, not the least unusual. Foreclosures, bank sales, tax sales and "deals" are when the purchaser needs to read that contract VERY carefully. In CT, it would be the purchaser's attorney reviewing the contact In Addition To the local "closing customs." Great example of a difference; it is the "closing custom" in one Town that unless it is specifically stated in the contract, the purchaser assumes the existing sewer lien (can be $XX,XXX) while in other counties the seller is responsible to pay the lien in full upon sale. GA Attorney - gotta love the law, the written contract and "local Bar Association customs." Out-of-County purchaser attorney, or out-of-state escrow company, who doesn't ask about local closing customs or definitions loses against local attorney representing seller! Good business for the local guy.

Reply by MikeC/NY on 11/6/08 11:16pm
Msg #269192

This is actually fairly common with bank-owned property, at least here in NY. The listing should have included that information if the Realtor who listed it was doing his/her job properly. That requirement comes from the bank, not the TC - I''m confused about why the bank is saying one thing and the title company is saying something else.

Reply by Pat/IL on 11/7/08 12:29am
Msg #269196

"I''m confused about why the bank is saying one thing and the title company is saying something else."

Mike, as I'm sure you know, and as has been suggested above, the title company makes no demands other than items necessary to insure title. Otherwise, the title company follows instructions.

Reply by GF_CA on 11/7/08 9:57pm
Msg #269267

If he signed the REO addendum he doesn't have any choice, unless he want loose his deposit. In CA seller pay:
50% Escrow Fee
50% Title Insurance Policy
Notary Fee
Transfer tax
Property tax
HOA (if applicable)
NHD report
And…Broker commission.
Of course this in a normal transaction but, with those REO company every thing is different.