Perry Wellington Realty, LLC
I pass by gas stations when I know I can save 4 cents down the road.
So do you.
I avoid ATM machines that charge a surcharge.
So do you.
So let’s talk about junk fees. What in the world is a junk fee? You suspect already that it is someone sticking a charge into your real estate transaction or overcharging you.
Most folks don’t even know where to begin to look for these fees. We are here to help. We are here to explain.
Those who charge these fees are not going to like the bright lights on these practices.
Let’s talk about the closing. This is the place where you give the seller cash (or the bank does for you) and you get the keys. Happy time! It has been a long road getting to this happy place so you just don’t notice a couple of things that you are getting charged for.
In the closing process you are probably getting title insurance. The company providing the title insurance is paid to do the title search/abstract of title and prepare the documents for closing. They sell you a ‘title policy’ for the benefit of your lender and you in case there is a claim against the property. Simple enough. But it doesn’t end there. The title company then decides to ‘add on’ some charges. These might be notary fees, wire fees, courier fees and some even charge a ‘closing fee’.
On a $200,000 home the title insurance is going to be $1400. This rate is set by law. The title company is likely going to keep over $1100 of that amount. Yet many title companies add on charges like notary fees of $25-50, wire fees of $20-25 and courier fees of $30-40. The highest one you will see is the ‘closing fee’. These can total $125-350 depending on the circumstance. Most title underwriters only allow their agents to charge a closing fee if the closing occurs outside of the office or outside of normal business hours. Some don’t as you see in the example above. Many of us have been at closings IN THE OFFICE and saw the buyer having to pay for a closing fee.
I get to see HUD-1 closing statements from all types of lenders and deals. I can tell you there are folks out there charging these junk fees on a regular basis.
Who is watching out for you? Is your agent? If they aren’t you need to get a new agent.
You might say, ‘that’s really only a few hundred dollars, which isn’t a lot considering the price of the home’. To that I say, aren’t you still driving past the gas station to save 4 cents?
Full disclosure – I used to own a title company. I sold it. I now have started another title company – Precision Settlement Group, LLC and I have declared it to be ‘Junk Fee Free‘.
That’s right. No junk fees. No wire fees, no notary fees and certainly no closing fee when you close in one of our many offices.
Adam Conrad Jr., a licensed broker in PA, Florida and MD, is the broker/owner of Perry Wellington Realty, a PA state-wide 8 location real estate brokerage. Adam is the Director of Education for Advance Academy, a real estate school he owns. The CEO and owner of Circuit Mortgage, LLC, co-owner of Precision Settlement Group, LLC, Adam is a part time lecturer in business and entrepreneurship at Pennsylvania State University, Mount Aloysius College and Saint Francis University. Perry Wellington Realty has a TV Show on CBS affiliate WTAJ-HD weekly on Fridays at 430pm and Adam is on the radio Thursdays from 11-1145am on WRTA 1240 in Altoona to answer live real estate questions. You can reach him via email here or at Advance Academy.
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