Many times I see borrowers / home buyers pay for items that are not necessarily needed and could have been avoided. So let’s talk about what is necessary.
First, it’s common place for your Realtor to suggest a closing company or closing attorney. Many Realtors have people in their circle of business that they are comfortable working with and who will get things done for them faster and more efficient in that developed relationship.
Second, caution is required if that closing company has a contractual business relationship or business affiliation agreement with the Agent’s Broker. If this does exist, chances are you are paying for closing fees that have been marked up to generate a kick back to the Real Estate Broker.
Third, Section 8 of RESPA states the Buyer has the choice of selecting the Title Company– closing agent. Not the seller or Realtors. However your offer to the seller may include that you request the seller to choose the closing company in exchange for the seller paying some of your closing cost, such as your title insurance.
Fourth, as the Borrower / Buyer you have the right to shop out a closing company that fits you. If you do not know any Real Estate attorneys or title companies, ask your Realtor for a list. Call a few and ask them for a draft HUD1. This will allow you to get an expectation of your closing expenses and compare pricing.
Fifth, Real estate agreements and disclosure statements: generally, these tend to have a real estate professional fee added in. Although this is the Real Estate Broker’s fee to cover office expenses, it is considered by the National Association of Realtors as a commission and there for is a negotiable expense. As of January 2014, you can expect most lenders to force the Realtors to drop this all together in order to meet the governments rule on Qualified Mortgage (QM).
Sixth, Home Inspections. Most often, your Realtor will suggest a home inspector, but ask them to give you information on a few different ones. Then, when calling to schedule your home inspection, ask them how much they charge for each type of inspection–including the wind mitigation report. There are people who do just wind mitigation reports, so ask your insurance agent for a list of them. You may find that some who only do wind mitigation reports will be as much as a $100 less than the home inspector sliding it in on you at the time of the home inspection.
Seventh, watch the time frames in your purchase and sale agreement, but do not allow a seller or Realtor to rush your inspections. Putting inspections, appraisals, surveys, water and septic testing, and other items in the proper sequence could save you hundreds of dollars. If you would like the best order for your mortgage loan circumstance, and type of purchase and sales agreement, please ask us at Solutions First Mortgage Inc.
Eighth, all too often, we see borrowers over spend or have items simply thrown at them. An elevation certificate for $275 when they could of received a copy of the recorded one at the county office for $10, is just one example. Taking the time to ask questions could save you hundreds of dollars for receiving the same service for a better price.
At Solutions First Mortgage we believe in delivering valued service not just a mortgage. Take the time to ask us questions.
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