Escrow Fee Question

M

melodypowell

New member
Quick question on escrow fees, we are in escrow right now, just received an estimate buyer's HUD and the escrow fee is as follows:

Settlement Agent Fee 4,075.00
Document Processing Fee 150.00
Delivery / Messenger Fee 60.00
Wire Fee 35.00

It does not include title insurance, recording fee or anything else, just the escrow agent fee. It seems rather high, last time when I bought a house in Irvine 5 years ago, the escrow fee was 1k on each side. Is this pretty standard nowadays?
 
melodypowell said:
Quick question on escrow fees, we are in escrow right now, just received an estimate buyer's HUD and the escrow fee is as follows:

Settlement Agent Fee 4,075.00
Document Processing Fee 150.00
Delivery / Messenger Fee 60.00
Wire Fee 35.00

It does not include title insurance, recording fee or anything else, just the escrow agent fee. It seems rather high, last time when I bought a house in Irvine 5 years ago, the escrow fee was 1k on each side. Is this pretty standard nowadays? It's a no loan purchase, there is barely any paperwork. (I know it probably doesn't matter)
Click to expand...

The escrow company that I use on my listing charges roughly .25% of the purchase to each side for the transaction fee (that's before the escrow fee discount I get for my clients).  What is the purchase price of the home?
 
WTTCHMN said:
melodypowell said:
Around 1.5
Click to expand...

$1.5 M all cash!

IHO will have to coin a new acronym - FMACB??

(Foreigner Married to American Cash Buyer)
Click to expand...

She's not a foreigner. If I recall correctly, in previous posts, she stated that she grew up in Irvine.

 
misme said:
WTTCHMN said:
melodypowell said:
Around 1.5
Click to expand...

$1.5 M all cash!

IHO will have to coin a new acronym - FMACB??

(Foreigner Married to American Cash Buyer)
Click to expand...

She's not a foreigner. If I recall correctly, in previous posts, she stated that she grew up in Irvine.
Click to expand...

Ok, BICBNIAGCB ??

(Born in China But Now I'm an American Goddammit Cash Buyer)
 
woodburyowner said:
Why is the escrow fee a % of the purchase amount?  Seems like another industry ripe for disruption..
Click to expand...

And it's not just the main fee, there's also processing fees, messenger/document handling fees, archiving fees, wire fees, etc.  Sounds like a big racket.
 
The truth is escrow and title fees can vary widely.  Friends are selling a home in Tustin Ranch and their per side escrow is $1,800.  House sales price is 60% of OP's but the amount of work the escrow officer performs is similar and the buyer of my friend's house is getting a loan.

Having spent 20 plus years on the commercial side of transactions, all I can say is that the escrow and title fees have always been more reasonable than on the single family side.  I wonder if that is because the sellers are in the business and are constantly solicited for business; which keeps pricing competitive.  For the past several sales, our company has been paying about $0.55-0.65 per $1,000 for title insurance and what OP is paying escrow would be appropriate for a $15mm transaction.  Six months ago Chicago Title charged for escrow $5,500 per side for a $35mm transaction.  As you can see, the escrow fee goes up for a higher sales price; but only marginally higher.  Hopefully this comparison gives some perspective on how high fees can be on the single family side.

Being that you are already working with this escrow officer, it's probably not advisable to change escrow just to save on fee unless you are unhappy with the escrow officer.  However, if you are able to get a couple of quotes that are significantly lower, you can approach the escrow officer and at least ask them to match the lower quotes.  Over the years, I've done that with greater than 50% success on the buy side where the seller insisted on using their title and escrow.  Perhaps your agent can help you here.
 
melodypowell said:
Around 1.5
Click to expand...
Based upon a $1.5m purchase price using a .25% for each side, your escrow fee would be approx. $3,750 (my escrow guy discounts the fee by 20% so his fee would be $3,000).  Unfortunately most all escrow companies will use a similar % of the purchase price to determine the escrow fee.  Has your agent spoken to the listing agent about asking to get the escrow fee reduced because the escrow fee does seem high?  Remember that it's very typical for the seller to select the escrow but don't kid yourself because it's really the agent that will pick the escrow company (also note that many of the larger brokerages have a sister escrow company so they automatically funnel all of the escrows their way).
 
bones said:
woodburyowner said:
Why is the escrow fee a % of the purchase amount?  Seems like another industry ripe for disruption..
Click to expand...

And it's not just the main fee, there's also processing fees, messenger/document handling fees, archiving fees, wire fees, etc.  Sounds like a big racket.
Click to expand...

It is a big racket, but just like with realtors....unless someone comes out with a better model to change things things will keep on keeping on.  How about we get some TI folks to open an escrow company with a more reasonable fee structure?  I'll send you guys over my listing business.  ;)
 
USCTrojanCPA said:
bones said:
woodburyowner said:
Why is the escrow fee a % of the purchase amount?  Seems like another industry ripe for disruption..
Click to expand...

And it's not just the main fee, there's also processing fees, messenger/document handling fees, archiving fees, wire fees, etc.  Sounds like a big racket.
Click to expand...

It is a big racket, but just like with realtors....unless someone comes out with a better model to change things things will keep on keeping on.  How about we get some TI folks to open an escrow company with a more reasonable fee structure?  I'll send you guys over my listing business.  ;)
Click to expand...

Mello is like that too. The higher the priced home (I know it's based on sq footage but it's really tied to the price of the home) the higher the mello.

No way it costs more to build roads, schools, etc in Irvine than lower priced areas (I'm not talking about close areas like Tustin) especially when you consider how many homes are getting charged.

Mello funds aren't even regulated.

But so long as there are buyers the racket goes on.
 
USCTrojanCPA said:
bones said:
woodburyowner said:
Why is the escrow fee a % of the purchase amount?  Seems like another industry ripe for disruption..
Click to expand...

And it's not just the main fee, there's also processing fees, messenger/document handling fees, archiving fees, wire fees, etc.  Sounds like a big racket.
Click to expand...

It is a big racket, but just like with realtors....unless someone comes out with a better model to change things things will keep on keeping on.  How about we get some TI folks to open an escrow company with a more reasonable fee structure?  I'll send you guys over my listing business.  ;)
Click to expand...

Talk Irvine Title Co.
We'll beat anyone's advertised price or your title insurance is freeeeee!
 
WTTCHMN said:
misme said:
WTTCHMN said:
melodypowell said:
Around 1.5
Click to expand...

$1.5 M all cash!

IHO will have to coin a new acronym - FMACB??

(Foreigner Married to American Cash Buyer)
Click to expand...

She's not a foreigner. If I recall correctly, in previous posts, she stated that she grew up in Irvine.
Click to expand...

Ok, BICBNIAGCB ??

(Born in China But Now I'm an American Goddammit Cash Buyer)
Click to expand...

BBB - Big Baller Buyer.

Homie already owns that acronym... he needs to have words with Lavar.
 
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