A title clerk recently told me about a large real estate company who, at closing, tried to sneak in a $199 fee to their buyer for “processing” fees. The buyer’s attorney refused to have it paid, and had the charge removed from the buyer’s expenses. I have been told of other similar stories where buyers get surprised at closing with a similar nominal processing fee, and it goes rather unnoticed, especially when compared to the size of other closing fees. Why would a real estate company do this? Heck, $199 doesn’t seem like alot. But when you multiply 5,000 annual buyer closings x $199, it’s a million dollars to their bottom line, potentially all “new found” profit. Wow. That’s why they do it.
My suggestion for all buyers and sellers is:
1. Ask your agent to disclose all fees, in writing. Email is great for this!
2. Get a copy of the settlement statement the day before closing. This statement outlines all charges.
3. Re-examine the statement at closing, as sometimes adjustments are made just before closing. This statement is also referred to as the HUD-1 Statement.
Other fees to look for are mortgage company fees. I have personally witnessed unscrupulous mortgage companies sneak in extra fees. Question everything you do not understand. Closing day can be overwhelming on many levels, but watch your expense ledger!