In a real estate transaction, the title company plays a crucial role in ensuring that the property being bought or sold has a clear title, and that the transfer of ownership is completed correctly and legally. But who pays for the services of the title company, and how are their fees determined?
In most cases, the buyer is responsible for paying the fees associated with the services of the title company. This is because the title company's services are typically required in order to transfer the title of the property from the seller to the buyer.
The exact amount of the fees that the buyer is responsible for paying will vary depending on a number of factors, including the location of the property, the type of property being purchased or sold, and the terms of the sale. In general, however, the buyer can expect to pay several hundred dollars for the services of the title company.
One of the main reasons that the buyer is typically responsible for paying the fees associated with the title company is that these fees are considered to be part of the closing costs of the transaction. Closing costs are the various expenses and fees that are incurred in the process of buying or selling a piece of real estate, in addition to the purchase price of the property. Closing costs can include things like the commission paid to the real estate agents involved in the transaction, the cost of a home inspection, and the fees associated with obtaining a mortgage.
In some cases, the seller may agree to pay a portion of the closing costs, including the fees associated with the title company. This is typically done as a way of making the sale more attractive to the buyer, and can help to make the transaction more attractive to both parties. However, the exact terms of who pays for what in terms of closing costs will need to be negotiated between the buyer and the seller, and will be included in the purchase and sale agreement that is signed by both parties.
In addition to the fees associated with the title company, there are also a number of other costs and fees that may be incurred during the closing process. These can include things like appraisals, inspections, and credit reports, as well as fees for the escrow company that is handling the transaction. Some of these costs may be paid by the buyer, while others may be paid by the seller.
To recap, the buyer is typically responsible for paying the fees associated with the title company in a real estate transaction. These fees are considered to be part of the closing costs of the transaction, and will be negotiated between the buyer and the seller as part of the purchase and sale agreement. By understanding who is responsible for paying these fees, and how they are determined, buyers and sellers can help to ensure that the closing process goes smoothly and that any potential issues or delays are avoided.
If you are a wholesaler performing a double close using transaction funding, you can include the closing costs in the amount being funded, effectively allowing you to close with no money out of pocket.