This past week The Schuman Team of Washington Fine Properties has been asked some great questions about the settlement process by our sellers that I wanted to share with you:
Question: As a seller, Can I choose the settlement attorney or title company?
Answer: In Maryland, the purchaser has the right to select the settlement company which is also known as the title company, the person conducting the settlement may or may not be an attorney. That is not to say that a seller cannot make a request on what company to use for settlement but it is the ultimate right of the purchaser. The settlement attorney does not represent either party in MD. A seller may have legal representation at any time but we do not typically see sellers hire their own attorney unless there is a contentious matter that has not been resolved.
Question: What are my costs of sale as a seller in Montgomery County, MD?
Answer: Since every real estate transaction is unique, there is not one answer to this question. However, there are standard fees that you can expect at closing and they are as follows:
Commission - % of the sales price that was agreed to in your listing agreement.
Administrative Fee (Real Estate Firms) - $200-$400 Many real estate companies charge an administrative fee in addition to the commission. Washington Fine Properties does not.
Closing Fee - $300-$500 The settlement fee the title company charges for conducting closing and apportioned to the seller.
Document Preparation Fee - $150-$200 The fee the title company charges for preparing the seller's documents. Sometimes the Doc. Prep. fee is combined with the closing fee.
Deed of Trust Release Fee - $50-$75 - The title company prepares and/or files a "certificate of satisfaction" which release releases the mortgage lien off the land record. You will have a processing and recording fee for each mortgage you have outstanding. A home equity is also a mortgage lien and even if there is a zero balance or this account was never used there will still be processing and county recording fee to get it released. NOTE: It is imperative if you have borrowed any funds against the house recently that you inform the title company so their payoff can be accurate. Do not use your equity line checks or credit card for a few weeks prior to settlement. Always continue to make all mortgage payments due up until settlement.
Transfer & Recordation - 1.1% of sales price. Typically a buyer and seller will split transfer & recordation fees. The seller's side in Montgomery County as a rule of thumb is 1.1%.
Overnight fee - $20-$50 per mortgage payoff.
Water Escrow - $200 The title company will pay the final water bill as this can create a lien on the title. If the bill is less, the seller will receive the overage back. If it's more, the seller will owe additional $ to the title company.
Other fees - Examples of other fees that you might see on the settlement sheet are 1.) Monetary credits for inspection items, 2.) Power of attorney; if requested, 3.) Home Owners Association (i.e. late fees, assessments), 4.) Rent back including collection of rent for the period agreed to in the contract plus any a security deposit.
Mortgage Payoffs - Remember that a mortgage is paid "in the arrears" so you will owe interest up to the closing and generally a period of 7-10 days is added as a cushion to allow the mortgage payment funds to clear and to be delivered to the bank; any overage sent following receipt will be refunded directly to you from your mortgage company.
Note: you will also get back any escrows your lender holds for payment of taxes and insurance; this will be returned in about 30 days following receipt of the payoff.
Marsha and I want to thank Joy Siegel, Principal of Settlement Pros in Bethesda MD for her assistance with this post! Our clients love settling with Joy!
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