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What is the fee for the escrow service?

By Luisa , Orellana

Real Estate Sales Representative with Greater LA Escrow

May 04, 2007 07:04 PM

Many believe the escrow fees are set by law. Escrow fees are NOT GENERALLY regulated by law or by SOME state statues. But Check your States Statue for regulation on Escrow Fees. Escrow Fees are set by each escrow company or escrow officer.

Although many individuals complain about the escrow and closing costs involved in the property transaction, it is a required step that is necessary to protect both sides during what is an expensive business arrangement. Escrow and closing costs can make up a component of 3% to 6% of the total purchasing costs. However, real estate laws now make this stage transparent, as both the homebuyer and home seller are able to see in writing the total number of escrow and closing costs has been charged to them.

The escrow fee is normally based on the size and complexity of the transaction. Also on the liability assumed and the cost of producing the service. Since there are so many types of escrows and every transaction is different, there are no set fees. It may be necessary to charge additional fees for extra or unusual services performed during the course of the escrow.

Escrow fees may vary depending on your local area. Normally, the fees are higher in larger areas than in smaller ones. Now in days, the fees for an escrow in Southern California is $550.00 minimum for a refinance transaction and $1.95 per thousand, plus a base fee on a sale transaction and other fees may apply, depending on the complexity of the transaction. Escrow fees vary from state to state and even from county to county.

Upon request, your escrow officer will be able to provide you with an estimate of costs as well as those costs charged by others, provided such information is available. Usually the escrow fee is divided in accordance with the agreement of the parties.

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Jeff Belonger

Social Media - Infinity Home Mortgage Company, Inc - Cherry Hill, NJ

The FHA Expert - FHA Loans - FHA mortgages - USDA loans - VA Loans

Luisa.... hate to say this, but you can't put a general statement out there like that. In NJ, they are state specified and I know Maryland, De, and a few other states are the same. It is state regulated. Just food for thought. Maybe Cali. is different, but that doesn't mean generally not...

jeff belonger

May 04, 2007 07:25 PM

Joe Schmitz

Summit Mortgage Corporation - Honolulu, HI

Out here in Hawaii our escrow fees vary based on the escrow company and purchase price/refi amount. I always assumed it was like that in all states. That's interestesting that NJ actually sets their escrow fees.

May 04, 2007 08:05 PM

Anonymous

Alfie Barretto

All escrow fees & title fees has it own shcedule of fees in Northern California. Each escrow & title companies distributes their scheduled fees to each real estate and mortgage companies together. More or less you can estimate yourself how much would it cost your client altogther in terms of title fees and escrow fees. It's pretty much set. Once quoted of an escrow fee, expect it's final especially on an Estimated Closing Statement. The fee is a lot cheaper than the Southern California escrow fees. The property located in Northern California, cost my client twice as more if the escrow was opened in Northern California. I've been in the business for twenty two years and it really surprised me after an escrow company charged my client for $1,980 just for an escrow fee, based on a purchased price of $456,000. If the escrow was done here (Northern California) it would have only cost my client $800-1,000 at the most. Anyways, I just want to hear from anyone if this make sense at all. Was that just a normal? I mean was the fee, just right for that transaction? Thank you.

Nov 26, 2008 03:41 AM

Anonymous

Judy

I'm in my 38th year of being an escrow officer and our fees have not changed much during that time. Escrow fees can vary from area to area in Southern California. Lots of people want to compare escrow fees for an 'independent' escrow company versus a 'title company' escrow division. There is no comparison...apples and oranges. Title companys derive their primary source of income from title insurance premiums. Independent escrows sole source of income is from escrow transactions. The duties performed by each can also vary greatly. Fees in our area are approximately $2.00 per thousand, based on the purchase price, plus a $200 base fee. That fee is charged to both Buyer and Seller. Most escrows in Northern California are handled by a title company escrow division. Their fees seem to be fixed, for the most part. Southern California's escrow process is quite different from anywhere else in the country, including Northern California. Having worked on the East coast, in the South and in California, I have to say that I'm partial to SoCal's method. Having a neutral third party involved to work for both Buyer and Seller, seems to be the ideal situation for the parties in the transaction.

Jan 04, 2010 07:44 AM

Luisa , Orellana

Greater LA Escrow - Los Angeles, CA

Greater LA Escrow

Thanks for your comment Judy! Completely agree. I am finding that many escrow companies out here in Los Angeles are starting to Set a Flat Rate for escrow transactions. Especially now with the new GFE being enforced. Its going to get interesting. As if we're not competitive enough.

Jan 06, 2010 05:22 PM

Anonymous

Cite Systems

With the new GFE changes, setting a Flat Rate for escrow transactions is a big step in the right direction for your escrow companies. But you still have to contact them for an exact quote on title insurance premiums (both lenders and owners depending on refi or purchase) and any state applicable transfer taxes. My company has recently released a GFE Calculator specifically for mortgage professionals to get instant escrow pricing for any transaction from their settlement services provider. No more voice mails, no more incorrect quotes, no more hassle.

If you would like to know more please visit us at http://www.progfecalc.com

Jason Burchill

Mar 04, 2010 06:40 AM

Anonymous

Sesan Olabiyi

Pls,

I am based in Nigeria. I love e-commerce but fear frauds. I just learn about escrow services. can you help me learn more?

I think I would appreciate more info in the area of cost and safety for a very small business just learning the rope. Thanks

Aug 14, 2010 12:04 AM

Anonymous

victor

Hi Luisa,

Thank you for providing a great service for consumers. I wonder if you could clarify this comment from Judy

Fees in our area are approximately $2.00 per thousand, based on the purchase price, plus a $200 base fee. That fee is charged to both Buyer and Seller.

Does this fee formula means that for a 500,000 purchase price. The fee would be $1000 to be split by Buyer and Seller. Or does it means that each pays $1000.

Thanks for the clarification.

Feb 07, 2012 10:00 AM

Luisa , Orellana

Greater LA Escrow - Los Angeles, CA

Greater LA Escrow

Victor: Based on a Purchase Price of $500,000.00, $2.00 per thousand plus a $200.00 base is actually $1,000.00 + $200.00 so it would total $1,200.00 and that is per side. Each party usually pays their own escrow fee plus any other closing costs pertaining to each party throughout the transaction.

Hope this helps answer your question.

May 11, 2012 01:46 AM

Anonymous

Gunda

I bought a house for only 67000 $. It is bankowned and I have to pay full escrow costs.

I got an estimate over nearly 1900 $, excl. Tax, 900 for the escrow company plus same fees, 470 Title Ins., plus 125 Escrow for Title, 147 for tranfer to Tile comp., plus.....

It seems to be very high, even for California?

Thanks for an answer.

Feb 05, 2013 03:33 PM

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