buyers beware of hidden title fees!!

By
Real Estate Broker/Owner with Housing Market Realty

As many of my fellow  REO investors know,  bank appointed title companies are creating an involuntary and very lucrative "profit center" for themselves.  We have purchased several REO's recently and have been hit with "transaction fees" and "closing fees" and get this: "environmental fees" ; in some cases over $500 worth.

Usual and customary here in Florida puts the cost of a title policy and insurance on the seller, and typically, the party that chooses the title company is the party that pays for title insurnace. That makes sense, but we have seen a trend of title companies charging the buyers fees of $400 or more.  What really makes this insulting is that in this area, most of the REO closings are handled by title companies in South Florida and as a result, we do what is called a "mail away".  We have to hire a courtesy closer and pay that as an added fee. We wind up getting no real service for the fee.

This may sound like a complaint, and many of you may be thinking" hey your'e stealing the house, so what's a few hundred bucks?"  I get that, however, if you are NOT told this when making an offer, you wont know to adjust you offer accordingly. Unfortunately,  I have never had an REO agent tell me upfront that I would be paying these fees,

My point of this post is to warn other investors to this trend to help them to avoid the same "sticker shock" that I have received!  REO's can be bargains , but buyer beware! 

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Rainmaker
671,988
Sandy Shores FL Realtor®, Melbourne Real Estate
M & M Realty of Brevard Inc. - Melbourne, FL
Brevard County Real Estate, Florida's Space Coast

Charles, Great post and oh so true. I have had customers dealing with these types of title companies, and in one case, there were nearly $1000 in junk fees that were tacked onto the purchase. Luckily, we have become familiar with many of these companies that are handling the REO's, so we have been calling them first to get "estimates" of true closing costs.  Often times it's hard to get a straight answer on what the fees will be.

Apr 09, 2009 09:30 AM #1
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Rainer
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Charles Fischer

Professional Real Estate Services
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