Piles of Paperwork Hiding the Closing Costs

Real Estate Broker/Owner with State Wide Realty Co.

Piles of Paperwork Hiding the Closing CostsHomes for Sale in Farmville VA

One of the main complaints of buyers is the mountains of paperwork required by lenders....they could easily get writers cramp just filling in forms before they ever get to the closing table. So it's easy to understand why they walk away from the lenders office feeling a little dazed and confused. Once such buyer recently emailed me after leaving his lender with the question, Can you tell what how much the closing costs will be?  As a real estate agent this is one of those questions that we're not suppose to answer....we're not suppose to offer information about the lending process and loans. So this was my response:

That is a good question for your lender and closing attorney. I can tell you that you will be asked to sign a settlement statement at closing. Your closing agent will go over this statement in detail with you and answer any questions you might have.

There are two sides to a settlement statement: sellers and borrowers. This is a detailed summary of all the costs related to the closing of the property and which side will be paying for each particular cost.

Every loan is different just as each real estate transaction is different and the fee's may vary so it's impossible for me to give you an amount of closing costs but your lender or closing attorney should be able to help.


I believe it best to direct a client to the source for information when they ask questions that ethically I'm not permitted to answer but hope that directing them towards the settlement statement might help the sort through the mounds of paperwork to find their answer. Do any of you have an alternative approach to this question about closing costs?

Post Written By: Brock Robinson / State Wide Realty

Picture taken by: Ashley Fisher

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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

"As a real estate agent this is one of those questions that we're not suppose to answer"

Goodness.  Where is that written?  Our Association approved forms includes a "Buyer's Closing Cost Estimate".  This is a first step in writing a contract or any time a buyer has questions.  It also helps the agent determine if the buyer is ready with necessary funding resources.


Dec 27, 2010 02:51 AM #1
Larry Atkins
State Wide Realty Co. - Farmville, VA

Lenn, I was referring to the exact amount of closing costs. Since, this question would be directly effected by the details of their loan I do not feel it is appropriate for me to answer as this could be construed as offering financial information. However, we can offer information about what the closing costs entail, which is what I believe you a referring to but I'm sure each agent has a different approach for dealing with this question.

Dec 27, 2010 03:03 AM #2
Karen Kruschka
RE/MAX Executives - Woodbridge, VA
- "My Experience Isn't Expensive - It's PRICELESS"

Larry  I hope you and your family had a lovely Christmas and I wish you a Happy, Healthy and Prosperous 2011.  I do give clients an estimate, but have them sign off that it can be impacted by a change in lender fees depending on the loan they select.  As we know people frequently change loan plans mid-stream

Dec 27, 2010 03:10 AM #3
Rodney Mason
On Q Financial - Atlanta, GA
FHA 203(k) & HomeStyle Renovation-AL,FL,GA,TN

The buyer's lender should be providing them with an estimate of the breakdown.  The GFE must be provided to the borrower within 3 business days of it being a loan application.  Of course, things will change, but it will at least get them a general idea that should not very very much from the final numbers.

Dec 27, 2010 05:02 AM #4
Erica Ramus
Erica Ramus - Ramus Realty Group - Pottsville, PA - Pottsville, PA
MRE, Schuylkill County PA Real Estate

Here in PA we must give the buyer an estimated closing cost sheet! We can certainly discuss the costs and go over them with our buyer.

Dec 27, 2010 05:27 AM #5
Tre Pryor
REMAX Champions - Louisville, KY
Realtor, e-PRO - Louisville

As long as they are expressed as Estimates, I think a Realtor is providing a useful service. But let the experts be the experts, IMO.

Dec 27, 2010 06:02 AM #6
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL

Larry - This is why I have buyers go over their Good-Faith Estimate with their lender prior to even looking at property. 

Dec 27, 2010 06:41 AM #7
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Larry:  I know that "glossed-over, deer-in-the-headlight, I'm-as-confused-as-heck-look" very well.  And as much as we'd all like to live in the perfect world where all is explain and then understood ... it just doesn't happen.  And you're absolutely right.  All the documents and requests for documents do scare some people!  The whole process has just gotten scarey, extremely serious, and cumbersome.  It's exactly why all professionals involved in the transaction must be on the same page and working in tandem.  Otherwise the clients' eyes just get more glazed and the whole buying process becomes something they never want to endure again.

Lenders must be the definitive word on the ending closings costs, no doubt ... but all professionals in the transaction can offer valuable input and calming support.  Great post and topic for discussion!


Dec 27, 2010 07:14 AM #8
John Novak
Keller Williams Realty The Marketplace - Las Vegas, NV
Henderson, Las Vegas and Summerlin Real Estate

Hi Larry - I do an estimated cost sheet at the time of the offer, plus the buyer should get a good faith estimate from their lender. Both should be pretty close, with the GFE given more weight. The exact figure is rarely available until right before closing due to prorations. As long as this doesn't deviate significantly from the estimates, the buyer should be happy.

Dec 27, 2010 08:54 AM #9
Patricia Regan
The Regan Team Home Loan Group - Petaluma, CA

The borrower will get a good faith estimate within 3 days of applying for a loan. Once a GFE is generated by the lender, the fees cannot change unless their is a changed circumstance such as buying down a rate, changes to the loan amount, new property. The disclosures themselves can be overwhelming but during the 30 day escrow, the buyers should be able to find time to speak with their lender to go over the GFE. The fees for the most part will not change if you have a set closing date. 

As John mentioned, the prorations and pre-paids may vary slightly but not by much if the date of closing is set.

With the new regulations, the days of unethical lenders doing the "bait and switch" are gone. I hope this helps and I hope that people will have a little more faith in their lender doing the right thing.

Dec 27, 2010 03:39 PM #10
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