Piles of Paperwork Hiding the Closing Costs

"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.

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

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.

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.

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

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!

Gene

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.

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.