DEFINITION OF CLOSING COSTS
The purchase agreement will determine who pays for which fee. The following is a list of fees generally associated with a residential purchase transaction.
Escrow Fee : Service fee for handling the documents and funds, transfer of the property, and disbursement of funds.
Title Exam: Title company fee for performing an extensive title search of the public records and creating a chain of title or record history of the real estate.
Title Commitment: A written report of the title exam.
Deed Preparation: The attorney’s fee to prepare the new property deed.
Owner’s Policy: Title insurance that protects the new owner against ownership problems arising from past occurrences, such as missing heirs, fraud and forgery.
Loan Policy: Title insurance that protects the new loan against problems arising from past occurrences.
Transfer Service Fee: Title Company fee for transferring the property at the County Auditor’s Office.
Recording Fees: Recording fee paid to the county recorder for filing the new title deed, mortgage and satisfaction of seller’s mortgages.
Conveyance Fee: Tax payable to the county auditor based on the sales price. Some conveyances are exempt from this fee, such as transfers between a husband and wife, of parent and child.
Hold Signature Fee: Title company fee for examining the public records, after closing, to ascertain if prior liens have been released from the record so that clear title insurance policies can be issued. Sometimes this means multiple examination of the public records.
Document Preparation: Lender fee for preparing the necessary loan documents.
Tax Proration: Property taxes are paid in arrears. Therefore, the seller is debited their prorated share of the taxes and the buyer is credited with this amount. The reason being, is that the purchaser will be the one receiving the bill and responsible for paying it after closing.
Special Tax Search: Service fee for examining local ordinances to determine if any new taxes are to be levied against the property. These taxes are ones that have not yet been assessed to the current tax duplicate.
NEWMAN TITLE AGENCY | 12206 Pearl Road, Strongsville, OH 44136 | T: 800.245.8485 | F: 888.315.7066 | E: [email protected] Conditional Filing Fee: Service fee to exam and determine that all conditions of the lender have been met prior to title transfer.
Survey: A site evaluation which determines if there are any encroachments or violations of the property lines. This should not be mistaken as a boundary survey.
Credit Report: A report that indicates the buyer’s past ability to pay on a timely basis.
Appraisal Fee: A written report containing an appraiser’s opinion as to the value of the property.
Prepaid Interest: Typically the first month’s payment is due the second month after closing. The first payment always pays the previous months interest. As a result of skipping a month, that month’s interest is prepaid at closing.
Discount Points: A price paid to reduce the current interest rate to a more desirable rate.
Origination Fee: A one time fee charged by the lender to set up the loan.
Tax and Insurance Reserves: The initial deposit required to be sure that the full amount of the next installment is available for payment.
Pest Inspection: The fee required to be paid to a certified pest inspector to determine if termites or other pest infestations are present or were present at the home.
Real Estate Commission: The fee paid to the realtor(s) for advertising and facilitating the sale of the home.
NEWMAN TITLE AGENCY | 12206 Pearl Road, Strongsville, OH 44136 | T: 800.245.8485 | F: 888.315.7066 | E: [email protected]