So I finally closed on my first investment property today. :O) Tomorrow I get the keys… :O) And then we will start the rehab… :O) My goal is to have the property on the market in 30 days. :O)
I can’t begin to tell you how disappointed I am with the title company. Some of my grievances (in case someone has any insight/advice):
1 - They did not send me the HUD until today and I have been asking for it for the past week. They always had an excuse.
2 - They did not want me in their office. They basically told me that they are too busy and that we had to close at my home or work. And they are collecting $125.00 for this “service”. I don’t think it is right for them to force me to pay for a service I didn’t ask and didn’t want…
3 - They are charging $900.00 for their overall service. $600 from me and $300 from the seller. When I asked why we were not splitting the cost 50%/50%, they said that those were the costs that they filled with my State’s Banking regulator. It seems that they had to file their fees upfront because it was an auction. I sent an email to the Department of Financial Institution to check on this information. Besides the fact that $900 is an outrageous fee, I don’t believe I should pay more than 50% of it.
4 - All the documents came with my RE broker’s address as my company’s address. The title company had the correct address on file and even prepared the HUD with the correct address. But them when they received the documents from the lender they did not check to confirm that the address was correct. After several phone calls, the notary decided to leave because he had another appointment. Eventually the lender asked me to change the address on documents so we could get them signed today. The notary had to come back so I could sign the documents.
This was only my second real estate transaction (the first was on my home few years ago). This may be regular stuff for you guys. But for me it was a very frustrating experience. I hate when I feel I don’t have control over stuff (like the fees).
I would love to hear your advice. I sent an email to the Department of Financial Institutions (which regulates title companies in my estate) asking for advice as well.
Tell us more about the $900 charge. What did you get for your money?
If $900 includes the attorney fee, recording fee, transfer fee, prorated taxes, and owner’s title insurance, you may have gotten a bargain.
The attorney fee could be split equally, and if a transfer fee is charged, then split that equally between buyer and seller. You should get 100% of the title insurance, courier service, and recording fee in addition to your share of the prorated taxes. If hazard insurance premium is collected at settlement, then that is 100% yours too.
It is not uncommon for the attorney fee to be split 2/3 to the buyer and 1/3 to the seller, especially if financing is involved because the attorney spends more time on the buyer’s portion of the transaction than the buyer’s.
The $900 was only the title company fee to do the administrative work. There is no attorney fee in my state. Actually I guess the $900 would pay for the title company’s attorney - so you could say it includes the attorney work.
There is no transfer fee in my state.
Recording fees, prorated taxes, and owner’s title insurance were all charged separately.
I talked with my State’s Department of Financial Institutions and they confirmed that title companies have to file their fee schedule with them. They asked me to send them a letter or complaint so they could research and let me know if they charged me the correct amount.
In my state the customary practice is to split the title company fee 50%/50% between seler and buyer.
I am waiting to get my final documents/HUD before I decide whether or not to file a complaint with the Department of Financial Institutions.
This is why you must always use your own attorney or title company. I assume that you are happy with the house and know that you’ll get the profits / income desired; chalk this up as a learning experience and move on.
No. They told me that I could not close at their office. They didn’t have the time to meet with me there. The only way to close was to send a notary to my office or home. I had to pay the $125 fee.
Hassan - I did not choose the title company. The auction house did.