One of the many ways closing attorneys increase their fees is by passing costs on to buyers and sellers for incidental costs of doing business, such as copying, recording, overnight mailing, or banking services. When quoting their closing costs, many attorneys omit these items, so they come as a surprise right before closing.
Some added costs are reasonable if needed to accommodate a buyer or seller, depending on the situation. Drafting and recording a Power of Attorney will be an extra cost, for example. Overnighting lien payoff checks or tax payments due the next day will incur extra costs. Some attorneys need to collect money to cover the fees they pay to their bank.
Banks do charge for wires, but usually no more than $30. Attorneys pass this cost on to buyers and sellers. Some attorneys increase the fee to $50 or $75 to collect extra money from the closing. Wires are quicker and safer than handing out large checks to sellers or sending payoffs.
The same thing happens for e-recording services, scanning services, wire confirmation, reconciliation services, and so on. These services are very helpful and they save the attorneys a lot of time. In addition to saving time, many attorneys use these fee charges to increase their own revenue. Charging a client $75 for a wire is not ethical when the bank charge is $25. Disbursing funds to the seller is part of the settlement fee and should not have an additional cost.
Make sure any quote you get from a closing attorney includes everything. It’s not less expensive if the settlement fee is $300, but you have to pay to use the pens, receive funds, for the attorney’s reconciliation services or wire verifications, or to receive copies of anything.
John C. Bennett is a real estate closing attorney and owner of Origin Title and Escrow, Inc.. Since 2003, Origin Title has handled real estate transactions – purchases, refinances, reverse mortgages – quickly and professionally. There will be no surprises, nothing misunderstood. Title searches are thorough and well-reasoned, to avoid unpleasant surprises later down the road. Calculate your closing costs in Georgia or Florida using our calculator or contact Origin Title using this form.