Exorbitant Escrow Fees
I look forward to your column and wish it ran every week. My boyfriend and I made offers on five homes before finally getting one approved. You know in this current climate; the seller calls the shots. Even though my sister is an escrow assistant, our Realtor® noted in our offer that the seller could select the title and escrow companies. There’s a lot of paper flying back and forth during the escrow and loan process. And I admit we didn’t pay as much attention as we should have. When I got my closing papers from escrow, my sister asked to look at them. She told me that the fees escrow charged us on a $1.2 million dollar purchase were approximately $900 more than what her escrow company would have charged. I accepted that we paid the seller top dollar for our home, but why did we have to pay their escrow company top dollar as well? Do you think we have any recourse? Jenna
Congratulations on the successful closing of your new home! Although the contract is typically worded that the seller selects the escrow and title companies it is usually their real estate agent who does so. As a real estate agent, I have been amazed over the years by the different levels of service between escrow companies. But I have noticed that generally their fees are similar. Some real estate companies own escrow companies or are affiliated with them. In that instance agents are encouraged by their broker to use those companies. But generally, their fees and competency are similar to other companies.
Just because you closed escrow doesn’t mean your Realtors® job is over. Ask your sister to put in writing what her fees would have been. Then ask your Realtor® to get fees from another local escrow company. Assuming the second estimate also indicates you were overcharged, have your agent email both estimates to your escrow officer and the seller’s Realtor®. Your real estate agent should request a refund. Their overcharging is bad business. If they don’t grant a refund your Realtor® should appeal to the manager of the escrow company. And if the escrow company is owned or affiliated with the brokerage, should contact that manager as well. And if all else fails, I suggest you let the escrow company know that you will use social media to expose them.