HAPPY CHINESE NEW YEAR –
It’s the YEAR OF THE HORSE!
YOU HAVE QUESTIONS, WE HAVE ANSWERS!
VIVA ESCROW Q & A SEGMENT
(Real questions sent to us – verbatim!)
QUESTION:
I am a Buyer and there is a charge of $1,350 on my estimated closing statement for a “private transfer fee” that I do not remember agreeing to. What is this “private transfer fee?”
ANSWER:
Not knowing the background information of your transaction, I can only tell you what we have encountered in our transactions.
A private transfer fee is a fee that is written into the Covenants, Conditions and Restrictions of a new development and recorded to public records. The summary of this document should appear in a preliminary title report for Buyer’s review and there should be a disclosure issued by the Homeowners Association and included in their documents to the Buyer.
The document should state how much the fee is, usually a percentage of the re-sale price, what it is for, usually for continued development and maintenance of common areas, and sometimes it may have an ending time period, for instance, 30 years from date of document. It is paid when the property sells, through escrow. If it does not state specifically who will pay, the payment through escrow can be negotiated between Buyer and Seller.
The disclosure of this fee should have been given to you at the opening along with other disclosures.
EDUCATIONAL MOMENT:
The Seller should be aware of this private transfer fee and let the real estate agent know so that advance disclosure is given and added to any counter offers. But, if he has forgotten, this is when getting the HOA transfer documents and the preliminary title report in advance would be helpful as it should be included in those documents. It is important that the escrow officer, upon receipt of these reports and disclosures, immediately review them and point it out so that the item can be discussed between parties before the transaction goes too far along.
These transfer fees are more prevalent in new projects and those tend to have a higher sales price. A one percent (1%) fee on a $1.5 million sale is still $1,500 that has to be paid.
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~ Video of the Month ~
Watching on the phone? Is it real or AI?
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~ Quote of the Month ~
“If it’s endurable, then endure it. Stop complaining.“
~ Marcus Aurelius, Roman Empire Emperor ~
(I tell myself that every day)
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My YouTube Offering for the Month
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You Have Questions? We Have Answers!
Juliana Tu, CSEO, CEO, CBSS, CEI, SASIP
Escrow is my FOREMOST language!
Advance Disclosure:
The opinions expressed in this blog are solely the author’s.
Your comments and viewpoints are always welcome.
Info @ VivaEscrow.com