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Urgent real estate question! Help Please!

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Urgent real estate question! Help Please!

Old 02-14-06, 02:32 PM
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Urgent real estate question! Help Please!

Ive got a urgent question for you real estate/law people. Im schedualed to close on a house on friday. Yesterday I went in to go over paperwork at the title company office. On the contract for the house, the seller agreed to split closing costs 75% seller/25% buyer. This is exactly as it says in the contract. In the paperwork at the title company, they split the escrow 75%/25%, but left the other loan fees, taxes, and a few other little things all for me (buyer) to pay. Both my mortgage broker and I were under the impression that we wee splitting all fees 75/25. But the RE agent who represents both buyer and seller is unwilling to go back to the seller about splitting the other fees. In the way the contract is worded, could it be enforced to make them pay 75% of all fees?
Old 02-14-06, 02:37 PM
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Whose lawyer are you using for closing? If it's yours, ask them about it. If it's not, I would still ask, but remember they're not working for you.

We had a problem at closing too. We were supposed to have, and paid for, a basement. During construction they hit water, and we were expecting a whole refund. Builder saw it different, saying it cost him extra money for landscaping (he didn't have the dirt from the basement). We consulted our lawyer for closing, and he looked over the contract and said it is clearly stated how much landscaping would cost. Result: we got all of the money back that was alloted for basement expenses.

Last edited by IDrinkMolson; 02-14-06 at 02:39 PM.
Old 02-14-06, 02:45 PM
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We dont have a lawyer. There was a lawyer who looked over the docs, but I think he was hired by the title company. We havent got a lawyer yet, but may by the end of the day. I was wondering if any of the law/RE types thought I had a case.
Old 02-14-06, 04:02 PM
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I am not sure of the real estate law in Nevada (assuming that's where you're from, it goes state by state). But, in most states it is the buyer who pays for title/escrow/attorney services. Your contract probably does not state that the seller is buying the services of the attorney, just that the seller is covering 75% of your closing costs. As such, the title company is hired by you and the attorney should represent you.

If the seller only wanted to pay 75% of tax/insurance reserves, then they should've put that in the contract.
Old 02-14-06, 04:20 PM
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Does the contract defines cost anywhere. Costs and Fees are probably considered different
Old 02-14-06, 04:28 PM
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I'm not sure if loan fees and taxes are included in 'closing costs'... if the fees you're talking about are supposed to be included in the agreement, and they aren't paying - you could basically get out of the contract unless they are willing to agree. Start acting like you're going to walk away and they'll scramble to make you happy depending on how anxious they are to close. If they're ready to move out and whatnot, it's likely they'll agree to whatever.
Old 02-14-06, 04:30 PM
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Yeah - you need to be a bit more specific with the language of the contract. Put the exact wording in here and let us take a look. This is also the problem with dual agency - you could try to go over your agent's head if they work for a company - or talk to another agent and see what they say. You need an objective/independent opinion - it doesn't sound like you can get one from your agent here.
Old 02-14-06, 04:47 PM
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What state are you in?

In Indiana, the agent is working as a "dual" (limited) agent. Meaning he/she is getting all of the commission (minus broker split). He/she is more than likely making a nice chunk a change.

How much money are we talking about? $300? $1000?

In any event, in Indiana working as a limited agent is a fine line, one that is easily sued. If you REALLY want the agent to go back to the seller, threaten to back out of the deal or sue him/her. But I would only do so if your earnest money is less than the amount you're talking about here.

When I work as a buyer agent I write up the contract "seller to pay all closing costs &/or prepaids". This way there is no confusion. Tell the agent if he/she were really working in your best interests she would have written the contract clearer and you bet a judge would agree with you.
Old 02-14-06, 04:51 PM
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Loan fees, etc. would not be considered closing fees, nor would taxes. If he was paying 75% of all fees, including financing, it would obviously be to your advantage to suddenly buy down your loan by paying for 10 points because the seller is paying 75% of it. Closing costs, are costs to close....recording fees, title fees, escrow fees. What you are talking about is loan costs and costs of ownership (taxes).
Old 02-14-06, 04:57 PM
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Originally Posted by kvrdave
Loan fees, etc. would not be considered closing fees, nor would taxes. If he was paying 75% of all fees, including financing, it would obviously be to your advantage to suddenly buy down your loan by paying for 10 points because the seller is paying 75% of it. Closing costs, are costs to close....recording fees, title fees, escrow fees. What you are talking about is loan costs and costs of ownership (taxes).
this is what I was thinking, but I didnt stay at a holiday inn last night so I didn't want to be wrong. Closing costs aren't the same as taxes and loan fees.
Old 02-14-06, 05:35 PM
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uli: If you'd like you can fax me the contract. I can then post it here for review. Feel free to black out names and addresses. I think that's the only way we can tell you for sure. My fax is 646 two one eight 46 sixteen. Or scan it and email it to me: [email protected]
Old 02-14-06, 07:43 PM
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Originally Posted by kvrdave
Loan fees, etc. would not be considered closing fees, nor would taxes. If he was paying 75% of all fees, including financing, it would obviously be to your advantage to suddenly buy down your loan by paying for 10 points because the seller is paying 75% of it. Closing costs, are costs to close....recording fees, title fees, escrow fees. What you are talking about is loan costs and costs of ownership (taxes).
Wouldn't transfer taxes be considered closing costs? I would agree for things like fees and prepaids.
Old 02-15-06, 12:37 AM
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Every state is different. Washington has an excise tax that is traditionally a seller paid item, Oregon has no transfer tax. I guess I still wouldn't consider them a closing cost, though, assuming I understand what you are saying. If it is an excise tax like I am use to, I think it is the sellers. If there is some nebulous transfer tax, I could see where that could be considered both.

Again, it all depends on the state. Here, the seller pays for the title insurance (though the buyer may be required by the bank to buy them a policy as well), and I don't think that is something the buyer would want to split the costs of. I think of closing costs as only the fees the closing agent charges to close the transaction. Lots of people mistakenly refer to everything paid at closing as closing costs, but they really aren't.
Old 02-15-06, 09:06 AM
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Originally Posted by kvrdave
Every state is different. Washington has an excise tax that is traditionally a seller paid item, Oregon has no transfer tax. I guess I still wouldn't consider them a closing cost, though, assuming I understand what you are saying. If it is an excise tax like I am use to, I think it is the sellers. If there is some nebulous transfer tax, I could see where that could be considered both.

Again, it all depends on the state. Here, the seller pays for the title insurance (though the buyer may be required by the bank to buy them a policy as well), and I don't think that is something the buyer would want to split the costs of. I think of closing costs as only the fees the closing agent charges to close the transaction. Lots of people mistakenly refer to everything paid at closing as closing costs, but they really aren't.
HUD's definition of closing costs is that they are "customary costs above and beyond the sale price of the property that must be paid to cover the transfer of ownership at closing; these costs generally vary by geographic location and are typically detailed to the borrower after submission of a loan application."

However, the total of all the costs is defined by HUD as the "Total Settlement Charges" (line 1400 on a regular long-form HUD). Then HUD defines Settlement as "another word for closing" so that muddies the waters a bit. But I would bet that the intention of the contract was 75% of all the costs to the buyer, not just the Government/Title/Transfer charges.

Ultimately we won't know anything if uli doesn't send the contract. Without it there's no way to know one way or the other.
Old 02-15-06, 03:25 PM
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We discovered that we were right. The wording is that the buyer (us) only pays 25% with seller paying 75%. The RE agent told the seller that it means only the escrow/title fees. The RE agent admits it was her mistake, but now the RE agent and seller are not willing to uphold the contract. We had even arranged to pay almost 1/2 of the fees with our mortgage broker chipping in another $1000 (basically reducing the amount owed by $1000). Any suggestions on how to force the agreement? The remaining balance is $2300 and neither the seller not re agent are willing to comprimise (the re agent also stopped returning our calls, even though she represents us too.)
Old 02-15-06, 03:56 PM
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Best thing to do is to get a $50 letter from an lawyer to the RE agent's broker mentioning suing for specific performance, breach of fiduciary responsibility, etc.
Old 02-15-06, 03:56 PM
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How did the RE agent admit it was her fault? Orally? E-mail? You need to get some documentation - send her a certified overnight letter repeating what she told you. That it was "her" fault. Document that she has been dodging your phone calls and not "representing" you. Put it all in the letter.

Then - tell her if she doesn't get back to you w/in 24 hours - she is fired.

Then - find a new agent to represent you in the deal. You have a binding contract - if what you say is correct - the agent or the seller should pay the extra $2300 - not you.

Are you in a position to refuse to close and hold out? They can't easily put the house on the market and not tell sell to you - it's probably not worth their effort/time. If anything - this extra cash should just come out of the agent's commission since she's the one who messed up.
Old 02-18-06, 12:37 AM
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OK, some closure. The RE agent admited it orally to me, the mortgage broker, and my lawyer. They agreed to honor the contract as written with the agent contributing the ballance from her commission. We close on Monday.

The Bus, sorry about not sending the contract. Part of it was Ive been extremely busy at work (thats why Im just getting around to posting again) and was just a little nervous about sending it, even with info blacked out. Its not anything personal.
Old 02-18-06, 02:43 AM
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Whooooo! A happy ending. And then there's all the sex with dead people.

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