A good Escrow Company and Listing Agent do make a difference in buying a home

[usctrojancpa]

I'm sure most of you already know this, but as a buyer (or in my instance a buyer's agent) a good Escrow Company and a good Listing Agent can mean the difference between a nice smooth escrow or a complete mess.  I have a buyer who is buying an REO and not only is the escrow company a complete joke (selected by the REO bank) but the listing is basically MIA when information about the HOAs are needed.    The REO lender provided about 40 days to close which is more than enough time since my buyer is getting a conventional loan.  The problem is the escrow company was sitting on its booty and waiting to get the HOA documents and insurance until the last minute and the escrow officer NEVER responds to any emails and her assist is out on vacation every other week.  >    They didn't even know what HOA companies to contact because the listing agent provided them the wrong ones.  :-\  So I had to start making some calls and find out which ones they were (something that the escrow company should have been doing).  Also, I got the master insurance policy as the lender needed that to get the loan fully approved.  We are now back on the right track but may still miss the lender's deadline by a day or two.  If we do miss the deadline, the REO bank will access a penalty per day by closing late so I will insist the escrow company pick up that cost because it is their fault we'll be late to close.  I have no idea how this escrow company is still in business. 

 

[kinetics]

Is it Coast Cities Escrow?  I had a similar experience that you're describing with them.  Also chosen by the REO bank. 

 

[usctrojancpa]

Is it Coast Cities Escrow?  I had a similar experience that you're describing with them.  Also chosen by the REO bank. 

Is it Coast Cities Escrow?  I had a similar experience that you're describing with them.  Also chosen by the REO bank. 

Nope, Mid Valley Escrow Corp in Granada Hills, CA.

 

[rkp]

why is the norm that seller gets to choose escrow company?  can a buyer request/insist on another escrow company?

 

[usctrojancpa]

why is the norm that seller gets to choose escrow company?  can a buyer request/insist on another escrow company?

In a standard equity sale, everything is negotiable...including which escrow and title companies are selected.  The norm tends to be that the seller's agent selects both.  However, for REOs it is different (in most cases) in that if the buyer selects the escrow and title company then the REO bank will not pay for the owner's title and/or their half of the escrow fee.

 

[rkp]

why is the norm that seller gets to choose escrow company?  can a buyer request/insist on another escrow company?

In a standard equity sale, everything is negotiable...including which escrow and title companies are selected.  The norm tends to be that the seller's agent selects both.  However, for REOs it is different (in most cases) in that if the buyer selects the escrow and title company then the REO bank will not pay for the owner's title and/or their half of the escrow fee.

how much do these fees range? 

 

[usctrojancpa]

why is the norm that seller gets to choose escrow company?  can a buyer request/insist on another escrow company?

In a standard equity sale, everything is negotiable...including which escrow and title companies are selected.  The norm tends to be that the seller's agent selects both.  However, for REOs it is different (in most cases) in that if the buyer selects the escrow and title company then the REO bank will not pay for the owner's title and/or their half of the escrow fee.

how much do these fees range? 

Ballpark wise escrow fees are around .25% to .30% of the purchase price for each side (with a minimum if the sales price is low, it varies by the escrow company though).  They are all within a few hundred of each other.  They also charge in $300 to $500 in additional fees.  Owner's title policy is based upon the sales price and pretty much the same across most title companies and is separate from the escrow company most all of the time (I think the amounts are based upon a schedule along with the lender's title policy). 

 

[usctrojancpa]

The fun continues...the seller has been sitting on the grant deed package which is holding up the lender from funding.  I think my buyer and I hit the trifecta...not in a good way....bad escrow company, lazy listing agent, and apathetic REO bank.  Hopefully we should have everything sorted out by Monday/Tuesday and close by then so the nightmare escrow is coming to an end. 

 

[usctrojancpa]

The nightmare escrow that didn't want to end has closed today.    I'm so happy for my Buyer who was on pins and needles for the past week (being a first time buyer and all).  Special thanks goes out to SGIP who drove up all the way to the Valley to pick up the loan documents when they were ready to try to expedite things, my Buyer and I both appreciated that.  So I'll add that the point that having a good lender also makes a big difference in buying a home.  Thanks again SGIP! 

 

[rkp]

I seriously dont understand how RE industry survives with so many people making tons of money in the transaction.  Other industries have squeezed much of the middlemen and fees associated through efficiency with technology.  How can an escrow company charge .25% to .30% for each side?  What kind of work are they doing to justify that?  Thats over $2500 for an average $500K home in OC.  Is there that much work? 

 

[usctrojancpa]

I seriously dont understand how RE industry survives with so many people making tons of money in the transaction.  Other industries have squeezed much of the middlemen and fees associated through efficiency with technology.  How can an escrow company charge .25% to .30% for each side?  What kind of work are they doing to justify that?  Thats over $2500 for an average $500K home in OC.  Is there that much work? 

It's the same amount of work that is done for a $250k where they charge 1/2 that amount.  It's even a lower percentage over in Nevada where the escrow company is a title company all in one.  The agent commission and escrow fee structure are out of wack if you ask me.  I think the escrow companies should go towards a more of a flat fee model (with add on fees if there are HOAs or if the buyer is using a lender) because it does take the same amount of work to close a $200k home as it does to close a $2m home.  I guess escrow companies charge about the same because they all have an idea of what their competitors charge (smells a bit like price fixing to me).  A good business model would be to open an escrow company that charges a lower flat fee with some kind of floor pricing. 

 

[sgip]

re: Escrow fees - A cheap price won't smooth over any amount of crappy service provided. It's not the fees charged, it's the service standards a person delivers upon.

Had resisted commenting on this thread for some time, partly because it can turn into a breach of client confidentiality when details about the transaction are thrown about. It can also appear to be thread stroking (there's an image you'll need to mind-bleach away...) which has no place here. Mutual admiration societies make for terrible reads, so if it begins to sounds like it, imagine two battle scarred veterans sharing their war stories more than "hey, nice job.. Hey...you too!"

This was a difficult structured transaction with an additional layer of unique program issues to overcome. The buyer was very quick in dealing with any needs presented along the process which helped move things forward faster, allowing for nimble responses when required. When there was an issue with things outside of the buyers control, the only one who did the heavy lifting was USCTrojanCPA. When USCTCPA says there was... shall we say... a lack of enthusiasm by some parties in the transaction, that's really being diplomatic. The other 1/2 of the transaction and notably the Escrow really point out two things: First, the industry really needs another round of flushing. There still are quite a few turds in the bowl, and second: you really, really must be sure to work with service providers that take that label to heart. I know many buyers want to chase low rates and sellers must squeeze every spare commission dollar out of a deal, but at what price? Many of the delays and disappointments in this deal were always avoidable if only some parties took the extra step and actually worked for their commissions! That left USCTrojanCPA and SGIP to pick up the slack.

Kudos to USCTrojanCPA for stepping on the necks of a few people who have their business model set not on Warp Speed, but impulse power. As an example: I got three Emails from the sellers agent that went something like this:  "Here's my contact number for the appraiser", "Are we going to close or do we need an extension?" and "Hooray, you can mail my commission check here".  On the other hand when there were HOA and Insurance problems, USCTrojanCPA pressed all parties to get what was needed to obtain our clients loan approval. This was Escrow / Listing Agent 101 stuff here, but took yeoman's work to get it done.

These are the sort of closings that make the job interesting and frustrating at the same time. Think of sitting in the passenger seat of a nice Ferrari convertible travelling down Culver. The driver is grinding the gears every 100 feet. You can't push them out of the drivers seat. You've got to grin, make nicey nice with them, and continue towards the Spectrum. Once you get to your destination you'll take a cab home, never to ride in that persons car again no matter how sweet a ride it may appear to be.

My .02c,

Soylent Green Is People. 

 

[usctrojancpa]

re: Escrow fees - A cheap price won't smooth over any amount of crappy service provided. It's not the fees charged, it's the service standards a person delivers upon.

Had resisted commenting on this thread for some time, partly because it can turn into a breach of client confidentiality when details about the transaction are thrown about. It can also appear to be thread stroking (there's an image you'll need to mind-bleach away...) which has no place here. Mutual admiration societies make for terrible reads, so if it begins to sounds like it, imagine two battle scarred veterans sharing their war stories more than "hey, nice job.. Hey...you too!"

This was a difficult structured transaction with an additional layer of unique program issues to overcome. The buyer was very responsive to any need presented which helped move things forward faster and allowed for nimble responses when required. When there was an issue with things outside of the buyers control, the only one who did the heavy lifting was USCTrojanCPA. When USCTCPA says there was... shall we say... a lack of enthusiasm by some parties in the transaction, that's really being diplomatic. The other 1/2 of the transaction and notably the Escrow really point out two things: First, the industry really needs another round of flushing. There still are quite a few turds in the bowl, and second: you really, really must be sure to work with service providers that take that label to heart. I know many buyers want to chase low rates and sellers must squeeze every spare commission dollar out of a deal, but at what price? Many of the delays and disappointments in this deal were always avoidable if only some parties took the extra step and actually worked for their commissions! That left USCTrojanCPA and SGIP to pick up the slack.

Kudos to USCTrojanCPA for stepping on the necks of a few people who have their business model set not on Warp Speed, but impulse power. As an example: I got three Emails from the sellers agent that went something like this:  "Here's my contact number for the appraiser", "Are we going to close or do we need an extension?" and "Hooray, you can mail my commission check here".  On the other hand when there were HOA and Insurance problems, USCTrojanCPA pressed all parties to get what was needed to obtain our clients loan approval. This was Escrow / Listing Agent 101 stuff here, but took yeoman's work to get it done.

These are the sort of closings that make the job interesting and frustrating at the same time. Think of sitting in the passenger seat of a nice Ferrari convertible travelling down Culver. The driver is grinding the gears every 100 feet. You can't push them out of the drivers seat. You've got to grin, make nicey nice with them, and continue towards the Spectrum. Once you get to your destination you'll take a cab home, never to ride in that persons car again no matter how sweet a ride it may appear to be.

My .02c,

Soylent Green Is People. 

Very well put....it's not the price that should be in the driver's seat in a large transaction like purchasing a home but the SERVICE.  One of the reasons for this thread was to "blow off" a little steam but the main reason was to point out the obvious to folks that may not have thought much about it.  I was grateful to have a Buyer who was as fast as greased lightening whenever something was required of him. 

The biggest joy today was when I met my Buyer for lunch and handed him the keys to his first home, that's the reason why I keep putting up with the turds instead of putting my head through a wall in frustration.  No way was I gonna allow the listing agent and/or escrow to drop the ball, I did whatever I needed to get done to cross the ends zone by rolling up my sleeves and getting to work. 

Believe me when I say this....I greatly appreciate working with true professionals and they are out there, I'm just not fortunate enough to work with them all the time.  At least when you have a lender like SGIP in your corner, you know you don't have to worry about the lender taking care of their work.