Help me understand these closing costs, please

[FlyerBobcat]

From a current ebay TS auction:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&ssPageName=STRK:MEWAX:IT&item=200283983870
=================================================
The following fees are required to transfer the title. We will pay half and the winner will be expected to pay half. (THESE ARE IN ADDITION TO THE WINNING BID--IE If you win the auction at $5000, then you would pay $5000 PLUS half of the following fees!!!)
Escrow: $300
Title insurance: $300
Document preparation fee for Hawaii: $160
Recording fee: $50
Federal express fee: $50
Marriott transfer fee: $25

TOTAL FEES: $885
Winner will pay $442.50, we will pay $442.50. This money will go directly to American First who will take the fees out of the final price. We will tell American First that the winning bid is whatever it is PLUS $442.50, so that will be the final amount they expect the winner to pay.
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In this case, what is the "escrow" fee? I was thinking that escrow is an account that holds money paid (by buyer) for the other closing fees, not a fee in itself! Am I confused, or need to be straightened out?
Thanks.

 

[theo]

My $0.02 worth...

From a current ebay TS auction:

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&ssPageName=STRK:MEWAX:IT&item=200283983870
=================================================
The following fees are required to transfer the title. We will pay half and the winner will be expected to pay half. (THESE ARE IN ADDITION TO THE WINNING BID--IE If you win the auction at $5000, then you would pay $5000 PLUS half of the following fees!!!)
Escrow: $300
Title insurance: $300
Document preparation fee for Hawaii: $160
Recording fee: $50
Federal express fee: $50
Marriott transfer fee: $25

TOTAL FEES: $885
Winner will pay $442.50, we will pay $442.50. This money will go directly to American First who will take the fees out of the final price. We will tell American First that the winning bid is whatever it is PLUS $442.50, so that will be the final amount they expect the winner to pay.
=============================================

In this case, what is the "escrow" fee? I was thinking that escrow is an account that holds money paid (by buyer) for the other closing fees, not a fee in itself! Am I confused, or need to be straightened out?
Thanks.

You are asking some astute and completely legitimate questions. I claim no knowledge whatsoever about either Marriott and/ or Hawaii timeshares, but still offer the following generic observations:

1. I've never heard of a separately itemized "escrow fee" when a closing company is handling the overall transaction. The escrow function is generally included as part and parcel of a closing companys' services, along with handling all deed preparation and recording details, at least in my own experience.

2. I've never heard of a transfer fee as low as $25 at any facility. My bet is that if Marriott imposes a transfer fee (once again, I don't claim to know a thing about Marriott), it's likley considerably more than just $25! Even little dinky non-corporate chain resorts generally charge $50-75 (if they charge a transfer fee at all). I can't believe that $25 is correct, somehow.

3. Is "American First" a deliberately wily "look alike" name, or is it instead an inaccurately stated identification of First American Title? If the former, this may actually be a cagey way of the seller collecting more money for himself in the transaction through a back door avenue of fabricating non-existent closing costs imposed by his own self-named "in house closing company". If that's the case, your "half" of the "closing fees" alone would actually cover ALL costs of this closing. The second half (which he wouldn't actually have to pay to himself) would be money in the bank (...or pocket). I'm not asserting that this is the case, I'm merely noting that more due diligence is clearly in order here.

Personally, I think I'd start out by asking the seller for the full address of "American First". This would be an innocent enough and entirely reasonable question to ask. If that address turns out to be the same location / address as the seller, start sniffing more energetically, as that revelation may disclose a suspicious aroma in the air. Call me a skeptic, but the itemized costs within this particular listing seem odd to me --- even with openly admitting no knowledge of Hawaii or Marriott timeshares...

 

[Dave M]

Doesn't look like a problem to me.

The "escrow fee" is simply another name for the "closing fee". Regular title companies (not timeshare closing companies) often use that terminology. And the fee certainly looks reasonable.

Marriott's $25 fee is for the administrative work associated with handling the transfer. That's all it is - $25. Marriott also has a $95 fee to handle the ROFR. That's supposed to be paid from the buyer's funds at closing.

The one thing that seems strange to me is the seller's decision that title insurance is mandatory. Normally, the buyer is the one that should decide whether he/she wants the protection of title insurance.

 

[Bill4728]

Doesn't look like a problem to me.

The "escrow fee" is simply another name for the "closing fee". Regular title companies (not timeshare closing companies) often use that terminology. And the fee certainly looks reasonable.

Marriott's $25 fee is for the administrative work associated with handling the transfer. That's all it is - $25. Marriott also has a $95 fee to handle the ROFR. That's supposed to be paid from the buyer's funds at closing.

The one thing that seems strange to me is the seller's decision that title insurance is mandatory. Normally, the buyer is the one that should decide whether he/she wants the protection of title insurance.

As Dave said, some companies call their closing fees an "escrow fee". The company which just closed a condo we bought was an "Escrow" company not a "title" company even though they did exactly the same thing as the title company did when we refinanced our house last year.

Also I agree it does seem strange that the seller required title insurance.

BUT the bottom line is $442 is about normal to pay when closing a TS and a great deal when you're getting title insurance.

 

[FlyerBobcat]

thanks

Thanks for all the information. I just keep on adding to the knowledge base from all you TUGgers. Thanks again.

 

[richardm]

Title policy is mandatory if you close with First American Title....

First American Title Company must issue title insurance on their closings, so if they are the closing agent- a policy must be purchased... Since it looks like the Seller has agreed to pay a portion of the closing fees, they would have the right to choose the closing agent.