Down and Dirty 30 – Fee Disclosures



Fee Disclosures – Closing Disclosures & Settlement Statements

SUMMARY | It’s oftentimes the most important question in the closing… how much?!? This discussion will highlight what, how and when the buyer, seller and brokers will learn about their fees. We will illustrate Net to Seller, Closing Disclosures vs Settlement Statements, and Instructions to Closing Attorney and how to navigate this process and ensure the numbers are right.

  1. NET TO SELLER | A very simple calculation but oftentimes delayed by getting actual invoices. First, lets look at the contract:
  2. Formula: Purchase Price – Loan Payoffs – Unpaid Taxes – Commissions – HOA Charges – Title Issues – Other Charges + Credits & Reimbursements
    1. Check out website!
  3. Timing: Though the formula is straight forward, getting actual invoices for all the fees can be challenging and is done leading up to Closing.
    1. Commissions – please send this as soon as you are able, preferably when sending the contract;
    2. Seller Credit(s) and Amendments – please provide all amendments and confirm that the Closing Attorney is in possession;
    3. Deposits – please provide copy of Earnest Money Deposit check or wire receipt;
    4. Ensure the Seller’s contact information is listed on the Contract to allow Closing Attorney to communicate directly regarding loans and liens;
    5. HOA & Mortgages: If Closing is at the end of the month, confirm with attorney whether Seller should pay the upcoming month dues or mortgage.
  4. Suggestions Going Forward:
    1. Review the Settlement Statement prior to Closing (if available);
    2. If not 6% commissions, ensure Closing Attorney has the Instructions by calling directly;
    3. Confirm that Seller has filled out information regarding HOA and Loans;
    4. If EOM, ask about paying or letting Attorney pay the upcoming month;
  1. BUYER CLOSING DISCLOSURE & SETTLEMENT STATEMENT | Significantly more complex due to Lender involvement, Insurance, and last-minute changes.
    1. Formula: Purchase Price + Closing Costs + Loan Charges + Taxes & Insurance (prepaids) + HOA Loan Amount – Deposit.
    2. Timing: Buyers need to budget and prepare for Closing, wanting information ASAP to allow for requesting the wire and even liquidating assets.
      1. Closing Disclosure is issued three (3) times!
        1. Day 1 (Beginning of Contract)
          1. What’s right? Lender Charges.
        2. 3 Days Prior (Week of Closing)
          1. What’s right? Lender and Attorney Charges
        3. Closing!
          1. What’s right? Everything!
        4. The CD is an elaborate dance between the Closing Attorney and Lender!
          1. The two parties work to “balance” the week of closing, ironing out details regarding insurance, taxes, escrows and more. If any information is missing (i.e. insurance, HOA) or one of the parties is not responding (LENDERS!), the final CD will be delayed to the Buyer.
  • Final Settlement Statement is typically sent the day before closing or sooner, once the Lender has approved the final numbers.
  1. Suggestions Going Forward:
    1. Review the initial disclosures and try to fill in the blanks and get better estimates.
      1. HOA – add in the HOA charges that were disclosed;
      2. Insurance – is it accurate, too high/low?
      3. EM Deposit – is it listed?
      4. Is the Loan amount correct?
    2. As Closing approaches use the 3 Days Prior CD and advise your client to send a wire based on those numbers. BUT – estimate high and send additional funds!
  • Bring a check to closing – this can be used to fund up to $5000 in additional money owed at closing that the wire doesn’t cover.


by: CNB Blog