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Category: Real Estate Law
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Experience:  20 years extensive experience in real estate law, foreclosure, finance, and landlord tenant law.
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I currently have a lease/puchase option on a condo in Maryland.

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I currently have a lease/puchase option on a condo in Maryland. I was working through the lender's paperwork and realized that I probably need a contract above and beyond what I have. This is especially true for negotiating who pays what fees at closing. Of course, I'm trying to minimize costs.

Do I need a real estate attorney to do this (since there never was a real estate agent involved)? Are there alternatives? Can they negotiate the fees directly with the seller?

Thank you...
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  Law Pro replied 1 year ago.

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What fees/costs are you talking about?
Customer: replied 1 year ago.

Fees at closing... loan origination fee, closing/escrow fee, owner's title insurance, mortgage recording charge, transfer taxes, hazard insurance reserves, daily interest charges, hazard insurance, etc., etc. I have nothing on paper right now on who pays what...

Expert:  Law Pro replied 1 year ago.
Regretfully, those costs and expenses are almost ALL yours.

Closing costs for buyers are tied to processing paperwork and generally range between 5 percent and 7 percent of the sale price. Some costs stem from directly the loan application while others, such as the appraisal, relate to the dwelling. Closing costs for buyers may include:
  • Fees charged for obtaining a mortgage
  • The cost of home inspections - structural and also well and septic inspections if there are such
  • Homeowner's insurance
  • Title insurance and settlement fees
  • Survey if the lender demands such - a buyer should usually get a survey done to that they know the property's perimet and to make sure there are no encroachments by neighbors, etc.
  • Transfer taxes, which sometimes are shared with sellers (usually the buyer and seller pay 1/2 each - but that can be negotiated)
Realtors can explain the fees that buyers in your area typically pay and help you estimate what yours will be. You’ll want to be prepared so you don’t get an unpleasant surprise at the closing table.

Consumer advocates long have pushed for more accurate good faith estimates, which lists the fees required in home loan transactions. Your lender must provide the document shortly after you apply for your loan. It is intended to give you an opportunity to shop around for the best mortgage deal. Unfortunately, estimated fees have a way of increasing when the loan closes. Treat your estimate as a guide when comparing costs from different lenders. If your estimated fees rise by significantly, it may be an indication that your lender is simply looking for a bigger payday. You are entitled to an explanation of all fees.

The seller has minimum closing costs.

Sellers typically are expected to pay:
  • Loan payoff costs, including possible prepayment penalty fees
  • Real estate commissions to agents or brokerages
  • Transfer taxes (usually split 1/2 with the buyer - but can be negotiated)
  • Notary fees
  • Attorney fees, if they choose to use a lawyer


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Customer: replied 1 year ago.

So... back to the key questions... since a real estate agent isn't part of this purchase option transaction: 1) is it prudent to use a real estate lawyer to create a purchase contract and 2) can the specifics of whether the seller or buyer pays a specific fee be part of this contract? The lender currently assumes that I as the buyer am responsible for all closing fees in their Good Faith Estimate. Thanks...

Expert:  Law Pro replied 1 year ago.
. since a real estate agent isn't part of this purchase option transaction: 1) is it prudent to use a real estate lawyer to create a purchase contract

YES, AS TO ANYTHING THAT'S NOT IN THE LEASE-OPTION - THAT CAN BE NEGOTIATED. MOREOVER, EVEN IF SOMETHING IS STATED IN THE LEASE-OPTION IT'S STILL NEGOTIABLE POTENTIALLY. THE OWNER WOULD MOST LIKELY HAVE OUTRIGHT SOLD THE PROPERTY IF THEY COULD HAVE INSTEAD OF USING THE LEASE-OPTION. ALTHOUGH NOT ALWAYS THE CASE - THE OWNER PROBABLY WOULD HAVE SOLD THE PROPERTY BUT COULDN'T. AS SUCH, YOU PROBABLY HAVE SOME LEVERAGE IN YOUR NEGOTIATIONS BECAUSE OF THAT.

and 2) can the specifics of whether the seller or buyer pays a specific fee be part of this contract? The lender currently assumes that I as the buyer am responsible for all closing fees in their Good Faith Estimate.

YES, A SPECIFIC FEE CAN BE STATED IN THE SALES/PURCHASE CONTRACT. SOMETIMES THE BUYER NEGOTIATES THAT THE SELL PAY A SUM TOWARDS THEIR CLOSING COSTS (ie. $5k towards their closing costs).

THE SELLER WOULDN'T WANT TO GET INVOLVED IN YOUR LOAN - BUT THINGS YOU COULD NEGOTIATE:

that they pay a sum towards your closing costs
that they pay the transfer fees entirely
that they pay for the inspections

THOSE OTHER COSTS PREVIOUSLY MENTIONED ARE YOUR LOAN COSTS - THEY ARE ONLY NEGOTIABLE WITH THE LENDER.

Fees charged for obtaining a mortgage
Homeowner's insurance
Title insurance and settlement fees - those are things your lender will require
Property taxes - the lender will requuire you prepay so much of the property taxes
Insurance - the lender will require you to prepay the insurance



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Law Pro, Lawyer
Category: Real Estate Law
Satisfied Customers: 23657
Experience: 20 years extensive experience in real estate law, foreclosure, finance, and landlord tenant law.
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