Escrow fees don't have to be confusing. Learn what you should expect to pay, what services are included, and how to avoid surprise charges at closing.
Table of Contents
Common Escrow Fee Structures
Escrow fees typically fall into two categories: one-time setup fees and ongoing servicing fees. Setup fees cover opening your account, processing initial documents, and establishing your records. Servicing fees cover the ongoing work of accepting payments, managing disbursements, handling tax and insurance bills, and maintaining your account. Some companies charge flat fees; others use percentage-based pricing.
What Should Be Included
A quality escrow company should include these services in their standard fees: payment processing and disbursement, complete transaction record-keeping, annual 1098 tax form generation, online portal access, and basic customer support. Watch out for companies that charge extra for basic services like sending statements or answering questions about your account.
Red Flags: Hidden Fees to Watch For
Unfortunately, some escrow companies pad their revenue with hidden fees. Watch for: document preparation fees (separate from setup), wire transfer fees (especially high ones), statement fees, phone support charges, account access fees, and minimum balance requirements. Always ask for a complete fee schedule before signing up, and get it in writing.
How to Compare Escrow Costs
When comparing escrow companies, look at total cost of ownership over the life of your escrow. A company with low setup fees but high monthly charges might cost more than one with higher upfront costs but lower ongoing fees. Also consider the value of services: 24/7 online access, professional tax and insurance management, and responsive customer service are worth paying for.
Conclusion
Understanding escrow fees helps you make informed decisions and avoid surprises. At Sunwest Escrow, we believe in transparent, upfront pricing that you can understand without an accounting degree. No hidden fees, no surprise charges, just honest service from a company that's earned its A+ BBB rating. Contact us for a personalized quote.