Vail Daily column: Who pays fees in real estate transaction? | VailDaily.com

Vail Daily column: Who pays fees in real estate transaction?

Joan Harned

Dear Joan,

We just chose a property to purchase and we are working on making a written offer with our Realtor. Our Realtor has asked us a lot of questions and given us suggestions on how we make the offer. My question is about all of the little (yet significant) fees in the contract. She has said we need to pay for some and some we can ask the seller to pay. Why would we offer to pay any of them? Why wouldn't we ask the seller to pay for every fee?

Dear Fee Concerned,

Your question is not only a clerical and economic question, but a personal, negotiating issue. It sounds like your Realtor may be giving you good advice. First, by my count, there can be as many as nine different fees that need to be decided, or requested, in your offer. In my opinion, these nine have to do with who pays for:

• Appraisal

• Title insurance

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• Owners extended coverage

• Survey

• Closing costs

• Local and/or private transfer fees

• Water transfer fee

• Sales and use taxes

• Special assessments

There is some logic and some local custom used in making these decisions, as well as correlation to a strong or weak offer. The logic part is that the buyer pays for the costs associated with getting their loan, such as the appraisal and, arguably, the survey. Sometimes the survey is considered a seller expense because they need to prove that they in deed own the land and improvements they are selling. The sellers pay for costs that are considered their responsibility, such as title insurance (to prove they have clear title to the property), extra coverage for the buyer on the title insurance, and any existing special assessments that are already known. Then, customarily in our area, the closing costs are split as well as the transfer tax. I think the transfer tax is most often split because no one likes to pay it and it is a little more palatable if you only have to pay half. However, if you make a low-ball offer, then it will look more attractive if you offer to pay all of the transfer tax, and it will be considered an insult if you do a low offer and then ask the seller to pay all of the transfer tax.

The water transfer fee and sales and use taxes seldom come into play, and when they do, it usually is acceptable to split the costs, depending upon the offer and circumstances.

Therefore, I would not suggest asking the seller to pay all of the fees, which can be significant, unless you make a very strong monetary offer, and even then, the sellers won't like bearing the whole burden. Presuming you have a knowledgeable Realtor, I would follow their advice. Perception counts! You want to look like you are making a strong offer that is fair and not insulting, if you truly want to own the property. Good luck on your negotiations!

Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years, is a past chairman of the Vail Board of Realtors, past Realtor of the Year, past director on the Great Outdoors Colorado Board and a member of the Luxury and Land Institutes. Contact Harned with your real estate questions at Joan@TeamBlack Bear.com, 970-337-7777 or http://www.Ski AndTeeHomes.com.