We sold our rental property last week. The proceeds were deposited in my account the following day. All good.

Except, today, I get an e-mail from the title company.

*Good morning Ivylass,

I hope you enjoyed your weekend and all is well. When the final CD was drawn up by the lender the $299.00 transaction fee was not included. Can you please make a check payable to (Real Estate Company) and forward it to our office? This will balance the file. Thank you! Should you have any questions please do not hesitate to contact me.

Best regards,
Title Company

This sounds odd to me, and I have texted my realtor about it to weigh in. As far as I’m concerned, my paperwork says I was to receive $X, I received $X, and any shortfall from the lender is not my problem.

Has anyone heard of this before?

I don’t know anything about who should be responsible for paying that fee. Having said that …

When we sold our house in August the paperwork got messed all the heck up. The details are fuzzy now, but we definitely requested complete paperwork on the transaction, to compare the theory and reality of what money had ended up where.

I’d trust a title company before I’d trust a realtor. But I’d still ask for documentation before I paid.

My realtor confirmed it’s not a scam and asked me to call the title company.

I told her no and repeated what I said in my OP. She said no worries, she’d handle.

The lady at the title company took the time to go line by line over the paperwork, explaining each item. So if there was a transaction fee it should have been included.

You’re either contractually obligated to pay that fee or not. So do what you’re doing, make them prove you are obligated. It’s their problem at the moment.

Not a scam, but not your problem.

There could be a tiny element of scam here.

They feel entitled to another $299, which they apparently were not careful about collecting at the correct time. If they send out a request to one (or possibly both?) parties to the transaction, there’s a decent chance that they’ll receive a check. Maybe it will come from the party that actually owes it, maybe not - but does that really matter to them?

It doesn’t seem like they could include the $299 after the fact. Isn’t the whole point of the CD to let you know what fees you’ll have to pay? It seems you could argue that you used the fee information to decide which title company to use. Now when they add a fee after the fact, you don’t have the option of using a different title company.

I don’t think it’s a scam. I think someone screwed up and hoped you’d just send in a check. I think they should be the ones to take the loss on it.

It’s unclear in your OP if its the real estate company for asking for this or the title company. Transaction fees are often added to a seller’s costs as an additional line item of profit for the real estate company. The rationale is that basically this is their bookkeeping and office cost for doing the deal. There should be some notice of the transaction fee in the listing you signed that allowed your property to be marketed. If you signed that listing and it acknowledges the transaction fee you owe the amount. If there is no notice of a transaction fee and no notice was put on the settlement sheet by the title company they are SOL. Look at your listing paperwork if it is applicable it should be referenced in that document or an attached document to the listing.

The e-mail was from the title company, but they want me to write out a check to the realtor.

If I did owe this money, it should have been included in my proceeds. In any event, I’m not paying it.

Here’s what’s happening then. It’s an internal housekeeping charge from the real estate company who did the transaction. The Realtor or the Title company forgot to add it to the settlement sheet as a charge to the Seller. If you tell them you are not paying it the chances of them pursuing it are fairly slim given it’s a relatively minor amount and pissing off Sellers is not the way to get future business. The Agent may or may not have to come out of pocket to the Broker for the fee but that’s their internal business.

If they want to be aggressive about it and you signed the listing with it referenced you could legally be forced to pay it. Just because it was not on the settlement sheet as an oversight does not mean you don’t owe it.

Actually, I’m pretty sure that if it wasn’t ever disclosed, throughout the process, they won’t have to pay it. They can, as an act of goodwill, but there’s no legal obligation, as this is now the first they’ve heard of it, post-closing.

Not sure if the new CPRB rules adjust this (from October of last year), but they are very “consumer-friendly,” and put the burden on the title company, bank, realtor, etc.

Most likely, they’d consider it a “hidden fee,” that would be legally unenforceable to collect.

It was missing from your final CD, but was it on your Loan Estimate? Or any other CDs issued prior to close?

I didn’t buy the property. I sold it. Ergo, no loan for me.


Doesn’t matter. The CD will invariably include an integration clause.

What definitely sounds odd to me is the tone of the letter. A business letter asking for money usually looks more like an itemized bill than a chatty, personal letter.
When you go to the doctor or take your car to a muffler shop, you don’t get a note asking if you enjoyed your weekend, and oh, bytheway, would you “please” write a check and forward it to us?

I know nothing about how the realtor business works, so I have no idea if the fee is legit or not.
But if you owe money for services rendered, a business letter normally says so directly.
This letter sounds more like a Nigerian prince.(but one who knows good grammar :slight_smile: )

It’s probably not a scam; but it sounds like they know they can’t legally require you to pay them.

Emphasis mine, in astro’s post.

He never said that it would be enforceable if it had not been disclosed. He said, explicitly, that if the fee had been in the original listing, and the OP had signed the listed with the fee referenced, then the OP could be forced to pay the fee.

I believe astro is arguing that, if ivylass signed a piece of paper (all the way back when she listed the property) that included a $299 transaction fee, the fact that this fee was accidentally omitted from the final CD does not relieve her of the obligation to pay the fee. He is not saying that she is obligated to pay a previously-undisclosed fee.

I’m merely offering the counterpoint. Just as, if it was previously referenced, there may be a legal obligation, I want to make sure she knows that if it wasn’t, then she isn’t.

Also, with the changes with CFPB changes of 10/15/15, it’s still a nebulous area. A lot of institutions, realtors, etc., are interpreting the laws as placing much more responsibility on the professionals, and protecting consumers. I know of a few instances where there’ve already been some mistakes made, and the bank has eaten the costs, having chocked it up to the learning curve.

We won’t know how it all will suss out for a while. The new regulations were created, in part, to deal with this exact situation. That’s why the CDFs are so important now.

Given the language of the initial communication, I think that the title company isn’t sure, either, and that’s why they are trying to catch more flies with honey than vinegar. I’m willing to bet, end of the day, they’ll just chock it up as a business loss.

I feel uniquely qualified to answer this question, as, until about a month ago, I was an attorney in Florida (where I believe Ivylass still resides) conducting real estate closings in the same capacity as a Title Company, and I know lots of realtors, too. Plus, I just sold my house.

The answer to the OP: No, it’s not a scam. But it’s a breakdown in communication between your realtor and the title company that caused the title company to make the mistake.

When Ivylass started the transaction, she met with a realtor who would market her home and be responsible for the showings. Before that realtor began, though, she or he made Ivylass sign a Listing Agreement, which is a written contract for these responsibilities, in exchange for a commission based on the price of the home (usually 6%, which is customarily split in half with the Buyer’s realtor).

It has also become increasingly common to also include a transaction fee, which is a fee that the realtor’s office collects for their overheard, or somesuch. And $299 sounds about right.

If Ivylass truly owes the fee, it dervies from this document. She can review the Listing Agreement to confirm the debt.

As to why the title company called post closing, and the rest?

Well, the realtors are usually eager to convey their expected commissions to the Title Company (who creates the Closing Disclosure, or CD, that shows who gets what, and who also distributes the money). And it is customary that the Title Company distributes a draft to the realtor to review primary to closing; most realtors request it quite aggressively. So it’s a shock that it was missed.

But in this case it sounds like the Title Company sent a check to the realtor’s office, who called Title and told them, “you forgot my transaction fee.” D’oh! Cut to, some noob is calling Ivylass to ask her to cut a check, because her take should have been less based on the transaction fee going to her realtor.

But it also really sucks when you finish a file and you don’t have the money balance down to a penny (these people are audited!), so somebody felt like shit that day, I promise you. And based on the OP’s reaction, they probably should have just eaten the fee and moved on.

As to the CFPB changes, it is important to remember that they don’t define the Seller as a “consumer”; the CD is designed to protect the borrower on a mortgage loan. There’s not even really a Seller signature line on the long form; it’s all about disclosing the cost of financing a home. The Seller is lucky to get a one page summary of the transaction.