HOA – Hidden Fees

Posted: February 26, 2008 in General
Tags: , , ,

Peek-a-boo This may be old news to some of you, but it certainly wasn’t to our client. It was a total SHOCK!

Last Thursday once of the agents that I work for had a closing. I showed up at the Title Company for a totally different reason than this particular agents closing, but I happen to be there nonetheless. Suddenly the door opened up where they were closing and the agent says, “Dustin, come here! I need an answer.” Needless to say I was taken aback and wondering what the issue was.

When I walked into the closing room I saw a very disgruntled client and an agent looking at me like, “Um, what in the world is this???” He pointed at the HUD Statement to line 1305. Guess what was there – a fee from our beloved management company in the amount of $315.00 charged to the Seller.

Ok…and? Some of you may be saying, “Ok, and what significance does this have? I mean, they do have to pay the HOA fees and what not!” True enough. However, this $315 fee was ON TOP OF the transfer fee AND the resale certificate that they had paid $185 for. So, in addition to the $100 transfer fee and the $185 resale certificate fee, they were charged an “origination fee” (yeah, can you believe it). Unbelievable!

Some of you may be thinking what I was thinking, i.e. this is something that they cannot do. I took the issue up with our risk manager. He pointed me to the TREC addendum about a mandatory HOA. In that promulgated form it says something to the effect of “The Seller will pay whatever fees our highway robbery operation decides to charge at our leisure.” Yes, it’s really there.

My advice – look very carefully at the HUD. I’m going to be scrutinizing them very, very carefully from now on. I will also be encouraging all of my agents to do the same. Has anyone experienced anything like this?

Have a great evening.

Dustin Curlee…

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Comments
  1. Kathy says:

    Is there a “location” (web or otherwise) where we can find out UP FRONT what the fees are for transfer, highway robbery, etc that the mgmt company is charging? It has been my experience that there is no place to locate this info in advance, and by the time you get to the HUD, it’s too late to protect your seller.

  2. Dustin Curlee says:

    Kathy,

    There’s really no way to find out the fee until you get the HUD. I’ve combed through the various websites, to no avail.

    If you call and ask if there will be any fees on the HUD in addition to the ridiculous amount that the client has already had to pay, then they will act surprised and say no. But then you will get the HUD and – voila!

    It’s really a matter of being very careful to go over the HUD.

    Dustin…

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