Definition of "Escrow fees"
The escrow fee is basically how the escrow agent or manager get his/her compensation for assisting and handling both the parties and the funds involved in escrow.
In real estate, the escrow fee is considered part of the Closing Costs and, because it’s in both parties best of interest, it can be split by the Home Seller and the Home Buyer, but there are some cases where the Home Seller or the Home Buyer will handle it by him/herself. Usually, this decision follows local customary practices, so ask your real estate agent – who usually oversees the escrow for you anyway – how is it usually done regarding who pays the escrow fee.
Now, the amount you (and/or the other party) pay for it is determined by the escrow agent and is negotiable - especially if you are in a competitive real estate market. But if there is an “average” cost of escrow fee, it would be of 1 to 2% of the price of the house entering escrow.
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