Check All Fees Before Signing Off on the Deal

Here are some ways consumers can protect themselves from paying extra fees when buying or selling in a common-interest development:

* Purchase agreements, sales agreements and deposit receipts used by real estate agents to convey offers to purchase, or for counteroffers, are legally enforceable contracts. Do not sign them until you have read the documents completely.

* Fill in all the blanks and check off all the boxes before signing. Be especially cautious about terms requiring the payment of fees. If you do not understand those terms or the explanation is unsatisfactory, cross those terms out before signing.

* Whether it’s well-meaning or unscrupulous, blank boxes are sometimes mysteriously filled in after the agreement is signed. Prevent that by ensuring that all boxes are either checked or crossed out and that any requirement for payment of fees either includes the exact amount to be paid (naming the entity responsible for paying), are marked “N/A” or are also crossed out.

* Write “N/A” on each blank line or insert a dollar-amount limit of what you are willing to spend. Cross out any sections with blank lines that are not used for your offer or counteroffer.

* On the documents titled Residential Purchase Agreement and Joint Escrow Instructions and Counter Offers, scrutinize everything listed under Escrow, Title and Other Costs. Look for the phrase: “Buyer or Seller shall pay HOA transfer fees and document preparation fees.” Refuse to pay these fees, or obtain and insert the exact fee amount and agree to pay it by signing the contract.

* Stop any fees being charged by writing a contingency clause into the contract that requires your written consent before any escrow fee can be charged to you. Later, when fees are discussed, decide at that time whether or not to pay them.

* Before you sign, ask what fees the escrow company will be charging and whether there is any way you can avoid them, have someone else pay them or write a less expensive method into your contract. Look for and thoroughly question each and every fee charged by the escrow company, including draw deed fees, processing fees, wire fees, transfer fees, express mail fees and forwarding/demand fees.

* Do not accept instructions from a real estate agent to just “look this over, then sign it” or that “this is just the typical agreement that everybody signs.” There is no “typical” agreement. Buyers and sellers need to know what fees are being charged and what those fees are for. The legal effect of leaving lines blank is the same as signing a blank check.

* Always insist on receiving a copy of every document you sign at the time you sign it.