Is a buyer in a real estate purchase and sale responsible for any fees in NY state

Normally, the good faith estimate is just an estimate from the mortgage provider. For the fees that are third party items, they are guessing. In some cases those are educated guesses, in some cases they are incorrect.

A title search is not provided by the lender. You are free to shop around for this service, and if you do not already have a sales contract, you can try to negotiate that into the obligations the seller will take on. However, in most areas there are customary ways these are handled between buyers and sellers, so if it is normal that the buyer pay for it, it may be difficult to get the seller to take it on.

You should contact a local real estate attorney and get an estimate of what their charges will be to handle the transaction. They can also explain to you what reasonable charges are for the other third party items, and may be able to recommend providers who they know to be reputable and reasonable.

The Good Faith Estimate is usually prepared by the bank lending you the money for your purchase. The bank usually requires title insurance (not just a title search) and $3,800 in insurance would be approximately what a $300,000 owner policy and mortgage policy might be. If you are trying to limit closing costs, ask your attorney if the title insurance includes an owners policy. If it does, ask him or her if it is something that might be waived. Depending upon the condition of the title to the property, this is something you may not want to do. An owners policy would protect you, years from now, if it turns out that through forgeries, mis-indexed or mis-recorded documents, etc., someone other than you has ownership rights to your home.

Which party pays what closing costs is not set in stone (unless you and the seller have already agreed by signing a contract of sale). I have had many transactions where the seller, for various reasons, has agreed to pay the purchaser’s title insurance premiums. Note that this may be characterized as a seller’s concession and may affect, in a small way, the total amount your bank is willing to lend to you.

A title search cannot cost $3,800. However, title insurance, which protects you and your lender that you have valid legal title to the property can cost that much and more. The fees are set by state law. I would highly recommend that you purchase this insurance and not try to cut this as a cost.

In addition to title insurance, there are a number of fees that a buyer of real estate has to pay in connection with the purchase. There are certain other costs that a seller is responsible for. Although one party is typically responsible for their respective fees, virtually anything can be negotiated. As a buyer in a seller's market, you can try to negotiate to have the seller pay certain costs. This would be easiest done by lowering the price. If this is done by what is commonly known as a seller's concession, you must be careful to structure it properly to avoid any potential fraud claims. Also, banks may be very wary of a seller's concession as it is a contributing cause of the problems they are now facing.