Worksheet_Escrow Fees

In plain language: Identifies the buyer, seller, escrow company, escrow officer, lender (if any), and the property or asset subject to the escrow transaction.

Common mistake: Using informal names or nicknames instead of full legal names — this causes title recording errors and may delay disbursement if identity cannot be verified.

In plain language: Lists all charges assessed by the escrow company itself — escrow opening fee, document preparation, wire transfer fees, and the base escrow settlement fee — specifying which party pays each.

Common mistake: Showing only a single lump escrow fee without itemization — regulators and lenders in most jurisdictions require each charge to be separately disclosed.

In plain language: Itemizes charges from the title company for the title search, title insurance premiums (owner's and lender's policies), and government recording fees for the deed and any new mortgage.

Common mistake: Omitting the lender's title insurance premium, which is a separate required charge from the owner's policy and must appear on its own line for TRID compliance.

In plain language: Captures all charges imposed by the mortgage lender — origination fees, discount points, appraisal, credit report, flood certification, and tax service fees — allocated to the borrower-buyer.

Common mistake: Listing lender fees without confirming they match the Closing Disclosure tolerances — charges in the zero-tolerance category cannot increase at all between the Loan Estimate and closing.

In plain language: Calculates the proportional split of recurring costs — property taxes, HOA dues, homeowner's insurance, and rent credits — between buyer and seller based on the exact closing date.

Common mistake: Using an estimated tax figure instead of the actual county-assessed amount, resulting in a proration error that must be corrected post-closing — sometimes requiring a supplemental tax escrow.

In plain language: Details the initial deposit required to fund the lender's impound account for future property tax and insurance payments, calculated as a specified number of months' reserves.

Common mistake: Failing to include the aggregate adjustment line, which federal Regulation X (RESPA) requires to prevent over-collection of impound reserves beyond the two-month cushion maximum.

In plain language: Lists the payoff amounts for any existing mortgages, home equity lines, judgment liens, or mechanic's liens that must be cleared from title before or at closing.

Common mistake: Using a payoff quote that has expired — payoff figures are typically valid for 10–30 days, and using an outdated figure can leave a residual balance that prevents title from clearing.

In plain language: Reconciles all charges and credits into separate debit and credit columns for the buyer and seller, producing a single net amount each party owes or receives at closing.

Common mistake: Presenting a combined rather than separate buyer/seller ledger — each party must see only their own column to avoid disclosing the other party's financial position, which is both a privacy issue and a professional standard.

In plain language: Confirms that all parties have reviewed the fee worksheet, approve the figures, and authorize the escrow officer to proceed with disbursement on the stated terms.

Common mistake: Obtaining only one party's signature before disbursing — both buyer and seller authorization is required, and disbursing without a signed acknowledgment from all parties exposes the escrow company to liability.

An escrow fee worksheet is a structured document that itemizes every charge, credit, and disbursement associated with an escrow-managed transaction — most commonly a real estate closing. It shows the buyer's total cash required, the seller's net proceeds, and the allocation of every cost between the parties. Both parties sign it to authorize the escrow officer to release funds on those exact terms.

The allocation depends on the purchase contract and local custom. In many US markets the escrow fee is split 50/50, while in others the seller pays the full amount. Title insurance premiums follow different conventions by region — in Southern California the seller traditionally pays the owner's policy; in Northern California the buyer typically pays. The worksheet reflects whatever the parties negotiate in the purchase agreement.

The Closing Disclosure (CD) is a federally mandated form required for most residential mortgage loans; the lender must deliver it at least three business days before closing. An escrow fee worksheet is prepared by the escrow or title company and may include line items — seller payoffs, commissions, and HOA transfer fees — that do not appear on the lender's CD. Together, the two documents provide a complete picture of all transaction costs.

Proration is the proportional division of recurring costs — property taxes, HOA dues, homeowner's insurance, or rent — between buyer and seller based on the closing date. If the seller has prepaid a cost that covers a period after closing, the buyer reimburses the seller for that period. If property taxes are paid in arrears and the seller owed taxes through the closing date, the seller credits the buyer for that accrued amount. The result appears as a debit or credit on each party's column.

An escrow holdback is a portion of the seller's proceeds withheld in escrow after closing — typically to fund a required repair, cover a post-closing indemnity claim, or satisfy a lender condition. The holdback amount, the condition that triggers release, and the release deadline must be documented in a separate holdback agreement or addendum referenced on the escrow fee worksheet. The worksheet shows the holdback as a debit to the seller's net proceeds column.

Some fees are fixed once disclosed, while others can change. Under TRID rules, certain lender-charged fees have zero tolerance for increase (origination charges, for example), while others can increase up to 10% in aggregate, and still others are open to change. Escrow company fees and title charges can increase if a valid change of circumstance is documented. Any increase beyond tolerance limits requires a lender cure credit at or before closing.

Once signed by buyer and seller, the worksheet constitutes authorization for the escrow officer to disburse funds on the stated terms. It is generally enforceable as part of the escrow instructions. However, it does not replace the purchase contract or the mortgage loan documents — it implements the financial terms of those agreements. Disputes over worksheet figures are typically resolved by reference to the underlying purchase contract and closing instructions.

Any discrepancy between the escrow worksheet and the Closing Disclosure must be resolved before closing. If a lender-controlled fee increased beyond its tolerance, the lender must issue a revised CD and, in some cases, restart the three-day waiting period or provide a closing credit. If the discrepancy is in an escrow or title charge not subject to TRID, the parties negotiate a correction or the escrow officer adjusts the worksheet. Disbursing with unresolved discrepancies can create liability for the escrow company and the lender.

The template covers the core components common to both residential and commercial escrow closings. Commercial transactions often include additional line items — tenant rent prorations, assumption of commercial loan fees, environmental escrow holdbacks, or 1031 exchange accommodator fees — that may require supplemental schedules. For complex commercial closings, have a real estate attorney or commercial title officer review the worksheet before it is sent to the parties.