What Are Abstract and Recording Fees?

A wide range of fees come with purchasing a home or any real estate. Most people are aware of the big ones, including the down payment, property taxes and the possibility of private mortgage insurance. The fees are fairly self-explanatory, but closing costs encompass so much more. Take a look at what abstract and recording fees are and why you need to pay them. 

What Are Abstract Fees?

Abstract fees in real estate refer to a summary of the search title. This summary goes back to the property’s origination and pulls together all of the public records on the property. It also includes a short property description and a chain of ownership based on the titles that have been issued on the house. 

Why Do You Need to Pay Abstract Fees?

It’s important to have a history of the property before you close on your new home. Searching public records can help establish a chain of ownership and find outstanding liens on the house. The summary that comes from this process does not guarantee the title —  nor does it provide title insurance — but it is an important step to understand and protect the ownership of the property. 

How Much Are Abstract Fees?

The cost of abstract fees is based on a few factors, including where the home is located. The complexity of the search through public records can also impact the cost. Typically, the cost for abstract fees is relatively minimal, with most buyers paying less than $500 for the process. 

What Are Recording Fees?

Recording fees are the expense of registering or recording the purchase of real estate. This process is what makes the sale and new ownership of the property become public record. Recording fees are charged by government agencies — usually by the county the property is located in. 

The types of documents that require a recording fee include:

• Mortgages
• Deeds
• Discharges
• Assignments
• Release of mortgages
• Power of attorney
• Tax releases 

Why Do You Need to Pay Recording Fees?

Recording fees are an expense that comes along with other important closing costs. Paying for recording fees makes it possible for the county clerk’s recording agents to complete the documents of the real estate transaction. 

How Much Are Recording Fees?

The rate for recording fees is set by the county or other government agency. They are typically priced either per document or as a flat fee. In most cases, buyers will pay less than $150 for the recording fees during the closing process. 

How Can You Verify That Abstract and Recording Fees Are Legitimate?

The real estate industry is not immune to scammers. But you can take steps to ensure that all of your closing fees — including abstract and recording fees — are legitimate. The most important thing to do is to make sure you are working with reputable professionals whom you trust. This can include real estate agencies, real estate attorneys and title companies. You should establish a relationship with your trusted professionals ahead of time and be sure to communicate with them. They will be able to confirm any fees and answer the questions that you have about them before you make any payments. 

When you are purchasing a home, you will receive a few documents you can use to help verify fees as well. This includes your loan estimate and a closing disclosure. Both of these documents are useful because they include details about your closing costs, including abstract and recording fees. They also include your mortgage terms, including your interest rate and estimated monthly payments.

Lenders are required to provide you with the loan estimate after you’ve applied for your mortgage and your closing disclosure at least three business days ahead of your closing date. When you receive the closing disclosure, you should compare it with the loan estimate to ensure that the terms and fees are the same. 

You can take a few other steps as well. It can be a good idea to limit the amount of information you provide via email. You should also be careful about phone calls — if you receive a call asking for financial information, be sure you confirm it is from a legitimate source. You can always hang up and call back the official number for the company in question or call your contact directly to provide your information if you are unsure whether you can trust a call you receive. 

Who Pays the Abstract and Recording Fees?

In most cases, the buyer will pay for both the abstract and recording fees. The fees are part of typical title fees that all buyers should expect to pay as part of the closing costs. In some cases, a buyer might be able to negotiate with the seller to have them cover part of the fees. Buyers are within their right to ask the seller to pay for abstract and/or recording fees, but it’s important to be aware of the market before asking for any seller concessions.

What Happens if You Don’t Pay Abstract and Recording Fees?

Abstract and recording fees are part of the closing costs a buyer can expect to be responsible for paying before closing on the home. If the abstract and recording fees are not paid, the buyer will not be able to close on the home and receive the keys. A few other possible consequences could occur as well. The seller may be able to sue you for damages or for enforcement of the contract, although this is not allowed in every state. The seller may also be able to take your earnest money deposit for breach of contract. Additionally, the seller may be able to cancel the contract because of a breach of contract. 

Other Title Fees to Pay at Closing

• Title search fee
• Title closing fee
• Title insurance fees
• Attorney fees
• Title indemnity fees
• Title endorsement fee
• Notary fee
• Junk fee

Paying for Abstract and Recording Fees

Because abstract and recording fees are one part of a range of closing costs, you don’t need to worry much about finding the appropriate time and place to pay them. When you receive your loan estimate from your mortgage lender, you will be able to review your closing costs, which should include the abstract and recording fees. The most important thing is to understand that these fees are necessary to a successful real estate transaction. It’s also important to have a trusted real estate attorney and/or real estate agent by your side to help you navigate the closing process.

Frequently Asked Questions