Recording fees, defined and explained

As part of the loan closing process, you might run into a few costs that you didn’t realize were a requirement. Recording fees might be one thing that you didn’t expect to find among your various closing costs.

Recording fees might bring to mind a struggling band that scraps funds together to record their first song in a studio. Don’t worry! No one will be recording an audio transcript of your closing.

So, what is a recording fee in the context of buying a house? Let’s find out!

What are recording fees?

Recording fees are a charge required by state and local agencies for registering a property’s transfer of ownership. These fees are a part of the bundle of expenses that are typically referred to as closing costs.

How much are recording fees?

The recording fee is charged by the county in which the real estate transaction takes place. With that, the cost of recording fees will vary from county to county.

An additional factor is the size of the document you’re filing. You will likely pay more in recording fees for a more complicated and lengthier document concerning the sale of your new home. For example, you might pay a $50 fee for the first page of a land record instrument, and then $10 for each additional page after that. The total cost of recording fees could range from a few dollars to hundreds based on the laws in your county.

On average, home buyers pay $125 for recording fees at closing, according to the Home Buying Institute. Since closing costs can add up quickly, it’s a good idea to plan ahead for these fees.

What kinds of documents require recording fees?

Local governments have a responsibility to record a wide range of documents surrounding real estate transactions. These documents include the following:

• Mortgages
• Affidavits
• Changes of title
• Deeds of trust
• Bills of sale
• Liens

Although it can be an inconvenience to pay the recording fees, these records help facilitate the legal process of homeownership. Without a record of sale at the local government office, you could run into ownership disputes down the line.

Who pays recording fees?

In most cases, the buyer will pay the recording fee.

However, it is possible for the seller to cover the recording fees for the transaction. If you want to go that route, you’ll need to negotiate this cost as a part of a seller concession. If the seller agrees to cover this cost, then you won’t have to worry about this fee eating into your budget.

What happens if you don’t pay your recording fees?

If you are taking out a mortgage to facilitate your homeownership transaction, then you will likely be required to pay for the recording fees. Most banks will not finalize a mortgage loan until the county has recorded the purchase.

Even if you aren’t required to pay for recording, you absolutely should.

Without a record of the real estate transaction, you may run into an ownership dispute in the future. After all, the previous owner will likely still be the owner on record at the county offices. With that, you could be drawn into a legal battle to prove that you actually own the home.

After spending so much time and effort on the closing process, don’t skip this step!

Can you pay recording fees online?

You may be able to pay your recording fees online. However, this functionality will depend on the county you live in. In some cases, you may not be able to pay for your recording fees online.

Consider calling the county records office to learn more about your options.

Are mortgage recording fees tax deductible?

Although some closing costs are tax deductible, most closing costs are not. Recording fees are not an exception to this rule. With that, you won’t be able to take a tax deduction for your recording fees.

The bottom line: Paying recording fees makes your homeownership official

Recording fees are an essential part of the closing process. If you skip this step, you may run into an ownership dispute in the future due to the lack of records for your real estate transaction.

Once you have a better idea of the types of closing costs and the expenses associated with securing a mortgage, you can get a head start on financing your home purchase. Take action and start your mortgage application with the Home Loan Experts at Rocket Mortgage^®.