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If you recently applied for a mortgage, you might have noticed a “recording fee” listed among the closing costs in your Loan Estimate. Though this fee typically won’t put a serious dent in your bank account, it’s still worth understanding how recording fees work so you know what to expect on closing day.
Dig deeper: Closing on a house — what to expect and how to prepare
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A recording fee is an expense charged by state and local government agencies for recording or registering a piece of real estate’s transfer of ownership. When the documents are recorded, they become part of the public record. In other words, this fee ensures that the deed, mortgage, and legal documents related to the property purchase/sale are recorded in the public records.
Recording fees are considered a closing cost typically included in the Loan Estimate, which you receive within three business days after submitting your loan application.
Simply put, recording is the process of making real estate documents part of the public record to provide a traceable chain of title. During this process, a recorder will date and stamp the documents and enter them into public records. The public can then access these records to verify a property, which helps prevent fraudulent real estate transactions. Government agencies generally charge a fee to provide this service, which is the recording fee you’ll pay at closing.
Many types of real estate documents can be recorded, including house deeds, deeds of easements, and notices of foreclosures.
Read more: How long does it take to close on a house?
The cost of recording these documents is typically based on the number of pages being recorded and the county where the property is located.
Most counties charge a higher recording fee for the first page of a document and a lower cost for any additional pages. For example, if you have a two-page deed that needs to be recorded in Multnomah County, Ore., you’ll pay a recording fee of $86 for the first page, while any additional pages are $5 each. This means your total would come out to $91.
Recording fees aren’t always this steep, though. In other places, like Canadian County, Okla., the recording for the first page of a real estate document is only $18, and the cost of each additional page is just $2.
Learn more: Cash to close — What you’ll owe on closing day
Recording fees are necessary because if real estate transactions aren’t properly documented, they could lead to issues down the road, such as homeownership disputes and the priority of liens.
The recording process helps home buyers establish proof of ownership and protect their investment in the property. For sellers, this process officially releases their ownership of the property, removing any lingering claims or complications after the sale.
For lenders, recording a lien with the local county is crucial since it gives the company the right to claim a property as collateral if the homeowner fails to meet their obligations, such as making mortgage payments on time. If a lien isn’t recorded, the claims of other creditors on the property may take precedence and put the current mortgage lender’s investment at risk.
If you don’t pay closing recording fees, you could run into dispute issues in the future due to the lack of records for your real estate transaction. Most mortgage lenders require you to pay recording fees before they finalize your loan. Some lenders may allow you to roll the costs into the loan if you can’t afford to pay your recording fee and other closing costs upfront.
Read more: How much money do I need to buy a house?
In most cases, buyers are responsible for most closing costs, including recording fees. And though you may be able to negotiate some closing costs with the lender, like the origination fee and title insurance, recording fees typically can’t be negotiated.
Your title company or lawyer will help deliver your real estate documents to your county’s recorder’s office. Then, a recorder, county clerk, or another official will handle the rest of the recording process.
Recording the deed to a property typically takes at least 14 days, but depending on the circumstances, it could take up to a few months.
No. Some closing costs, such as property taxes and mortgage discount points, may be eligible for tax deductions, but recording fees are not.
This article was edited by Laura Grace Tarpley.