I have experienced a few surprises at the closing table recently and I thought I might blog about it here on this website. It seems that a new trend in real estate is hidden fees at closing.
Usually for a new home in Southwest Florida there is a commission of 6-7% that is generally split between the buying agent and the selling agent. This commission is evidently not enough for some real estate companies as they have decided to charge their customers an extra $250 to $400 “Documentation Fee” or “Transaction Fee.” This fee will show up whether you are buying or selling with most of these agencies, and if you use that same agent to both list and sell your property, you can get hit with the fee twice!
When asked to explain this new fee, your agent will normally tell you it is for preparation and storage of your closing documents. If this is the case, what is the rest of the commission for? On an average 250k dollar home the commission before splits can be as high as $17,500.00. Is this not enough money to prepare and store your documents? You would think that these real estate companies could surely pay their document storage fee out of this commission. How much does it cost to store a folder of paper nowadays?
Don’t blame the individual agents though…well not too much at least. The only mistake the agents are making is working for a company with policies like this. In my experience if the buyer or seller refuses to pay the “documentation fee,” the broker will take it out of the poor agent’s commission.
I urge everyone to ask their agent up front what their fees will be so that we can get this nasty trend stopped before it gains too much of a foothold. PROGRAM Realty never has and never will charge any of these ridiculous fees to our buyers or sellers! Our only fees come from the percentage commission that is pre-agreed upon when the listing is made and is paid only by the seller in a transaction.
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