Thursday, November 18, 2010

Transaction Fees: To Pay or Not to Pay?

I was recently asked by a client if I charged a transaction fee.  At Sandals Realty, we do not charge a transaction fee to buyers or sellers. 

A transaction fee is an add-on, instituted by the major franchise brokerages like Coldwell Banker, Century 21, Re/Max, and the like, as an additional revenue stream in the face of shrinking profit margins and increasing costs in a challenging real estate market.

Transaction fees only go to the bottom line of the real estate company. They do not serve a purpose to the customer or to the real estate agent. In my opinion, transaction fees are junk fees. They are like "processing fees" at a car dealer, or on a mortgage.   If you were shopping for a car, you would ask about any fees the dealer charged and could possibly eliminate before your purchase.  Same thing with real estate.

As a real estate consumer, you should NOT be asked to pay this fee by your Realtor, although a good many try, using the line that "it's worth it to pay for excellent service".  What usually happens is that Realtors eat this transaction fee by paying it to the real estate company out of their commission, but if they still insist that you pay, find another Realtor to assist you. 

No comments:

Post a Comment