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Extra Transaction Fees for Clients - An Open Forum for Discussion

Over my 13-year real estate career, I have seen a number of different commission models that agents use during closings.  Sometimes, agents are charging very little.  Occasionally, it's a flat-fee arrangement.  And, very rarely, I see an extra fee lumped in on top of the commission.

It's usually called a "transaction fee" or something similar.  I have never charged one of these, but I will admit that the idea of collecting a few hundred extra dollars at each closing does intrigue me.  However, it also makes me a little queasy.

For those of you who use this type of fee with your clients, I have a couple of questions:

  • How do you present this (assuming that it's presented at all)?  Is it part of an overall presentation about anticipated closing costs?

  • Is this money used to pay for a transaction coordinator of some sort? 

Based on the last fee that I saw, which was $295, I could definitely afford to pay someone to handle our files or a "contract to closing" function as an in-house position.

Clearly, this is a fee that cannot be charged only for certain clients - it would have to be mandated across the board in order to bring in additional staff. 

I know that there are separate, free-standing companies that provide contract-to-close services, but I would have trouble trusting someone outside of our company to do this.  Maybe I'm just picky that way.  In fact, maybe I'm just too picky to allow an employee to handle my files, either. 

If this fee is just collected to provide extra income, I would have a tough time justifying it.  I am typically tempted to ask the other agent's client, "What did you get for that transaction fee?".  I feel this way especially when it's a buyer on the other side.  I was imagining the agent saying, "Sure, you could get free representation, but you get what you pay for, right?  We charge a few hundred dollars, and the seller pays the rest!"

I guess I was just looking for some input on this topic.  I welcome any discussion on this below.  Thanks for reading!

Image of Gary Coleman courtesy of Umpqua - found via Creative Commons search on




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