Shipping and Handling


The transaction fee – It is seldom talked about yet frequently used. I find the practice (at the risk of ruffling more than a few feathers) despicable.

Frankly Realty Blog did a good job of addressing the subject awhile back. A transaction fee is a fee charged by the real estate agent to “cover” the handling of your transactional documents and coordination of the process once your purchase or sale is under contract. I call it a junk fee. For those of you, like myself, who have made an online purchase for, say, $10 only to learn later that shipping and handling costs have nearly doubled the bill, you can understand my objection to this fee. It is a profit center, pure and simple, intended only to increase the provider’s bottom line at your expense.

For the unenlightened, most agents use the help of an assistant (we call them Transaction Coordinators, or TC’s) during the course of a property transfer. TC’s are valuable in performing the more routine or even mundane tasks involved including ordering reports, uploading documents, and ensuring the flow of paperwork and the timely receipt of signatures to name a few. Whether the TC is on your agent’s own payroll or works on behalf of all agents in the office, there is a cost involved for these services of anywhere from $300 to $500 per transaction.

What happens so often is that the agent passes this cost through to the principal in the transaction. Sadly, the fee is often inserted as a throw-away afterthought by the agent, and the client either doesn’t realize it is there or doesn’t question it, assuming the fee to be customary and non-negotiable.

We have never charged our clients a transaction fee nor will we ever. Thankfully, our company has adopted a policy that prohibits the practice, but we are the only ones that I am aware of who have taken this position. My position is this: We are compensated for our services through payment of a commission at closing. What is the client paying for if it isn’t for our services, all of them?

In nearly every contract I see, the cooperating agent has slipped a TC fee slipped in under the “allocation of costs” section. I assume the theory is that this nickel and diming will be lost among the lengthy laundry list of title, escrow, recording and other fees being charged to the principles (that approximate 1% closing cost component). And from the agent’s perspective, recovering $300 over the course of, say, 20 transactions equals a lot of enchiladas. Too bad. It is a cost of doing business, a business for which we are compensated handsomely.

Just this week I received an offer on one of our listings from an agent who had included a $495 TC fee to be charged to the buyer. This buyer was attempting to purchase their first home. In order to do so, they would be needing 100% financing and a significant credit from the seller for closing costs and loan buy-down. Do you think $495 was nickels and dimes to them, truly inconsequential? Being a first-time buyer, did they even know that they were being taken advantage of by an agent who would ultimately be taking a 3% paycheck? 


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