What is A Transaction Fee

One of the fees that comes along with buying a house is a “transaction fee”. This one is often forgotten, but it’s one of themes cubical ones. This is a sizable chunk of money that is used basically for processing all the paperwork involved when buying or selling a house. 

A transaction fee is also called a “broker service fee” or “admin fees”. It’s the cost of making the transaction happen, the two biggest ones are managing the deal itself, and keeping up with and storing the paperwork. It’s what the brokerage charges the buyers/sellers. Because it’s the buyers/sellers who are paying it, it’s the real estate agent’s job to pass this cost along to them, otherwise the agent will probably lose that out of their commission. 

Pretty much, the seller’s agent will pay the brokerage the fee, and pass the fee along to the seller. The fee can be anywhere from $300 - $650. The dime doesn’t stop here, here are a few other fees that are linked in with the transaction fee. 

Transaction fees can also involve escrow, title homeowners association, city and county transfer taxes, Some of these fees get sent straight to the city. Like in San Francisco, the buyer usually pays for the escrow, title, and whatever homeowners association move-in fees are involved in the transaction. On the other hand the seller will be paying the city and county transfer taxes, along with the HOA move-out fees. 

Some other places, those roles are swapped or changed slightly. 

Compliance fees

Sometimes when you buy a home it isn’t exactly in the best shape. You’ll need to spend some extra money on compliance fees, which are getting your home compliant with the local codes. Different states, cities, and counties have different compliance fees. 

Parts of the country that are more prone to droughts, earthquakes, and fires will be required to have smoke and carbon detectors, low flush toilets, water-efficient shower heads, and gas shut-of valves installed pre-move-in. 

The seller is typically stuck with this bill, and they can’t only pay some of it. 

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