How Realtors Charge a Real Estate Transaction Fee

Learn how Realtors charge a real estate transaction fee to increase the profitability of their businesses.

Today we are going to talk about how to charge a real estate transaction fee to increase profitability. This is an interesting and controversial topic that I brought up on our Facebook Group, Real Estate Agent Round Table. Agents from across North America chimed in. We saw many different answers and opinions on whether or not a transaction fee is a good idea.

VIDEO: How Realtors Charge a Real Estate Transaction Fee

Do you charge a real estate transaction fee?

There is no right or wrong answer to this, and I’m not here to tell you one way or the other. Instead, I just want to put this out there to cause you to think about the possibilities. Depending on how much you charge and how much you sell, this could be a huge chunk of income for you. It’s an important discussion to have, and it is interesting to see what Realtors across North America have to say about it.

Let’s break down pros of a real estate transaction fee below.

Pros: “Yes, I charge a transaction fee.”

It gives you something you can give away. By charging a real estate transaction fee standard, you have flexibility to remove the fee as a bargaining chip while still protecting your commission.
It’s a significant chunk of income. Depending on your sales volume and how much you charge for the fee, it could be a healthy bit of change.
This fee represents the value that you are providing your clients. Whether the money goes to pay your admin staff or your office fees, it represents work that is being done for your client. It is not an empty fee. It actually presents you with an opportunity to explain all the value you are providing to your clients!
The more real estate and agent sells, the more likely it is that they charge a real estate transaction fee. Often, it does have to do with confidence. You must believe in the value you are providing your clients.

Challenges to charging a fee

The opposing view held by agents who do not charge a real estate transaction fee is also important to understand. Some agents are uncomfortable with it, and feel that it isn’t “honest.” Or, they feel that they should not add on “extra” fees because their commission is enough. They may fear pushback from clients. Also, many agents deal with special cases, like VA loans. In these cases, a transaction fee is not charged (and in some places may not be allowed). Some agents also feel that not charging a fee helps them stand out from other agents.

Whether you are for or against, it is important to make an informed choice on whether or not to charge a real estate transaction fee. There are valid opinions on both sides. It is vital that you understand the pros and cons when you make your choice.