flexiblefullpage
Currently Reading

Controversial ‘Admin Fees’ Are Driving Up Closing Costs

Advertisement
billboard
Financing

Controversial ‘Admin Fees’ Are Driving Up Closing Costs

The administrative fees tacked onto closing costs help brokerages cover everything from paperwork to meeting regulatory requirements, but many industry experts say those extra costs are scamming buyers


May 3, 2023
Graphic of homebuyer signing closing paperwork for a home purchase
Image: Elena Abraz / stock.adobe.com

The administrative fee in a real estate transaction is tacked onto the commission that buyers and sellers already pay their agent, and it helps brokerages cover the costs of processing paperwork and handling other details that are part of the closing process. 

In the past several years, that fee has become more common and more costly, creating yet another affordability barrier for homebuyers in a market where home prices have increased by more than 40% over the past three years, according to Insider. Closing costs for a single-family home averaged $6,905 in 2021, on top of an already elevated sales price—a 13.4% increase from the year prior. And hidden within those costs are $250 to $500 admin fees, which many industry professionals are calling “junk fees.”

"Brokerages have to be so competitive to recruit agents that a lot of them will give up a big chunk of that commission," Bryan Clapper, a broker in the Minneapolis-St. Paul area who doesn't charge the fee, told me.

The size of the fee runs the gamut, though it typically ranges between $250 and $500, Brobeck told me. An agent in Las Vegas who recently switched brokerage firms and requested anonymity to talk about their fee structures told me he interviewed with seven brokerages when he was making the change. All charged an admin fee, usually between $400 and $600. 

Read more

 

Advertisement
leaderboard2

Related Stories

Business Management

3 Truths for Home Sales Success Now and Into the Foreseeable Future

Most sales leaders have been in chaos control since 2020. Stop feeding that mindset and start shifting gears using these three insights 

Sales

Fannie Mae's Take on the Future of US Home Sales

The recent forecast indicates slowing home sales, due to continuing mortgage rate increases accompanied by homebuyer hesitance

Market Data + Trends

Entry-Level Homes Are a Reach for First-Time Buyers

Despite today's fast-paced, high-cost housing market putting starter homes out of reach for many, some first-time buyers show they're willing to compete

Advertisement
boombox2

Top Articles

Advertisement
boombox1
Advertisement
native1
halfpage2

More in Category

COVID-19 may be easing its grip on the U.S. after a disastrous two years, but lingering supply chain disruptions have builders holding onto their pandemic business tactics

An archive of NHQA-winning companies that represent home building's best in Total Quality Management

Don’t let the current hype about single-family B2R communities obscure the need to create long-term sustainability and asset value

Advertisement
native2
Advertisement
halfpage1

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.