Can Unexpected Fees
Sabotage Your Deal?

Question: I am buying an older house and am ready to close. All of a sudden, my agent says I have to pay two fees that she hadn't mentioned before: One is a "transaction fee" and the other is for propane left in the seller's tank. Are these charges legitimate? Is there any way to get out of paying them?

-- Kirsten, Bakersfield, Calif.

Kirsten: Such surprise fees are becoming more the rule than the exception. The federal government is looking into ways to regulate them. But until that happens, you will need to do the best you can through negotiation.

Specifically, transaction fees have come about because of competition within the real-estate industry. In the old days, an agent would evenly split the commission with his or her office. But things are much different today. Hot agents (those who sell lots of properties) are able to negotiate better splits, often 80%-20% or better. If the broker won't agree to such an arrangement, agents can leave and go to work for someone who will.

The result is that the agent you are dealing with could get 80% of the buyer's commission while her office might only receive 20%. This gives the office very little margin to work with, so many brokerages have instituted a transaction (or similarly named) fee. With such an arrangement, the company hopes to recoup the money it no longer gets through the agent split.

Unless you previously agreed to pay this fee -- as in a listing or buyer's agent agreement -- you should argue against it. In most cases, the broker will make the fee go away if you put up a strong protest. But be careful about refusing to close the deal because of the fee. This approach could get you into hot water with the seller.

The gas fee is perfectly reasonable. You are probably buying a house that uses propane instead of natural gas. There's undoubtedly a propane tank on the property filled with the gas, which these days can cost quite a bit. All the seller is asking is for you to pay him or her back for the gas left in the tank. It's like prorating taxes. Though you could fight over this issue (everything is negotiable), it is only fair to pay the seller.

-- Mr. Irwin has more than 25 years' experience as a Los Angeles-area real-estate broker. He is the author of more than two dozen books about real estate and is recognized as one of the most knowledgeable writers in the real-estate field. Mr. Irwin's most recent book is "Tips and Traps When Renovating Your Home," (McGraw-Hill, 2000).

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