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Kristal Kraft, Real Estate Pro in Greenwood Village, CO

How much should a reasonable "processing fee" be?

Asked by Kristal Kraft, Greenwood Village, CO Wed May 23, 2007

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It depends on what other "admin fees" there are, such as Funding Fees, Underwriting Fees, etc. You really need to consider the entire GFE and the loan program (brokered subprime has higher cost for example than a-paper). As far as what the title company charges, as Lenn mentions, this can vary from state to state.
4 votes Thank Flag Link Wed May 23, 2007
I've seen them as low as $395 and as expensive as $650. Most often, we see $495 in California.
Web Reference: http://brian-brady.com
5 votes Thank Flag Link Wed May 23, 2007
"Processing Fee" can mean several things depending on the entity charging it. Lenders may charge a processing fee of about $150 to $500. This fee is negotiable. Real estate brokers may charge a processing fee of from $295 to $495. These fees are not usually negotiable but if the buyer or seller refused to pay it, the agent will. This particular processing fee is a fee charged by the broker in addition to the real estate commission. Title company may charge a "processing fee" to prepare documents for settlement.
5 votes Thank Flag Link Wed May 23, 2007
Personally, I think the real estate agencies are already charging a pretty penny, and there shouldn't be any additional "processing fee" added to the pie.

THAT would be a reasonable processing fee. Make your basic fee cover your costs, instead of nickle-and-diming on top of a seller who's already shelling out 6%. (And no, it's not important how that 6% is being divided 4 ways)... the seller only knows that they're forking over 6% to sell their house, and now they're being asked to "add" $395.00 to it.
3 votes Thank Flag Link Thu Aug 21, 2008
Alan May, Real Estate Pro in Evanston, IL
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Just so I understand you right, you are saying the cost depends on how the loan is "packaged?" I've seen some loans where there is no processing fee to the lender and others where the fee is very large...
3 votes Thank Flag Link Wed May 23, 2007
Well, Kristal, you did ask this as a financing question. Yes, our compliance fee is an office fee. My only thought was that processing fee and compliance fee both sound like, ummm, extra fees!
Web Reference: http://mibirmingham.com
2 votes Thank Flag Link Fri May 25, 2007
Maureen Fran…, Real Estate Pro in Birmingham, MI
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Maureen ~ Your "compliance fee" sounds like an office fee. Interesting, but I guess I should have specified "loan processing fee". I am always amazed at the range, it seems the fee just depends on the company/loan office charging it.
2 votes Thank Flag Link Fri May 25, 2007
Our office charges a $85 fee to buyers called a "compliance fee." Sounds nebulous, as does "processing fee."
2 votes Thank Flag Link Fri May 25, 2007
Maureen Fran…, Real Estate Pro in Birmingham, MI
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Brian ~ that sounds to be in line with what I see here in Colorado. Thanks,
2 votes Thank Flag Link Wed May 23, 2007
We have a $30 fee for each sale taken out of our checks which is extended coverage fees. We are told this is to cover insurance. Some of it may be. if you have 50 transactions this adds up to $1500 which is much more than insurance alone would cost. This goes to the companies bottom line. A fee is a fee which comes out of your pay check any way you look at it. They would take more if they could.
1 vote Thank Flag Link Thu Aug 21, 2008
$225.00 to $275.00 is a good range - $350.00 which many brokers charge I fell is on the high side. Of course it all depends on the commission your paying as well. Call a few brokers and get an average commssion in your area. The processing fee will be added to it. Remember you can always try to negotiate it!
1 vote Thank Flag Link Thu Aug 21, 2008
I just had my favorite lender make me a sheet on her total cost. It was $985 including appraisal and credit report fee. So many people ask I just give it to them. This is all the cost that comes from her. Buyers want to know the cost and lenders call them by different names. I had my favorite attorney do his share on a 200k loan so the buyer knows about what his cost are gogin to be outside of escrows and tax transfers.
1 vote Thank Flag Link Thu Jul 24, 2008
I have a $595 processing fee. this fee is non-negotiable. I do not charge for credit reports, fed-ex, nickle and dime. I always close on time.
1 vote Thank Flag Link Sat Jun 9, 2007
standard is $450 in bay area, ca. But keep in mind that this fee is not set in stone. You can have as low as $0, if you are in position to negotiate.
1 vote Thank Flag Link Thu May 24, 2007
It depends what other fees that particular lender is charging you, if they have already charged you an appriasal fee and an underwriting fee, the $0 would be an appropriate processing fee. It all depends on the total fees charge by the lender
1 vote Thank Flag Link Thu May 24, 2007
I can only assume Kristal, that this is a fee the agent pays the broker. I know of no company in Louisiana that charges the buyer or seller anything other than the commission. When we say processing fess in general it can mean different things in different areas.
0 votes Thank Flag Link Thu Aug 21, 2008
We normally don't charge a processing fee to our sellers and buyers, but it is customary, especially with national Real Estate Firms to do so. Each agent will tell you it covers anythiing from storage of documents after you close (print and electronic), Virtual assistant to handle the many legal processes involved in the sale or purchase, corporate processing of the transaction, etc. Many times the fee can be waived if you request it as part of any negotiating process in purchasing anything--like automobiles, mortgage loans etc.

Buyers and Sellers of Real Estate never see the work done behind the scenes by Realtors/agents who are the coordinators between the lenders, title company, inspectors, other agent etc. We are involved continually from contract to closing with your lender, the title company, inspection reports, selling agent communication for negotiation with repairs, closing date changes and a whole list of different reasons that come up with each individual sale of a home. But it is not likely you would know all we do unless you yourself became a Realtor, anymore than you would know what a lawyer, underwriter or machine technician really does.

The Internet has helped everyone in the process see more of homes in the initial phases of the buying process, but Realtors still are showing just as many homes because nothing takes the place of experiencing a potential home in person.

You will have to be the judge of what is reasonable to you in the way of paying a processing fee. If you love your Realtor/agent and don't want to switch to another who doesn't charge, then you may feel it is worth the extra charge.
0 votes Thank Flag Link Thu Aug 21, 2008
If you are talking about the agent - there is another name for it "additional agent profit" as if 3% (assuming a split between listing and selling agents) isn't enough. Most of the paperwork is done by the lender, and various other entities - attorneys, inspectors, etc. (for which they will charge you - somewhere between $2-5K - it depends on how much the lender rolls into the loan APR).

Always ask about the fees before using an agent - if they have one on top of the commission - go somewhere else. BTW, even the commissions are negotiable now.

With the advent of the internet, the legwork of the agents is substantially reduced. The days of printing and looking in the MLS book at tiny, often horrid pictures are over. So there is no longer any need to drive to 30 properties to find a nice one assuming the listing agent did a good job with pictures and descriptions.
0 votes Thank Flag Link Thu Aug 21, 2008
MOst admin fees are around $300 a transaction, but it really depend on the market place. In Washington DC, most companies are all within $10 of each other.
0 votes Thank Flag Link Thu Aug 21, 2008
Well what are you getting for the fee ? Hampton roads area is from 195-450 For a RE transacation. I have been known to waive the fee ( pay it my self) . Its really in the negotiations.
Alison Creamer
REMAX allegiance
Web Reference: http://www.bzibee.com
0 votes Thank Flag Link Fri Jul 25, 2008
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