Tuesday, August 24, 2010

Transfer Fee Battle is Heating Up

A few years ago, builders started imposing transfer fees on the homes that they sold. Most of the buyers didn't care because the fee didn't show up until they sold the house and then it was the new buyer's responsibility to pay for the fee. But things are starting to heat up in Washington as these transfer fees are being further investigated. Transfer fees have been more accepted in the past as they were usually found in the selling of condominiums and smaller homes where the funds would be used to pay for the maintenance and general upkeep of the housing project. The issue that has everybody up in arms over is the fact that these new transfer fees are doing nothing other than lining the pockets of builders (often for 99 years).

In a booming real estate market, we would probably see these fees getting swept under the rug. But in a weaker economy, everything is under the spotlight, especially in the real estate market. With so much opposition and press on transfer fees, we could see some federal regulation that would ban these fees very soon. The FHA has already proposed a rule that would restrict Fannie Mae and Freddie Mac from purchasing homes with these types of fees. I'm sure we will see more on this very soon.

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