There are multiple types of charges included in a real estate transaction. Some of them are traditionally common and easy to understand. However, the service fee is one type of charge that is a comparatively new medium in the business.

What is the Fee for Service?

The service fee is a method that charges clients who are involved in a real estate transaction for the service that was performed for the party or the real estate listing. This financial transaction method doesn’t follow the negotiation, rather that it is fixed on the current rate. In addition, the pricing model can vary from one type to another. It could be an a-la-carte price list or a base dollar amount with additional charges, or it can combine a small percentage for certain core services and additional charges for more work.

How does it work?

The fee isn’t calculated by hourly service like another traditional method. As mentioned previously, it is a fixed price that is based on the accomplishment of a task. The selling price is cut into the fee for the person who is providing the service.  The contracts that buyers and sellers have with their agents determine the amount of the service altogether. And the rate is different depending on the area, house, profit made from the house, and type of service the client is getting from the agent.

Who pays for it?

This gets tricky here. Standard practice is for the seller to pay the fee for the service of the house in question. But, in doing so the sellers include the fee for service in the aggregated house price. Eventually, this leads to the buyer paying for the fee at the end.