Purchasing a home is hard enough without mortgage rates around 7 percent, but today homebuyers are more and more facing nebulous fees that are quietly tacked on to their transactions without proper disclosure.

There is a long list of closing costs involved in buying a home, and they can add up to as much as 2 to 5 percent of the home's purchase price, according to Zillow. Broadly speaking, they can be sorted into two groups.

The first are third-party services like title searches, building appraisals and surveys, record and document fees, and HOA transfer fees, if applicable. 

Behind most of them is a vendor who bills homebuyers for services that are required to complete the transaction.

Then there are the 'administrative and compliance' fees charged by real estate brokers, typically a few hundred dollars per transaction – some of which lack any clear or obvious benefit.

These are the junk fees you need to watch out for – and according to the Consumer Policy Center (CPC), they cost American consumers nearly $2 billion a year.

The problem is particularly pronounced among younger Americans, who may not fully understand what they should be paying for.

According to a 2025 study, 7 percent of Millennials and Gen Z could correctly identify the minimum down payment needed to buy a home. Only one in five said they trust lenders or real estate professionals to help them make informed financial decisions.

The CPC estimates that real estate broker fees can range from less than $200 to more than $2,000, with most costing between $400 and $600.

Real estate agent Jon Weintraub, a licensed Realtor in the Virginia and Maryland area, told the Daily Mail a brokerage transaction or administrative fee of around $400 is standard in his market, with the buyer and seller each paying their own fees.

The fee is generally intended to cover back-office costs such as compliance and document retention, errors-and-omissions insurance, transaction management and general administration, Weintraub told us.

But unlike a title fee or appraisal, consumers aren't usually given an invoice showing exactly what their flat brokerage charge covers.

Weintraub said these extra costs are supposed to be disclosed in the agreement upfront, and discussed during the initial appointment. 

But he noted that buyers and sellers don't really register the charge until they see it on the closing statement, where it can appear as just one line item among many.

That can leave a fee technically disclosed on paper without the consumer ever fully understanding what they are paying for.

Gia Freer, a licensed Florida broker since 2000 and broker of record at PBP Real Estate, said buyers and sellers should ask for every fee to be spelled out in writing before they sign, including the dollar amount and who receives it.

'At our brokerage, the only charges are the ones written into the agreement,' Freer told us.

Junk fees of this kind were highlighted in a 2026 lawsuit filed against Compass Realty in Florida. 

Jeff and Melissa Efron alleged the company had 'committed unfair and deceptive practices by attempting to collect and actually collecting an illegitimate fee from buyers of residential properties.'

After allegedly paying Compass a $475 'flat transaction commission' when their deal closed, the Efrons claimed that the brokerage told them 'that as the agents of the buyers, their efforts would be paid from the commission paid by sellers.'

However, the Efrons voluntarily dismissed the case before a judge could issue a definitive ruling on whether the fee was an illegal 'junk fee.' 

Part of the reason for the lack of disclosure comes down to the individual professionals that eager homebuyers are working with, according to the CPC.

And oftentimes, buyers and sellers find out about these fees late in the process, adding pressure on the consumer to go ahead with the sale regardless.

The report found examples of the fees appearing on title documents just days, and sometimes hours, before closing. In other cases, agents said the charges first appeared on a buyer's Loan Estimate or Closing Disclosure after they had already committed to the purchase, locked their mortgage rate and made plans to move. 

The report found that the fees are generally imposed by brokers on real estate agents, who are then 'expected' to pass them on to their clients.

In some cases, agents would increase the broker's fee and pocket the difference, or even charge a fee when it was not required by their broker.

The fees can also effectively raise the commission rate paid by consumers. The CPC cited one $1,590 administrative fee on a $412,000 home purchase that increased the effective commission rate by roughly 0.4 percentage points, while a $795 fee on a $126,900 home raised it by about 0.6 percentage points. 

The practice is not new. The CPC found that these fees began about 30 years ago, as brokerages sought additional sources of revenue.

They may have become more common as home sales declined and brokerages offered agents more generous commission splits. 

Rather than taking a larger cut from agents, some brokerages could make up the difference by charging transaction or administrative fees to consumers – costs that agents were then expected to pass along to buyers and sellers.

The CPC found that these fees have increased in both frequency and amount.

They have researched the fees by talking to real estate agents, brokers and mortgage brokers, and collecting social media posts on the subject from Facebook, TikTok, Reddit and Quora.

The CPC quoted one broker from an Eastern state estimating that fees were charged to 30 percent of sellers and 60 percent or 75 percent of buyers.

Denise Matthews, a Virginia broker whose Quora comment was used in the report, said that during her time as a Realtor with four different brokerages, all 'charged an admin fee to the client' and that they were 'common in my area.'

Another Midwestern agent referenced in the report said that in their state, more than 95 percent of transactions included a fee on both sides.

Weintraub said buyers can also ask whether their agent is willing to absorb the fee out of their own commission, as many brokerages allow agents to do.

'Read the compensation and fees section of your agent/brokerage agreement before you sign, and ask directly: 'Is there a brokerage transaction or administrative fee, how much is it, and can it be covered or waived?' 

'Get the answer in writing at signing, not at the closing table,' Weintraub said.