Private Transfer Fees

By Michael | October 1, 2010

Private Transfer Fees
You got to just love this one. [Please insert sarcasm here!] Some new home community developers have instituted this little gem, A PRIVATE TRANSFER FEE. This practice is now banned in only 16 states, but here is how it works.

Consumer comes along and buys a new home from a developer and a little lien is placed on their deed and ALL subsequent deeds imposing a private transfer fee. These fees can be as high as 1%…$100,000 sale price = $1000 transfer fee, but it doesn’t go away with one sale, it is appurtenant which means it stays with the property FOREVER, which means every time someone sells, the DEVELOPER gets a slice of the seller’s pie.

This is so wrong but it does illustrate why it is essential that real estate consumers hire a full time, professional, market savvy real estate professional.