Private Transfer Fees: Hidden Homebuyer Fee Coming to an End

Private Transfer Fees, or PTF, may soon be coming to an end
Private Transfer Fees, or PTF, may soon be coming to an end

Buried in the arcane pages of many homebuyers' contracts is a hidden fee with an equally esoteric name: private transfer fee covenants. Essentially, these cryptic addenda, which are still legal in more than 30 states, require payment to a third party every time the property changes hands. On average, these fees can average up to 1 percent of the total sale price. (See Lita Epstein's expert breakdown of PTFs for all the details.) But all this could change, now that the Federal Housing Finance Agency (FHFA) is stepping in to abolish these fees. The FHFA argues that the fees put unnecessary strain on homebuyers and diminishes liquidity in both the primary and secondary mortgage markets. But until these changes come to bear, the magic words are "private transfer fees" – make sure that you ask your lender if your contract includes a PTF before signing on the dotted line.