Buying a home - brokerage fee
"That sounds like a particularly egregious version of exclusivity. However, the way that you could handle that is to include a ""contingency"" in your purchase agreement stating that your offer is contingent upon the seller paying the brokerage fee. The argument against this, and something your broker might use to encourage you not to do so, is that it makes your offer less attractive to the buyer. If they have two offers in hand for the same price, one with contingencies and one without, they will likely take the no-contingency offer. In my area, right now, house offers are being made without very common contingencies like a financing contingency (meaning you can back out if you can't finance the property) or an inspection contingency. So, if your market is really competitive, this may not work. One last thought is that you could also use this to negotiate with your broker. Simply say you're only sign this expecting that any offer would have such a contingency. If it's untenable in your current market, it will likely cause your broker to move on. Either way, I'd say you should push back and potentially talk to some other brokers. A good broker is worth their weight in gold, and a bad one will cost you a boat load. And if you're in Seattle, I'll introduce you to literally the best one in the world. :-)" "Every situation is possible, it depends on what the contract states. According to Nolo:  Your ability to withdraw from a home purchase depends on two things: 1) the exact point at which you are ""in contract"" to buy the house,   and  2) after you're in contract, what the contract says about terminating   the transaction. Therefore, you need to be 100% ready for anything to happen. After you sign the contract, it is binding and you must adhere to what the contract states. Buying a home is a big purchase - arguably the biggest of your life - you need to be comfortable with every aspect of this experience." "I feel like you didn't actually read your agent's agreement, which should say where the money actually comes from. You sign it so that your agent can get paid by the listing agency from the net brokerage fees which the buyer pays. In the United States, ""real estate agents are prohibited from being paid a commission directly by the consumer."" (citation: https://www.thebalance.com/how-do-buyer-s-agents-get-paid-1798872 ) The agreement will say exactly where your buyer's-agent's money is going to come from. Typically the listing agency receives the broker fees from the seller, and then pays both the seller's agent and the buyer's agent from that. It means both agents have to split the fee. [If] for some reason the seller won't pay the buyer broker, can I just not purchase the house? Pretty much, yes, though it won't be you saying ""deal's off"". Unless they have some really unusual contracts with their OWN broker, if the seller refuses to pay fees, their own side of the transaction is going to fall apart and the sale won't happen at all, leaving you off the hook for your own broker's fee."
As others have said, it depends on the brokerage firm.  My broker is Scottrade. With Scottrade the commission is assessed and applied the moment the order is filled. If I buy 100 shares of XYZ at $10 a share then Scottrade will immediately deduct $1007.02 out of my account. They add the commission and fees to the buy transaction. On a sale transaction they subtract the commission and fees from the resulting money. So if I sell 100 shares of XYZ at $11 a share I will get 1,092.98 put into my account, which I can use three business days later. The brokerage executes the transactions you tell them to make on your behalf. Other than acting as your agent for those, and maintaining your account, and charging a fee for the service, they have no involvement -- they do not attempt to predict optimal anything, or hold any assets themselves. "New SEC rules also now allow brokers to collect fees on non-dividend bearing accounts as an ""ADR Pass-Through Fee"". Since BP (and BP ADR) is not currently paying dividends, this is probably going to be the case here. According to the Schwab brokerage firm, the fee is usually 1-3 cents per share. I did an EDGAR search for BP's documents and came up with too many to read through (due to the oil spill and all of it's related SEC filings) but you can start here: http://www.schwab.com/public/schwab/nn/m/q207/adr.html" "What are reasonable administrative fees for an IRA? was recently discussed here. My answer was zero.  An IRA is not an investment, it's a container representing the tax status of an account. Once you decide what to actually invest it in, you'll likely incur additional fees. Mutual funds, for instance can range from .05% per year to 2.00% or more. In your case, you are telling us you are spending 2% per year even before you decide what to invest in.  The real question I'd like to see answered is ""what value can an advisor bring to one's retirement account to deserve a 2%/year fee?""  My final thought - most financial types had been suggesting that a retiree can target a 4% per year withdrawal after retiring. This rule of thumb has been debated since the lost decade of 2000-2009, and the safe number may be lower. If an advisor is taking 2% off the top, you are basically sharing half your income with him. A million dollar IRA, you get $20K, he gets $20K?" "Banks make money on load origination fees. The ""points"" you pay or closing costs are the primary benefit to the banks. A vast majority of the time risks associated with the mortgage are sold to another party. FYI, the same is true with investment banks. In general, the transaction costs (which are ignored by modern finance theory) are the main thing running the incentives for the industry." 12b1's have fallen out of favor in recent years, and are typically capped at about 0.25%. they are also usually waived and factored into the fund OER these days, too, though it depends on who your broker is.  any revenue sharing shouldn't increase your fees. in my experience, there is more incentivizing for cross selling rather than revenue sharing, but in any case those would be fractions of your revenue allocated to different parties, and not additional fees. There is such a thing as a buy-write, which is buying a stock and writing a (covered) call simultaneously. But as far as I know brokers charge two commissions, one stock trade and one options trade so you're not going to save on commissions. If that $6k includes points to buy down the rate, it could be a good deal, depending on the total cost of the house and the rates involved. If that's pure administrative and legal fees, that seems pretty high. I've bought a number of houses in my time and I don't think I ever paid over $2000. I refinanced my current house a year or two ago, with the same bank, and total closing costs were $500. That said, I don't know where you live, the cost of the house, etc. Might be that's normal in your area and your circumstances. But I'd shop around before just accepting it. "You don't ""deduct"" transaction fees, but they are included in your cost basis and proceeds, which will affect the amount of gain/loss you report. So in your example, the cost basis for each of the two lots is $15 (10$ share price plus $5 broker fee).  Your proceeds for each lot are $27.50 (($30*2 - $5 )/2).  Your gain on each lot is therefore $12.50, and you will report $12.50 in STCG and $12.50 in LTCG in the year you sold the stock (year 3).   As to the other fees, in general yes they are deductible, but there are limits and exceptions, so you would need to consult a tax professional to get a correct answer in your specific situation." In this case, trust the real estate agent; negotiating experience is one of the things you selected them for. Especially if they're suggesting a lower number than you expected, since they get paid on commission and so may be biased the other way.  Part of their job is to look for hints about how motivated this seller is and what price they might accept, as opposed to what price they hope to get.  And remember that the default assumption is that the two parties will meet in the middle somewhere, which means it's customary to offer 10% less to signal that you could probably be talked into it if they drop the price about 5%. This is like bridge-hand bidding: it's a semi-formalized system of hints about levels of interest, except with fewer conventions and less rationality. As far as the seller paying the closing costs: that's really part of the same negotiation, and doing it that way makes the discussion more complicated for the seller since they need to figure out how much more to charge you to cover this cost. If they offer, great, factor that into what you are willing to pay... but I wouldn't assume it or ask for it. Edit: Yes, unless you have engaged a Buyer's Agent (which I recommend for first-time buyers and maybe all huyers), their fiduciary duty is to the seller. But part of that duty is to make the sale happen. If the price goes too high and you walk away, neither the agent nor the seller make money. A bad agent can be as bad as a bad car salesman, sure. But if you don't like and mostly trust your agent, you are working with the wrong agent. That doesn't mean you give them every bit of information the seller might want, but it does mean you probably want to listen to their input and understand their rationalle before deciding what your own strategy will be. "Before the prevalence of electronic trading, trading stocks was very costly, dropping from ~15c in the late 1970s to less than a nickel per share today.  Exchange fees for liquidity takers are ~0.3c per share, currently. When orders were negotiated exclusively by humans, stocks used to be quoted in fractions rather than decimal, such as $50 1/2 instead of something more precise like $50.02. That necessary ease of negotiation for humans to rapidly trade extended to trade size as well.  Traders preferred to handle orders in ""round lots"", 100 shares, for ease of calculation of the total cost of the trade, so 100 shares at $50 1/2 would have a total cost of $5,050.  The time for a human to calculate an ""odd lot"" of 72 shares at $50.02 would take much longer so would cost more per share, and these costs were passed on to the client. These issues have been negated by electronic trading and simply no longer exist except for obsolete brokerages.  There are cost advantages for extremely large trades, well above 100 shares per trade. Brokerage fees today run the gamut: they can be as insignificant as what Interactive Brokers charges to as high as a full service broker that could charge hundreds of USD for a few thousand USD trade.  With full service brokerages, the charges are frequently mystifying and quoted at the time a trade is requested.  With discount brokerages, there is usually a fee per trade and a fee per share or contract.  Interactive Brokers will charge a fee per share or option only and will even refund parts of the liquidity rebates exchanges provide, as close as possible to having a seat on an exchange.  Even if a trader does not meet Interactive Brokers' minimum trading requirement, the monthly fee is so low that it is possible that a buy and hold investor could benefit from the de minimis trade fees. It should be noted that liquidity providing hidden orders are typically not rebated but are at least discounted. The core costs of all trades are the exchange fees which are per share or contract.  Over the long run, costs charged by brokers will be in excess of charges by exchanges, and Interactive Brokers' fee schedule shows that it can be reduced to a simple markup over exchange fees.   Exchanges sometimes have a fee schedule with lower charges for larger trades, but these are out of reach of the average individual." I'm not positive my answer is complete, but from information on my broker's website, the following fees apply to a US option trade (which I assume you're concerned with given fee in dollars and the mention of the Options Clearing Corporation): They have more detail for other countries -- see https://www.interactivebrokers.co.uk/en/index.php?f=commission&p=options1 for North America.  Use the sub-menu near the top of the page to pick Europe or Asia. The brokerage-charged commission for this broker is as low as $0.25 per contract with a $1.00 minimum.  Though I've been charged less than $1 to STO an options position, as well as less than $1 to BTC an options position, so not sure about that minimum. Regarding what I read as your overall underlying question (why are option fees so high), in my research this broker has one of the cheapest commission rates on options I've ever seen.  When I participate in certain discussions, I'm routinely told that these fees are unbelievable and that $5.95, $7.95, or even $9.95 are considered low fees.   I've heard this so much, and discussed commissions with enough people who've refused to switch brokers, that I conclude there just isn't enough competition to drive prices lower.  If most people won't switch brokers to go from $9.95 to $1 per trade, there simply isn't a reason to lower rates. "And to answer your other questions about fees, there are a number of sites that compare brokers' fees, Google ""broker fee comparison"". I like the Motley Fool, although there are a lot of others. However, don't go just by the comparison sites, because they can be out-of-date and usually just have the basic fees. Once you find a broker that you like, go to that broker's site and get all the fees as of now. You can't sell the shares that are in your Charles Schwab account using some other broker. However, you can (possibly now, definitely eventually, see below) transfer the shares to another broker and then sell them there. But be aware that Charles Schwab might charge you a fee to transfer the shares out, which will probably be larger than the fee they'll charge you to sell the shares, unless you're selling them a few at a time. For example, I have a Charles Schwab account through my previous employer and it's $9.99 commission to sell shares, but $50 to transfer them out. Note that your fees might be different even though we're both at Charles Schwab, because employers can negotiate individual deals. There should be somewhere on the site that has a fee schedule, but if you can't find it, send them a message or call them. One final thing to be aware of, shares you get from an employer often have restrictions on sale or transfer, or negative tax consequences on sale or transfer, that shares just bought on the open market wouldn't, so make sure you investigate that before doing anything with the shares." "AFAIK, It's also possible that the ETF company is paying Ameritrade for every trade you make. Even if your brokerage doesn't make you pay a fee to trade ETFs, the company that created and runs the ETF is still making money when you purchase and use their ETFs. See ""What motivates each player?"" at Yahoo Finance." Here's the purely mathematical answer for which fees hurt more. You say taking the money out has an immediate cost of $60,000. We need to calculate the present value of the future fees and compare it against that number. Let's assume that the investment will grow at the same rate either with or without the broker. That's actually a bit generous to the broker, since they're probably investing it in funds that in turn charge unjustifiable fees. We can calculate the present cost of the fees by calculating the difference between: As it turns out, this number doesn't depend on how much we should expect to get as investment returns. Doing the math, the fees cost: 220000 - 220000 * (1-0.015)^40 = $99809 That is, the cost of the fees is comparable to paying nearly $100,000 right now. Nearly half the investment! If there are no other options, I strongly recommend taking the one-time hit and investing elsewhere, preferably in low-cost index funds. Details of the derivation. For simplicity, assume that both fees and growth compound continuously. (The growth does compound continuously. We don't know about the fees, but in any case the distinction isn't very significant.) Fees occur at a (continuous) rate of rf = ln((1-0.015)^4) (which is negative), and growth occurs at rate rg. The OPs current principal is P, and the present value of the fees over time is F. We therefore have the equation P e^((rg+rf)t) = (P-F) e^(rg t) Solving for F, we notice that the e^rg*t components cancel, and we obtain F = P - P e^(rf t) = P - P e^(ln((1-0.015)^4) t) = P - P (1-0.015)^(4t)