Traveling during Covid pandemic and shortly after, most of the hotels did not meet our expectations. They were short stuffed, so they discontinued the cleaning service. Getting your car from the valet took half an hour, and the service was generally abysmal. So, we switched to Airbnb where we got much better accommodations for a lot less money.
But lately, I noticed a change in Airbnb pricing. Their listings show price per night, and then the total price, which is almost double of what you expect based on the price per night! What’s going on? Open the listing – and you see all the fees that are being added on. Cleaning fee, service fee, and sometimes other fees are added to your nightly price, which makes you ask: what does the price per night mean?
Hotels are inflating their prices as well. They do not charge extra for cleaning your room, but most of them add a “resort fee” which can be up to 100 bucks. In some hotels, the use of the pool and gym is not included in “resort fee” (which makes you ask ‘what is included?’) Many hotels also charge for parking. Add your tax and various tips, and again, you are paying double of what your nightly price would suggest.
To deal with rampant inflation, many businesses now add on additional fees to your “base” price. Rather than sharply raising their prices, which would turn customers away, they keep “base price” in check but they add on “fine print” that many people don’t pay attention to, until they get their bill. Many businesses are now passing credit card use fee on to their customers. Some even added on “Covid surcharge” which they later renamed to “inflation surcharge.” The practice of piling on extra fees is a way for businesses to pass the higher operating costs to their consumers.
Fine dining establishments in California initiated that practice long before the pandemic. As frequent restaurant goers, a few years ago we started noticing random surcharges being added on to our bill. Some, but by no means all, included: “Healthcare fee,” “Living wage fee,” “Climate change fee,” “Service charge” (in addition to tips), and so on – whatever a restaurant felt like they could get away with before customers started complaining. By the time we left Bay Area 3 years ago, our restaurant bill was being inflated by at least 35%, and that’s before you added the tip! Earlier this year, California passed a law that seemingly makes “junk fees” illegal, but in reality, restaurants can continue to charge them as long as they are disclosed on the menu.
Real estate transactions also involve fees that you don’t see upfront. They are called “closing costs”, and they are added on top of your purchase price if you are a buyer, or subtracted from the amount you receive as a seller. Closing costs are usually split between the buyer and the seller unless negotiated otherwise. The amount depends on the state / county you live in, and they are not easy to calculate, but contacting your escrow company or your bank may give you an idea of what you should expect. Depending on where you live, closing costs include various taxes, insurance, loan initiation, legal fees, and of course, your real estate agent fee.
Remember that unlike other closing costs that are dictated by your state and your county, your real estate agent fee is always negotiable. That is true for both the buyer and the seller agent. Interview your agents before signing a contract with them, and make sure you understand their responsibilities to you and how much they are charging you.
If you are interested in any of our properties currently on the market, we are covering 2.5% of the buyer’s agent compensation.
Satinleaf Properties 