When trying to apply fade-in and fade-out transitions to a clip, they will only be 1.0 seconds long by default. The easiest way to edit transition lengths is to use the Precision Editor. You may open the Precision Editor using cmd+/ or right-clicking the transition you want to edit and selecting Show Precision Editor. From there, you’ll be able to slide the length of the transition to your liking. Hitting the Esc key exits the Precision Editor, or clicking the “x” where it says “Close Precision Editor” will close it as well.
Here’s a video that shows a great example on how to use the Precision Editor.