Additional Real Estate Broker Fees? (Houston: house, buyer, new construction) - Texas (TX) - City-Data Forum

kaiden22 · 01-30-2013, 09:27 PM

We signed an agreement with a real estate agent last weekend and it listed a $400 fee that we were to pay to the broker at closing. We assumed this was standard practice in Texas so we signed. On Sunday the agent took us to one resale then we met with a builder about new construction. It's only been a few days, but we have decided that we want to move forward with the new build. The builder offers a 4% commission, so I am going to request that the broker waive the $400 fee since they will be recieving an extra $4k from that additional 1%. Brokers/agents, how likely is it that the firm will honor this request? And do most firms here charge a fee directly to the buyer here?

City Love · 01-30-2013, 09:43 PM

Quote:

Originally Posted by kaiden22

We signed an agreement with a real estate agent last weekend and it listed a $400 fee that we were to pay to the broker at closing. We assumed this was standard practice in Texas so we signed. On Sunday the agent took us to one resale then we met with a builder about new construction. It's only been a few days, but we have decided that we want to move forward with the new build. The builder offers a 4% commission, so I am going to request that the broker waive the $400 fee since they will be recieving an extra $4k from that additional 1%. Brokers/agents, how likely is it that the firm will honor this request? And do most firms here charge a fee directly to the buyer here?

Wow, someone is charging you an extra $400 as the buyer? That's not common, and kind of sleazy if you ask me. I've heard of some brokers adding extra fees on a listing to cover extra expenses, which I find silly. I've never seen them add it to buyer's.

Definitely ask them to waive that. I doubt they will though.

How did you find this special person anyways?

cheryjohns · 01-30-2013, 09:59 PM

Nah, I see it all the time on closing statements. The highest was $495. Yes, it's a fee imposed by the broker (simple reason - extra cash). They know they will get it from the agent or the client. My company does it - but it's only $100 and I pay it as a cost of doing business. Do I like it? No, but other than that one thing, I like my brokerage. I would leave them if they did $400 - that's ridiculous. The reason they give is the "cost" of holding those files forever, so it will be accessible to the client should they ever need it. Back in the day when you needed files, paper, file cabinets and storage space (and have to pay someone to dig through them if a file was needed) - that might have made sense. Now it's all stored on cloud technology - and that is extremely cheap. It's strictly a money-maker for the broker.

As to the OP's question, since she is getting a bonus (so to speak) - I would have her revise your agreement to where she pays it. Tell her you won't buy the house and will go to another builder without her. I bet that fixes it.

dalparadise · 01-30-2013, 10:06 PM

I don't think you're wrong to want out of the extra fee, but your reasoning is off. Why should your deal change because your agent is getting a bonus from the seller? you signed up to pay the extra fee independent of whatever commission your agent receives. If you had settled on a resale home with a 5% commission (2.5% per side) would you have made up the .5% difference for your agent?

City Love · 01-30-2013, 10:24 PM

Quote:

Originally Posted by cheryjohns

Nah, I see it all the time on closing statements. The highest was $495. Yes, it's a fee imposed by the broker (simple reason - extra cash). They know they will get it from the agent or the client. My company does it - but it's only $100 and I pay it as a cost of doing business. Do I like it? No, but other than that one thing, I like my brokerage. I would leave them if they did $400 - that's ridiculous. The reason they give is the "cost" of holding those files forever, so it will be accessible to the client should they ever need it. Back in the day when you needed files, paper, file cabinets and storage space (and have to pay someone to dig through them if a file was needed) - that might have made sense. Now it's all stored on cloud technology - and that is extremely cheap. It's strictly a money-maker for the broker.

As to the OP's question, since she is getting a bonus (so to speak) - I would have her revise your agreement to where she pays it. Tell her you won't buy the house and will go to another builder without her. I bet that fixes it.

That's ridiculous to try to hit up the buyer for more fees after collecting the 3%. Good thing you pick it up.

I've only seen it on the listing side... Your agency charges that extra for buyer's as well? I see it exactly as that, a cost of doing business which I deduct from my own end.

I guess I just hate nickel and dime'ing people.

kaiden22 · 01-31-2013, 04:55 AM

Quote:

Originally Posted by dalparadise

I don't think you're wrong to want out of the extra fee, but your reasoning is off. Why should your deal change because your agent is getting a bonus from the seller? you signed up to pay the extra fee independent of whatever commission your agent receives. If you had settled on a resale home with a 5% commission (2.5% per side) would you have made up the .5% difference for your agent?

Actually, yes. It specifically states that the real estate commission they are to receive is 3% and that we would be required to pay the difference if it's less than that. So we WOULD be paying them the extra .5%. I don't believe my reasoning is off at all - it's because of our selection that they are bonusing. We could just as easily decide to go with a resale or a different builder - they will get less commission and we will pay the $400. I would think the extra $3600 would be worth it so if our broker denies our request then we know to stay away from this firm in the future.

kaiden22 · 01-31-2013, 05:17 AM

Quote:

Originally Posted by City Love

Wow, someone is charging you an extra $400 as the buyer? That's not common, and kind of sleazy if you ask me. I've heard of some brokers adding extra fees on a listing to cover extra expenses, which I find silly. I've never seen them add it to buyer's.

Definitely ask them to waive that. I doubt they will though.

How did you find this special person anyways?

I had called on a property I drove passed that had automated listing information. The agent called me back and although we weren't ready to purchase at that time he set me up with a property search so I could watch the market. It wasn't until this last weekend that we actually met. I will refrain from using the firm's name since we are still in agreement with them, but it is interesting to hear that the fees not as common as I assumed. In hind site, we should have waited to sign the agreement. We'll see if they waive the fee or not. :/

kaiden22 · 01-31-2013, 06:09 AM

Quote:

Originally Posted by cheryjohns

Nah, I see it all the time on closing statements. The highest was $495. Yes, it's a fee imposed by the broker (simple reason - extra cash). They know they will get it from the agent or the client. My company does it - but it's only $100 and I pay it as a cost of doing business. Do I like it? No, but other than that one thing, I like my brokerage. I would leave them if they did $400 - that's ridiculous. The reason they give is the "cost" of holding those files forever, so it will be accessible to the client should they ever need it. Back in the day when you needed files, paper, file cabinets and storage space (and have to pay someone to dig through them if a file was needed) - that might have made sense. Now it's all stored on cloud technology - and that is extremely cheap. It's strictly a money-maker for the broker.

As to the OP's question, since she is getting a bonus (so to speak) - I would have her revise your agreement to where she pays it. Tell her you won't buy the house and will go to another builder without her. I bet that fixes it.

Thank you so much for the feedback. I will ask him to revise the contract and exclude the fee. Could we technically go to another builder without him or would that violate the agreement since we agreed that they would represent us? There doesn't seem to be much verbage in there about specific responsibilities or how to terminate the relationship but I would imagine this is a fairly standard broker contract. Our agent said we can just send an email, but I am sure there is more to it legally.

marksmu · 01-31-2013, 07:00 AM

Just more over-reaching from folks in the real estate industry. Its not a standard fee, especially not in Houston, and I would not pay it. Demand it be removed. $400 for the privilege of them helping you buy a house. The commission structure in about 50% of the transactions is already completely over-kill...to tack on an additional $400 is just greed....

Just as full disclosure, I have my real estate license, and I still find it sickening,

desertsun41 · 01-31-2013, 07:08 AM

Quote:

Originally Posted by cheryjohns

Nah, I see it all the time on closing statements. The highest was $495. Yes, it's a fee imposed by the broker (simple reason - extra cash). They know they will get it from the agent or the client. My company does it - but it's only $100 and I pay it as a cost of doing business. Do I like it? No, but other than that one thing, I like my brokerage. I would leave them if they did $400 - that's ridiculous. The reason they give is the "cost" of holding those files forever, so it will be accessible to the client should they ever need it. Back in the day when you needed files, paper, file cabinets and storage space (and have to pay someone to dig through them if a file was needed) - that might have made sense. Now it's all stored on cloud technology - and that is extremely cheap. It's strictly a money-maker for the broker.

As to the OP's question, since she is getting a bonus (so to speak) - I would have her revise your agreement to where she pays it. Tell her you won't buy the house and will go to another builder without her. I bet that fixes it.

No one mentioned the company who does this. I know who it is but won't tell either. Back in about 04 I noticed this rape extortion fee on my listing and I complained loudly, Finally the Listing agent said he will remove it as we were closing shortly. It was some time later I wondered if he just took it off his commission to make the deal happen. I won't use that company again bit I appreciate what he did.