Real Estate Agent Charging a Transaction Fee (sales, broker)

Everdeen · 02-21-2012, 07:56 AM

I'm still mad.

We have been looking at homes and, yesterday, decided to put an offer on one.

Our original real estate agent, the wife of a colleague of my husband's, showed us some houses, but felt that we were too far away to provide us with good service and referred us to an associate closer to us. They are sharing the commission.

The 2nd agent (actually, a husband/wife team) told us that their office charges a $400 transaction fee at close of escrow. I kinda flipped out on him during the conversation. He told me that the office charges it and that if we do not pay it, he has to pay it himself. He said at one point, "We got to keep our lights on somehow."

My response to that was that in the past, the "lights" were paid out of the commission. The listing agent's office got half, and that was split with the listing agent's broker who, in turn, kept "the lights on" with the commissions from the agents who work under his or her broker's license. The same arrangement is in the buyer's agent's office.

He told me that everyone charges it now. Maybe some small mom and pop shops don't, but that is not the norm. I finally told him that I was going to check around to see if this was the industry standard now. If it is, then it is. From what I have read, some companies do charge this and it does come out of the agents fee if they do not get it from the client.

Now, I am between a rock and a hard place. We care about our original agent. We really like her husband who my husband works with.

Is this an industry standard? I think it is BS and a way for the corporate office to increase their bottom line, but we do not want to cause a strain in our relationship with our original agent.

NU2LV · 02-21-2012, 08:36 AM

We were charged a 350 fee and it was supposed to be for "record keeping"

macgeek · 02-21-2012, 08:43 AM

What is $450 on a $150,000 deal.. didly squat!
if it helps the deal move along, just pay it!

Jonathan

ScoopLV · 02-21-2012, 08:51 AM

This transaction fee pays for the office staff who actually write the deal and handle closing. (The agent can't be bothered, usually. Easier to dish that off to someone else.)

During the boom, this fee was absorbed by the buyer's agent. But now that a "deal" usually means a $3-5K commission that must be split between the broker and agent, this fee is often passed on to the buyer.

The agent should have spelled this out in the agency contract. (Did you sign an agency contract?). Your agents know that you'll eventually cave and pay the money just to "move the deal along." But this is just another example of why I don't use real estate agents.

von949 · 02-21-2012, 08:52 AM

We got charged all kinds of ridiculous nonsense charges at closing. Some as low as $12 and as high as $600. I could have disputed every single penny on the final bill but I told myself why bother. Plus I didn't need the headache. Maybe that $12 put food on a family's table somewhere.

WestieJeff · 02-21-2012, 08:53 AM

Pretty much is standard nowadays. $400 is within range. My feelings are the same as yours, you're already getting thousands of dollars in commission and this feels like nickle and diming.

My biggest problem is NOBODY tells you this upfront so it isn't until you've found a home and are emotionally invested in both the home and the agent, then they spring it on you. If they told you up front, this fee would disappear quickly since it would be price shopped. Redfin partner agents in Vegas give 15% of their commission back to the buyer, which is more than the $400 transaction fee, so I know it's not "required" to keep the lights on.

MollieW · 02-21-2012, 08:57 AM

Just paid 400.00 for mine and am paying 350.00 in California as a seller

von949 · 02-21-2012, 08:57 AM

Quote:

Originally Posted by ScoopLV

This transaction fee pays for the office staff who actually write the deal and handle closing. (The agent can't be bothered, usually. Easier to dish that off to someone else.)

During the boom, this fee was absorbed by the buyer's agent. But now that a "deal" usually means a $3-5K commission that must be split between the broker and agent, this fee is often passed on to the buyer.

The agent should have spelled this out in the agency contract. (Did you sign an agency contract?). Your agents know that you'll eventually cave and pay the money just to "move the deal along." But this is just another example of why I don't use real estate agents.

Some of my in-laws don't use real estate agents either. They use other family members that used to have a RE license. Does seem like its more of a hassle to buy without an agent though. Definitely much easier during the boom, now, not so much.

ScoopLV · 02-21-2012, 09:06 AM

Quote:

Originally Posted by von949

Some of my in-laws don't use real estate agents either. They use other family members that used to have a RE license. Does seem like its more of a hassle to buy without an agent though. Definitely much easier during the boom, now, not so much.

Actually, it's much LESS of a hassle. It's more work, but less hassle. The only surprises come from the listing broker. That removes half of the headaches right there. You spend a lot less time waiting for phone calls to be returned, as well.

Vegas Joe · 02-21-2012, 10:17 AM

The fee has always been there. The commission split with the broker goes to the broker. It is his profit. The fee is for office and help expenses. In the past the agents and brokers split the fees and paid them out of commissions. But that was when houses were selling at huge markups and so fast even a bad sales person could sell many in a week. Now they are more stingy because they might sell only 1 house in a week and only make $2000 out of it.