What do you get from paying real estate fees?
Because of our experience in Real Estate we see a lot of things. Many times we have gone to a closing where the other people were charged a mysterious fee by their agents and brokerages. We have always wondered what this fee is? What is that for? Sometimes the fee is a legal fee mandated by a broker. Other times however, this fee is illegal!
Sometimes the broker or the agent doesn't even realize that they are charging their clients an illegal fee. They may justify their fee by citing many other brokerages who have it or by claiming that the fee has been around for a long time. The idea that a lot of people are doing something does not make it legal.
Most real estate brokerages have a commission and some will charge an additional $150 to $250 fee. This $150 to $250 extra fee could be a junk fee. Recent legislation has been passed to crack down on these junk fees. Washington Post columnist Kenneth R. Harney reported "In a decision late last month that is sending shudders through the realty brokerage industry, U.S. District Judge Virginia Emerson Hopkins in Birmingham, Ala., ruled that when a realty firm charges clients an 'admin' fee, for which no specific settlement services are performed, the fee violates federal law,".
How do you know you aren't being charged illegal bogus fees? First rule of thumb: only agree to a set commission with no other fees. If there are other fees, you might want to get a second opinion. Second rule of thumb: go with someone who is credible that you trust and has extensive experience.
1 comments:
Dave, I believe it's all in the disclosure. I charge an upfront fee in addition to my commission on short sale transaction. I charge this fee to offset my expenses related to handling massive amounts of paper work on a transaction that I have less control over. Meaning it may or may not be approved by the lender after months of hard work. BUT.....my fee is fully disclosed and it is earned at time of listing. It is not refundable and it is not applied towards the commission.
In my area there are companies that pass their admin fee down to the selling agent! They offer a co-broke of say 2%-$250. That's craziness in my opinion.
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