Agent2Agent in Estero>Question Details

Kevin E Yank…, Real Estate Pro in Bonita Springs, FL

Should agents be charging Buyers or Sellers a transaction fee to cover E&O insurance costs or desk fees charged by their Broker?

Asked by Kevin E Yankow Broker/ Owner, Bonita Springs, FL Thu Mar 21, 2013

I say NO! If Errors and Omissions insurance is purchased by the broker and charged to the agent, same for desk or franchise fees, it shouldn't be passed along to the client. In the day of hidden fees the last thing a Buyer or Seller should experience at the closing table is a surprise. KEY Real Estate has no hidden fees and charges no transaction costs :)

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No that's the cost of an agent doing business. All buyer and seller should refuse to pay this fee. It's never existed two or three years ago and all the big national brokerage firms essentially rolled it out together.

Like you our company never changes such a fee and agents who say it's to cover desk cost or E&O are either confused or misleading their clients as the money goes directly to the franchise they work for.

If the majority of buyers and sellers simply took their business elsewhere these fees would vanishin less than 6 months. As long as their foolish enough to pay them they'll be around.
1 vote Thank Flag Link Fri Mar 22, 2013
Real estate fees & commissions are always negotiable, what I think we as an industry lose sight of is the total picture & our overall value in the market. We as an industry look like shady used car salespeople when we try to add “Junk” fees to the transactions because our broker tells us to. This is especially true when we just sold a 400k home w/6% commission coming to us because we got both sides 24K, then we ask for ”other fees” get real, we look like Al Capone. By the same token when we sell a 20k property and our commission looks like 2% minus a 50-50 broker split aka net 200.00 or less, we can’t even begin to process the transaction and stay in business. At some point the government may step in and “regulate” our industry just as they have the mortgage broker industry. This may be needed! Our biggest “problem” is the business model (pyramid system combined with the % system) with the possibility of making a good living. Realtors ® need a business model which focuses on its members doing at least 39 transactions per year with the avg Realtor® making a 100k per year. This will never happen with the lax rules for being a Realtor® and to be frank this isn’t the industry business model. Part-time agents have no place in real estate, and this needs to be a full time job for Realtors® who are “working”. So in answer to your question for me it really depends on the total picture of the transaction. Example: I charge a non-refundable fee to submit paperwork to Fannie Mae, credited if the offer is accepted.
1 vote Thank Flag Link Fri Mar 22, 2013
Why not?
As agents we charge each other for items that lack value.
As agents we allow business to charge us for services that lack value.
As agents we charge each other for those introductions that have no material value.
It is transparent this question is NOT about ethics of augmenting revenue through goof ball fees, but to promote a brokerage that pretends to not add fees to a transaction. So, is a fee considered 'hidden' if it in reality was simply 'forgotten.'
Business models vary within this business. To declare one faulty while another is righteous is a bit silly, especially considering the forum (guilty of chronic misrepresentation) you have chosen to express you unhappiness. That is what is so great about real estate, the consumer had demanded and has received a wide spectrum of options from which to chose the right solution for their problem.
Some choose DIY.
Some choose pay as you go.
Some choose discounters.
Some choose flat fee.
Some choose part timers
Some choose newbies
Some choose establshed agents
Some choose full service
Some choose attorneys
And each may present a unique fee schedule. Hey, I found exactly the same thing at Best Buy when I looked into buying that new computer. Yes, I wish I could avoid being targeted by all those fees, but it just the way business is today. We don't have to like it. AND the consumer can ALWAYS SAY NO!
They don't seem to have a problem with that from my experience.

1 vote Thank Flag Link Fri Mar 22, 2013
Seem to have touched a nerve with Kevin! There's nothing inappropriate about the question (though it may be a touch self-serving). I feel strongly that these fees and buyer/broker agreements are an unfortunate new twist to the industry. It muddies the waters and it forces people to stick with an agent whether they like them or not. I understand the frustration from which they sprang, but I still don't like them. It all rests with the consumer, though, as long as they are willing to put up with them, they will continue to exist. And most consumers will walk into an agency and be told there's a fee or they have to sign an agreement and they just take for granted that this will be true wherever they go.
1 vote Thank Flag Link Fri Mar 22, 2013
This is like taxing an doesn't feel good. Agents don't create these fees...they come from the company level and agents are left with passing them along to the customer, much like home warranty programs.

In the event customers refuse to pay these fees, what is the likelyhood of the agent being left holding the bag for this guess is, pretty good.

1 vote Thank Flag Link Fri Mar 22, 2013
What an agent charges a client and what a broker charges its agents is between them.
I think is question is in appropriate.
However, if you want to work for me 40 hours per week for $10 per week salary with no benefits, I would interview you.
1 vote Thank Flag Link Fri Mar 22, 2013
Doctors and lawyers do not charge for their E&O in addition to their fees. Real estate agents are no different.

P.S. Nice plug at the end.....
0 votes Thank Flag Link Sat Mar 23, 2013
Hi Kevin,

I agree. I advise my clients of any fees during our initial meeting to allow them to make the decision if the want to proceed. This way there are no surprises as we move forward.
0 votes Thank Flag Link Fri Mar 22, 2013
Ahem... ahem... ahem... ladies and gentlemen, agents have no right or legal authority to charge their clients ANYTHING. All agreements with clients are between the BROKER and the CLIENT. An agent is only a party to the extent that the BROKER authorizes the agent to act on his or her behalf. Ergo, the question is moot.
0 votes Thank Flag Link Fri Mar 22, 2013
In my opinion any fees charged by the office should be discussed up front and no surprises ,unless they are from the lender and those are sometimes unavoidable.HENA BROKER
0 votes Thank Flag Link Fri Mar 22, 2013
It should not be an extra cost, it is part of the cost of doing business for the agent. if an agent discloses up front they charge an additional fee, any savy buyer or seller will soon see others do not and they will lose business over it.
0 votes Thank Flag Link Fri Mar 22, 2013
I think we'd all agree that there should be no "hidden" fees and no "surprises" at the closing table. That is the reason for the Buyer Agreement for Broker Compensation form which is presented up front, explained and signed by the Buyer/Seller when a contract is written.
0 votes Thank Flag Link Fri Mar 22, 2013
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