Dear Joanne,
When my last closed it's doors by the way they charged $265 broker fee, I had many offices recruiting me. I met with many offices and decided on a discount brokerage to help sellers in this tough market. All of the offices I talked to charged a "Broker" fee which is just that, none of our "broker" fee goes to the agent. There was one large office that allowed the agent to raise the fee and keep the extra for themselves.
I agree that you should negotiate everything! Some brokers will not budge. My office explains it as a cost of doing business, setting up settlement, inspections, etc.
Right now, this is very common as are fees to the agent for making copies in their own office and using office space. Keep asking questions and go with an agent who can save you well more than $300 and make your home buying experience smooth and positive!

Real estate agent had nothing to do with toxic mortgages. Strongly believe buyers and lenders are responsible for their own liar loans. What did the real estate agent say the brokerage fee was for? Why did the first time homebuyer sign something they were unsure of? It sounds like the agent disclosed all fees. Don't understand?

Agents are over worked and under paid. And then when it is time for them to get paid, people try to complain and cut their comission. Take it easy on them!

In a minority of cases the agent has done nothing, but has certainly has their fare share of deals where they worked very hard for nothing. You should think of your agent as a professional consultant, with the knowledge to add value, negotiate in your best interest and answer all of your questions. Good agents deserve every penny for their professional services. They are one of the few professional occupations around that operate on 100% comission and the poor economy as of late has weeded out the bad agents.

In every other professional service industry you are charged an hourly fee for the time of the consultant.

As stated below the typical comission arrangement is 6% with 3% to listing agent and 3% to buyers agent. if the greedy listing agent refuses to pay 3% to the buyers agent (are they really representing their clients best interest by doing this?) then the buyer usually will make up the difference if they are satisfied... the real problem in most cases in the listing agent refusing to pay a full co-op fee

good luck!

Are you referring to a conveyancing fee? I just reread this and am wondering if you are being charged a $300 conveyancing fee. Or is this $300 going to the buyers agent?




Sean Dawes
Long and Foster Real Estate Inc.

Plano:

Thank you ! At last an agent who represents the interest of the buyer/seller. "Junk Fee" well said. I'd hire you in a heart-beat

Erica:

As a first time home buyer, my daughter was under the impression that this is a normal fee. Another words this is how she thought the system worked. The fee was not paid up front, it was to be paid at settlement and she wasn't aware it was negotiable. It is a junk fee because it's not applied to every one who walks in the door and the fee varies. I am convinced now that it is not just the banks that were at fault "some" realtors played a big part in these toxic mortgages. People just want a piece of the American dream and they listen to who they feel are "professionals" to get them in a house. Notice I said "professionals".

No--you didn't hit a nerve. It's just plain facts. All fees are negotiable. If you don't like any agent's fees--as a buyer's agent or seller's agent, don't hire that person. Period.

A broker sets his or her own fees. The buyer or seller doesn't have to agree to them. Move on.

Wow. Guess I hit a nerve. Kinda sad to know we are in the same business. Good luck to ya!

Plano--So don't hire a buyer's agent who has that fee. Simple.

It's a free market situation. If you feel it's wrong, don't use an agent who has such a fee structure.
Nobody has a gun to your head. Pick someone else to represent you.

Erica: I don't think I agree with the "There is nothing wrong with this" comment. Say the selling agents broker says they have to charge 6% commission. There is a 50/50 split. So therefor the sellers agent gets 3% and the buyers agent gets 3% AND a "Brokers fee"? Why should this be correct?

It is not the buyers fault that a broker charges certain fees to the agents to work there so why should they pay? As the buyers agent you got that 3%. Why should you get more than that?

As you can tell, I dont agree with this "Junk Fee"

Just as the seller's broker sets his/her fees, so does the buyer's broker. Many firms do charge a Broker Fee at settlement, to the buyer. There is nothing wrong with this as long as

1. Buyer understands that he/she will be charged this at settlement
2. Buyer agrees to pay this fee (that's on the Buyer's Agency Contract)

I've known agents to charge potential buyers $500 as an upfront "fee" to weed out any lookers from actual buyers. The fee would, of course, be reimbursed at settlement as long as the buyer agent gets what was contracted to the buyer with from the sellers broker.

For example. Let's say that a buyer contracts the agent for 2.5% of the sale of the home or $4000 (which ever is greater) and is also charged $500 nonrefundable up front for a "service" fee which will be reimbursed at settlement. Let's say that a home is then bought for $200K and the coop fee is 2.5%. This would be $5K going to the buyer's broker. On the HUD-1 Settlement Sheet, the $500 would come up as a credit for the buyer, thereby refunding the initial "fee".

Seeing that the fee is non-refundable, if the buyers choose not to go on trying to find a home, the agent would be paid for what homes he/she has show the buyers, giving his time, gas, etc.

And, for your information, the toxic mortgages were not caused by real estate agents alone (most just passed the client to the mortgage broker and lets them handle it.) I am not saying that some agents didn't get their hands dirty, and if they did, they should be charged as well. Plain and simple, it was the lenders giving money to people who could not afford a home in the first place and everyone knew about it from the government administration, down to the lenders, to the mortgage brokers, real estate brokers, agents, AND the buyer.

Should the agents have suggested to their clients to wait until they have money saved? Absolutely. But after suggesting what to do and clients continue on, well then it's not the agents fault. I know I've turned away my fair share of clients and there were others which continued on purchasing after I highly suggested having a good down payment.

Hope that helps,

Terrence Charest, e-Pro

I would agree with Sean's response that Buyer Representation Agreements are an important tool to spell out the terms of that relationship. In this market where commissions to agents are being negotiated down by lenders in a short sale, or by FSBO's, it's important that a buyers agent spell out if there is any situation where the buyer would be needing to contribute to the agent being compensated.

I don't, however, think there should ever be a time where an agent charges a retainer fee.

I would want more information about what the broker's fee was, and what it was for.

Realtors will sign a buyers agreement with a client. For example if they were to take a client around to 20 homes, on that agreement it states that the buyers agent is to be paid "x" from the sale of a home. Generally this is offered by the seller. So typically lets say there is a 2.5%-3% commission offered to the buyers agent. But lets say there is either a for sale by owner or a homeowner only offering 1% to a buyers agent.

That agent could be working with the buyers for weeks and weeks, getting them pre-qualified, driving them around, and searching and not get paid on a for sale by owner. This is why we have these agreements to prevent buyers from using realtors for services then avoiding them to save money after working with them for a period of time.

I hope this helps.

Sean Dawes
Long and Foster Real Estate Inc.