Home Buying in Coconut Creek>Question Details

Jeix40, Home Buyer in Coconut Creek, FL

Brokerage fees by a buyers agent???

Asked by Jeix40, Coconut Creek, FL Thu Jul 22, 2010

My agent is charging me brokerage fees of $695 on closing of the property. This is new to me as far as I’m concerned as she is supposed to be a buyer’s agent. Why is she passing her fees to me when she will get her commission as usual when the deal is done.

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25
This may not be the issue in your market but in my market there are many foreclosed properties selling below $40,000. As a protection for the agent, the practice is to include a minimum flat commission that must be generated from the deal. If the threshhold is not met, the buyer is responsible for paying the shortage. On some of these lower-priced properties, there is not enough commission generated for the buyer's agent to pay the broker's transaction fee. However, this is all part of the buyer's agreement and must be disclosed to the buyer upfront.

Millie C Lumpkin, Realtor
Century 21 Pro Team
(708) 213-6141
Email: mlumpkin@c21proteam.com
3 votes Thank Flag Link Fri Jul 23, 2010
Did you sign a document agreeing to this fee? If yes, then pay it. If no, then complain to the DBPR. Here's the link: http://www.myfloridalicense.com/dbpr/consumers.html
2 votes Thank Flag Link Fri Jul 23, 2010
I think he might be charging a coordinator fee. Some buyers agent use Escrow coordinators to ensure that escrow runs smoothly. Some agents cover the expense themselves and some pass it along to the buyer.
Hope this helps.
2 votes Thank Flag Link Thu Jul 22, 2010
I have worked at 3 RE companies.
The first one was a regular 30/70 split with no fees to buyers, family own great atmosphere.
The second was corporate giant, started at 58/42 split with fees of 295 to buyer plus 250 from agent per transaction + 6% from top for corporate profit. That was a dry and sterile location.
Now I am with a 100% broker, no fees to agent, no fees to buyer, everyone is friendly and ready to lend a hand.

If so many good agencies can "keep records for 5 years" without requesting a penny from clients, clearly those who have fees just want to feed their corporate pockets. I love been able to tell my clients "and we charge no hidden fees at all".

Tony Vega
Charles Rutenberg Realty

http://www.SearchKissimmeeHomes.com
1 vote Thank Flag Link Sat Jul 24, 2010
We agree, the wine is far to sweet. I like Merlot. Just back from Sam Snead's and had a great Down Under Merlot.

And I agree, I don't care what any one charges, how much how little, nor do I care what they charge for. I just think they need to be very upfront what they are going to charge for way up front and not try to slip is by on the closing statement. I have seen this done and it's a ugly practice.
1 vote Thank Flag Link Fri Jul 23, 2010
Unless this fee is in writing in the paperwork that was provided to you by the Agent you are not responsible for paying it--and in fact there is a crackdown going on by many agencies on the admin fees being charged by many of the brokerages--unless that fee is disclosed UPFRONT and is in writing in the agreement signed by the Buyer or Seller it cannot be charged and may be subject to legal action.
1 vote Thank Flag Link Fri Jul 23, 2010
Thumbs up to Mark.

Glad to see Realtors don't whine in Harmony.
In Mount Dora we are allowed to Wine, but Whining is not allowed.

John
1 vote Thank Flag Link Fri Jul 23, 2010
How things vary state to state, and brokerage to brokerage. When you cut to the core of your question, what doesn't sit well with me is the fact that you have been surprised by a fee. That seems to me to be a disclosure issue and I would suggest you discuss that with your agent and her/his manager/broker if need be.

Agents work hard, and when you do understand how the money flows, our split is generally a lower take away than most consumers imagine. But discloing fees and who pays what is essential.

Good luck getting clarification and resolution with this matter.
Best,
Jeanne Feenick
Unwavering Commitment to Service - in New Jersey
Web Reference: http://www.feenick.com
1 vote Thank Flag Link Fri Jul 23, 2010
J-

1) Unless you agreed to this fee in writing in advance, you cannot be charged the fee.
2) Unless a tangible service is being provided to you for this service, you cannot be charged (RESPA)
3) The fee, if charged, MUST show on the HUD-1 Closing Statement showing exactly what tangible service the fee was for. (RESPA)

If the agent is trying to recover some of their business costs - it must show on the HUD-1 Settlement Statement as "Additional Commission" - they cannot "hide" it as a junk fee.

Everything is always negotiable.

Best of luck,

Thom Colby
Broker / Owner & Certified HAFA Specialist
Thom Colby Properties
Newport Beach, CA
Moving Lives Forward (TM)
We NEVER DOUBLE-END a Transaction in our Brokerage. There is NO benefit to the Seller or Buyer but only benefits the Agent.
888-391-5245 Direct Cell
THOM@THOMCOLBY.COM
0 votes Thank Flag Link Sun Aug 15, 2010
If you never signed a buyers agency agreement that stipulates a commision to the buyers agent, and the agent never said anything about a buyers agent commision then you shouldn't pay this -- even if you are buying a $30,000 condo.

On the flip side, it's perfectly reasonable for an agent to charge a buyers agent commision on certain transactions so long as he tells you about it first and you agree to it and sign a buyers agency agreement. If he's just trying to sneak it by you then that in my opinion is not ethical and you should challenge it.

The fact of the matter is that there is no profit in really low priced transactions if the buyers agent isn't charging a buyer agent commision. For example, If you're looking for properties in the $40,000 range, a typical commision paid to the buyer agent by the seller is 3% of $40,000 x the split to the agents broker which is $1200 to be split between the broker and agent. The result is an amount at which no rational realtor would want to assist you without charging a buyers commision.

Personally I don't charge any buyers agent fees unless the price is below $75,000, and I always advise my clients and we sign all buyers agency documents before showing properties. Its the only way I can provide a quality service to those buyers and stay in business. If a client doesn't understand its because they just don't have enough information.
0 votes Thank Flag Link Sun Aug 15, 2010
Remember, agents never complain when the house "sells itself" - when it's priced right and do "little work".

Residential work can be hard - you take the "good" (above) with the not so good.

I'm only supposed to commercial for my broker.

He asked me why I did some local apartment rentals -

1. It filled in some gaps

2. I met more future buyers this way. So that "$300" crappy apartment rental commission turned out to be a $105,000 commission to me 1 year later on a $3.5 million commercial sale.

You have to be smart to survive - and not so greedy.

Think where your next meal is coming from. There is the thing called the Internet.
Web Reference: http://www.rentlaw.com
0 votes Thank Flag Link Thu Jul 29, 2010
Thanks John. I operate in the same way as Millie in Chicago does. Most agents blow off buyers looking for a $10,000 to $20,000 bargain. Let's face it, 3% of not much is really not much. I'm very up front with my clients, as long as they guarantee me a reasonable minimum income, I'll do whatever it takes to make their deal happen. If they don't want that deal then no hard feelings they are free to find someone who will work for a $300 commission (and good luck with that). So far only one prospect has ever said not to that. The typical comment I get is, "We don't expect you to work for free." Hey, you get what you pay for.

Oh, that reminds me John, you do have a nice winery up there don't you. A little sweet for my tastes, but a fun side trip.
0 votes Thank Flag Link Fri Jul 23, 2010
Jeix40
If you signed an agreement paying her $695 in additional commission pay it. Did you buy a house forty cents on a dollar? Was it a short sale, foreclosure or distressed property. Was it less than $75,000?

I dont think you can appreciate how much more work we do and for how much less in this market.

Average house 3 yaers ago, $275,000 @ 3.5% = $9,625.00. Half to the house $4,812.50 leaves $4,812.50 to the agent that went around looking at houses with their gas, did research and advised you on price and terms, maybe introduced you to a lender, insurer, inspector, mover etc. Now 60 days later and after all the fires are out, you close and are ready to begin a life in your new home. Total time spent in this example by the agent on your behalf 75 days or for simplicity 2 month 2 weeks. $4,812.50 divided by 10 weeks is $481.25 per week or $12.03 per hour BEFORE all the taxes, expenses, licenses and being available to you almost 24/7.

Now look at the same house in todays market. Sale price is $75,000, commission offered by bank 2.5%, 90 days with a good bank and organized agent to close.

$75,000 x .025 is $1,875.00 split with the house = $937.50 divided by 13 weeks = $72.11 or $1.80 per hour with HIGHER gas prices and higher fees and costs and taxes. And before you can even blink, lets say you actually close in half the time, 45 days, that doubles her pay to a whopping $3.60 per hour!!!

We selected this industry because we love it, most of us anyway and we take the fgood with the bad, but get real here. If your happy with the house and her service, pay her and go enjoy your house and live happliy ever after. If you didnt sign it, DONT pay her, but dont waste your timer saying, you didnt know what you were signing, you initial and sign each page at the bottom for a reason.
0 votes Thank Flag Link Fri Jul 23, 2010
Hello,

Check all of your paperwork and if there is no agreement signed by you to pay the $695 garbage fee, tell her you will ABSOLUTELY NOT pay it!

I see well known firms charging $300 fees to buyers and sellers and even the buyer's agent. It's very greedy especially on a $300k transaction that pays broker $9k in commissions.

All the best,
Alma
0 votes Thank Flag Link Fri Jul 23, 2010
Dear Jeix40,

Remember everything is negotiable. Call other realtors and see what their brokerage fees are. My office is $250.00. The office has to keep your file for five years. This is not a fee the agent keeps.

Susan Penn, PA
SFRShort Sales& Foreclosures Certified
2000 Main Street, Weston, Florida
954-557-5993
0 votes Thank Flag Link Fri Jul 23, 2010
The first thing you have to do is check to see if this amount was included in the buyer broker agreement you signed. This fee shoudl have been disclosed up front before signing. If it was not, you should not have to pay it. Most buyer agents will not charge you any fees as they get paid their commission from what the listing broker states in MLS to be paid at closing.

You shou;d check your contract and let your buyer broker know how unhappy you are. If you have not bought a house yet, find a new agent and asked to be released from this greedy contract.

Good luck with your purchase
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Fri Jul 23, 2010
You should ask your agent what document he/she had you sign that authorizes the brokerage fee. It may be in the purchase agreement you signed. For the record, Keller Williams Greater Cleveland West in Westlake, OH does not charge any such fees, but competitors in our area do.
0 votes Thank Flag Link Fri Jul 23, 2010
I am not sure what thoes fees are for but, most office do charge a tranaction fee and it is not from the agent it is from her office. They can range from $100 - 0ver $1000. My office charges $395 if you don't pay it she then has to pay it. The broker office has to store you file for the next 5 yrs, that is what our fee is for. Ask her what you paying for, it is your right
0 votes Thank Flag Link Fri Jul 23, 2010
here is a great read for you

http://www.law.cornell.edu/uscode/uscode15/usc_sup_01_15.html

then we need to go to case law please let me know when you are ready as there are several great cases \
to review here.
0 votes Thank Flag Link Thu Jul 22, 2010
How much of 15 USC have you read Tammy?
0 votes Thank Flag Link Thu Jul 22, 2010
Hello Realtors, You are getting into Anti-Trust issues here. Best be careful about your wording and such.
0 votes Thank Flag Link Thu Jul 22, 2010
Kathleen, do you tell your clients about the fee when you first start working with them or do you just wait to the closing?
0 votes Thank Flag Link Thu Jul 22, 2010
Here at Keller Williams Brd Lakes we have a $289 brokerage administration commission fee which is a record/ and adm fee on either side of the transaction. That does not go to the agents. An Agent would get whatever the MLS listed commission (2-2.4 % is the average) is paid out by the seller to the buyer's agent's brokerage. Then the agent gets a split out of that. When you understand the fees, commissions and then consider our expenses, insurance, marketing, web sites, office/desk fees, licensing, continuing ed, transportation, memberships, MLS fees- you get a clearer understanding of how things really are.
Web Reference: http://topbrainerdagent.com
0 votes Thank Flag Link Thu Jul 22, 2010
I should tell you my Broker charges me $ 495 at each closing, I take care of this fee out of my commission.
0 votes Thank Flag Link Thu Jul 22, 2010
And others charge Record retention fees. Unless this was told to you at the beginning, like in writing, you may have reason cause to object to paying them. Some times this is the fee for their E/O insurance, you are paying the insurance In case you need to sue them.

I guess everyone can run their business anyway they want. Once a Selling agent was going to charge my client $750 for Record retention. I stood up, grabbed my client told the agent I was going to sue him for my commission and walked out of the closing. He came running after me in the parking lot saying he was going to pay the expense out of his $8,000 share.

John
0 votes Thank Flag Link Thu Jul 22, 2010
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