Home Buying in Los Angeles>Question Details

Dbagirlie, Home Buyer in Los Angeles, CA

Closed on my house last week. Now my realtor slaps with a $1000.00 bill for credit repair fees.

Asked by Dbagirlie, Los Angeles, CA Wed Jun 20, 2012

Shouldn't this be paid out of her comission? Is this legal? I knew she was doing a credit repair, but she never said it would cost extra.

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Answers

21
Gregorio Denny’s answer
I would love to know what law allows an agent to collect a fee for credit repair. Last time I checked, an agent wasn't even authorized to pull a credit report much less counsel anyone regarding the content. I would get it in writing that this agent is attempting to collect credit repair fees outside of closing and go directly to the following link: http://www.dre.ca.gov/cons_complaint.html
2 votes Thank Flag Link Wed Jun 20, 2012
You need to read the law Ron. It's a shame as an agent you don't know it.
See The Credit Services Act of 1984 (Civ. Code §§ 1789.10 et seq.)
Flag Thu Jun 21, 2012
Gregorio,
There are no requirement to have a law that allows you to earn a living... if you do a service from someone and you have an agreement to get paid for it, then you should get paid for it... whether that payment is done through an escrow or outside of the escrow....
Flag Thu Jun 21, 2012
As presented, it sounds as if you agent is way off base with this.....BUT, I have the feeling there is much more to this scenario than meets the eye. My recommendtion is to be in touch with his/her broker and ask for a clarification on this. They will be able to set the records straight.

Good luck,

Bill
1 vote Thank Flag Link Wed Aug 1, 2012
As Dorene said :
"I would advise you to look over the contract you signed and agreed to for the answer to your question. Since we do not have access to it, we cannot advise upon it. "

Sometimes if Seller and Realtor agree to the Realtor pay for the repairs, provided the seller authorizes Escrow, to reimburse the Realtor out of the seller's proceeds at closing.

Exceptions apply if it is short sale
1 vote Thank Flag Link Fri Jun 22, 2012
Let me rephrase for you then Ron; they should contact the attorney general. That's a lawyer that won't cost them a penny.

It's pretty sad that so many openly violate the law and even more shocking that they readily admit it in an open forum such as this.
1 vote Thank Flag Link Thu Jun 21, 2012
FYI

From CALIFORNIA LAW
The Credit Services Act of 1984 (Civ. Code §§ 1789.10 et seq.)

"Credit services organizations (also known as "CSOs" or "credit repair services") do not provide credit. Rather, CSOs offer to obtain loans or extensions of credit for consumers who have experienced credit problems, or to correct or improve such consumers' credit records.

D. What must every CSO do?

File a registration application with, and receive a certificate of registration from, the Department of Justice (Attorney General's Office) before doing business in California. (Civ. Code § 1789.25.)

Obtain a $100,000 surety bond from an admitted surety in favor of the State of California for the benefit of any person damaged by any violation of the Act. (Civ. Code § 1789.18.) (The bond must be maintained for two years after the CSO stops doing business in California.)

Give the buyer, before the contract for services is signed, an information statement that complies with Civil Code Section 1789.15 (described below). The CSO must also maintain for 2 years a copy of the statement signed by the buyer and the acknowledgment of receipt of that statement. (Civ. Code §§ 1789.14, 1789.15.)

Not provide any service to a buyer except pursuant to a written contract that complies with Civil Code Section 1789.16 (described below). (Civ. Code § 1789.16.)

Complete the agreed services within six months after the date the buyer signs the contract for services. (Civ. Code § 1789.13(b); see Civ. Code § 1789.16 (a)(3).)

Maintain an agent for service of process in this state. (Civ. Code § 1789.13(j).)
E. What are CSOs not allowed to do? (Civ. Code §§1789.13, 1789.17, 1789.19(a).)

A CSO (or a salesperson, representative, or independent contractor) cannot:

Charge or receive any money or other consideration until it has fully performed the agreed services. (Civ. Code § 1789.13(a).)

Charge or receive any money or other consideration solely for referring a buyer to a retail seller or other credit grantor for an extension of credit, if the credit is, or will be, based on substantially the same terms as those available to the general public, or on substantially the same terms as the buyer could have obtained without the CSO's assistance. (Civ. Code § 1789.13(c).)

Make, or advise the buyer to make, any untrue or misleading statement to a consumer credit reporting agency, or to any present or potential creditor, such as untrue statements about the buyer's identification, home address, credit worthiness, credit standing, or credit capacity. (Civ. Code § 1789.13(d).)

Remove, or assist or advise the buyer to remove, accurate and non-obsolete adverse information from the buyer's credit record. (Civ. Code § 1789.13(e).)

Create, or assist or advise the buyer to create, a new credit record by using a new name, address, social security number, or employee identification number. (Civ. Code § 1789.13(f).)

Make any untrue or misleading representation, or engage in any fraudulent or deceptive act or practice, in the offer or sale of its services. (Civ. Code §§ 1789.13(g), (h).)
Advertise its services without being registered with the Department of Justice (Attorney General's Office). (Civ. Code § 1789.13(I).)

Transfer or assign its certificate of registration. (Civ. Code § 1789.13(k).)

Submit a buyer's dispute to a credit reporting agency without the buyer's knowledge. (Civ. Code § 1789.13(l).)

Call a credit reporting agency or use its toll free number and represent the CSO as the buyer without the buyer's prior authorization. (Civ. Code § 1789.13(m).)

Attempt to have a buyer waive any rights under the Act. (Any such attempt is a violation of the Act, and any such waiver is void and unenforceable.) (Civ. Code § 1789.19(a).)

Breach the contract or any contractual obligation the CSO has with the buyer. (Any such breach constitutes a violation of the Act.) (Civ. Code § 1789.17.)"


If your "REALTOR®" did any of the prohibited or didn't do any of the required, I'd contact an attorney if I were you. Maybe that will stop them from practicing outside of their scope. It's rampant here!
1 vote Thank Flag Link Thu Jun 21, 2012
When in doubt, look at everything you signed! Conversations come and go and people often don't hear what they'd prefer not to! I recommend reviewing all paperwork you signed with your Realtor. If you have questions, I would suggest going to the agent's broker.
1 vote Thank Flag Link Wed Jun 20, 2012
That is a open, candid and respectful conversation you should have with your Realtor. It seems to me she went beyond the call of duty... I do not work with people for whom I need to work on credit repairs because it takes too long for me and it does not fit my business model... so it seems like she went beyond what I would do.. you should thank her, give her the fee she earned and then take her to dinner and refer her more clients!

What goes around, comes around!

If you agree with my answer give it the thumbs up.
Is nice to see Realtors doing a great job for their clients!

Ron Escobar, MBA
Broker & General Contractor
ron@select-real estate.com
1 vote Thank Flag Link Wed Jun 20, 2012
Often, I repair credit for my borrowers.
I am very, very up front about the cost. And in this case, especially $1000. Thats a tall order.

That should not be paid out of her commission, as she was helping you. And, as stated below, had she not helped you clean up your credit, you would not be in your home.

I believe in good karma, being kind and doing the right thing.

She helped you and it sounds like she did a fine job at it. You should pay her and thank her for her help! :)
1 vote Thank Flag Link Wed Jun 20, 2012
FINALLY a voice of reason. Thumbs up BILL!

Do any of you really think DBAGIRLIE has disclosed sufficient information for folks to go off the deep end like Gregorio Denny, Mortgage Broker or Lender, California?

The sound bite of data provided is to get the response desired. Wow! How quickly we throw others under the bus...with only a sound bite to work with.

A prudent adviser would request to see the contracts. What may have been agreed to 6, 12 18 months before the purchase often gets forgotten when the bills come due. We do not have the facts.

Another example of "No good deed goes unpunished. "

As Ron Escobar, Broker, Agent, Beverly Hills, CA pointed out, you should be doing EXACTLY THE OPPOSITE of what you are doing now.

Wishing you the very best,
Annette
0 votes Thank Flag Link Thu Aug 2, 2012
Some very good answers here. I have to agree with Gregorio 100%...what is an agent doing getting involved in credit repair? I won't presume to know the specifics of your situation...and I suspect Bill Eckler is very much on base that there is more to this story than meets the eye...however, I do think an agent..any agent...is getting on a slippery slope to get involved with any kind of credit repair issues.

I work with reputable credit repair companies and have my clients sign up directly with them. It is not the highest and best use of my time to spend in credit "fixing" and I want the consumer working directly with the credit specialist. It keeps my reputation...and my licensure...in tact.
0 votes Thank Flag Link Thu Aug 2, 2012
Plain and simple....a Real Estate Agent is allowed to help with credit, but not allowed to charge for these services. There are very specific laws pertaining to this....those of you that responded by stating that you've "helped clients" but didn't charge that much are lucky the State of California doesn't fine you.
0 votes Thank Flag Link Wed Aug 1, 2012
Dear Db girlie,

I would advise you to look over the contract you signed and agreed to for the answer to your question. Since we do not have access to it, we cannot advise upon it.
One Thousand dollars does not go that far when a client has to do home repairs, so it just depends upon the condition of the home and what had to be taken care of in order to sell.
0 votes Thank Flag Link Fri Jun 22, 2012
Dbagirlie,

Your REALTOR should not be chargeing you any fee at all outside of escrow.

A $1000 fee for credit repair sound like something Tony Saprano would try a pull. That being said unless you had a written agreement to pay for a service, you are under no contractual obligation to pay for it. Realtors to my knowledge are in the business of selling Real Estate not repairing credit.

You should:

1. send a copy of the bill via certifed mail to his/her broker with a letter of explaination of whatever service he/she claims to have provided you that yields a$1000 fee. The broker needs to be informed of this kind of action by realtors working under them.

2. contact the california Department of Real estate and report this. This is wrong on so many levels!!!!!! Now I guess I have heard it all.

Best Of Luck to You,

Kawain Payne, Realtor
0 votes Thank Flag Link Thu Jun 21, 2012
A semi-decent attorney would charge $5K retainer... a good one $20K retainer and this is a $1K dispute? ok... that is probably bravado and not advice.

:)
0 votes Thank Flag Link Thu Jun 21, 2012
I agree with Claudia: if your loan agent helped repair your credit which may be crucial to secure your home loan, then he or she should get paid for; as long as it's a reasonable amount, the agent explained to you how to proceed, and made disclosure to you on the fee. Maybe the disclosure part is what your agent failed to do; if this is true, then it's agent's fault. I recommend you have a candid conversation over this issue with the agent and hopefully reach some kind of win-win agreement, after all, he or she did work extra effort to get you the loan and the house.

Daniel Shi
dshi@sogorealty.com
1.888.785.8818 ext.100
http://SoGoRealty.com
0 votes Thank Flag Link Thu Jun 21, 2012
Did she do the credit repair or did someone else? If it wasn't charged through escrow then you should have had a separate contract with whoever provided the service. Ask for the documentation/contract to support the charge.
0 votes Thank Flag Link Wed Jun 20, 2012
Congratulations !

I don't think it's legal like Gregorio stated below. It would be up to you to make this "charity donation." : -)
0 votes Thank Flag Link Wed Jun 20, 2012
There are legalities and there are morals. Legally, there is a question of your consent. But since you knew credit repair was occurring, on your behalf and to your benefit, morally isn't it something you want to cover. A sticking point is the amount. Do some research on the work done and amount requested. Try to negotiate a fair settlement if you find it excessive. After all, having a completed sale, benefited the agent too. There really should have been some verifiable disclosure to you.
0 votes Thank Flag Link Wed Jun 20, 2012
First and Foremost, CONGRATULATIONS!!! on your new home! This really should have been paid by the buyer directly to credit repair co. The Realtor is not a party to the transaction or to the reparations, and shouldn't have paid it to begin with. Having said that, if it hadn't been paid, you'd not have your new home! Certainly from an ethical standpoint, it is the buyers obligation, and you should pay whomever it is that is owed the monies.

Good luck in your new home!
0 votes Thank Flag Link Wed Jun 20, 2012
This is something that should have been paid by the buyer to repair the buyer's credit. There is no reason for the agent to pay to repair the buyer's credit history.
I'm surprised you didn't know there was a fee.
0 votes Thank Flag Link Wed Jun 20, 2012
She says escrow company forgot to include it in closing costs. Escrow company says it was never presented to them and they’ve never heard of including credit repair costs into closing costs anyway. Am I responsible for this bill?
0 votes Thank Flag Link Wed Jun 20, 2012
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