Susan, I am sorry that in my first reply I did not answer your second question clearly but my cover all answer could be contained within the answer I gave before; “nothing is fixed or standard in the world of real estate commissions or fees.” Unfortunately in our region these fees are becoming commonplace and legally allowable; however in other parts of the US, these fees are unheard of or under dispute at this time.
Well, here we are at "Answer #24" and it is still a hot topic.
Debbie form NJ, Please read my first bit of input on this topic (#12 of these 24 pearls of wisdom) and you will see I feel just like you about these “Transaction Fees”, except I have a company that has adopted them and if we just look at as a $295. fee a consumer could think it pricey but if shown to all as a percentage it can be brought into perspective. I am positive I am worth the extra .1475% (all day). You used a few exclamation points when addressing my earlier posts, are you mad at me? It is hard to hear tone in writing, except you used caps too. You mentioned that I am ‘persistent’, and you’re quite right. One my recent clients who loves dogs suggested I may be part Pit Bull, part Golden Retriever, persistent and head strong, yet trustworthy, loyal, obedient, & friendly when appropriate. Actually Susan asked some very dangerous questions for us to answer without properly addressing them and I read it as several questions. However there is a more important thing we as REALTORS should address before getting further involved in the answering of these questions it involves her words “Standard” & “Commission”. As I stated in my first reply to Susan’s questions;“No, to the word "standard", nothing is fixed or standard in the world of real estate commissions or fees. “
Thanks,
Todd Lands, Associate Broker, GRI, CSP, ABR
Cell #: 734. Mi-LANDS (734-645-2637)
When you think of real estate, think of LANDS!

It all depends on listing agent and their terms.

YES I have seen this practice not out of line pays for assistant post in MLS, paperwork and etc.

Seller pays for buyers agent fees.

Agents are all independent business owners keep interviewing till you have an agent you prefer work with.

National Featured Realtor and Consultant, Texas Mortgage Loan Officer, Credit Repair Lecturer
Follow me on Twitter: http://twitter.com/Lynn911
Lynn911

http://www.lynn911.com

Todd - I'll give you this - you're persistant!

Susan simply asked if the addtional fee was standard !

She didn't ask for a sales pitch.......she didn't ask what the percentage is that the fee equals......and she didn't ask for a justification of how or why she will benefit if she selects a company that does charge the fee................she just asked it it is STANDARD.

Susan........as you can see from all the answers you received -- charging an extra fee is not standard......shop around - as you obviously have choices !

Good luck!
Debbie

These extra fees are not necessary. When the market in Ann Arbor started slipping and revenue for real estate companies started to fall Edward Surovell Realtors decided to take the fiscally responsible approach of cutting costs. Over a year ago we consolidated some smaller offices in locations that could be served by other offices. When we did that some people said that we were struggling, but just the opposite was true. By cutting our costs we were able to avoid tacking on extra fees for our buyers and sellers while still offering full service to our clients. Now our Ann Arbor office is the most productive office in Washtenaw County.

As people started moving toward the internet for home searches we cut our print advertising in half and began focusing our advertising efforts online. We created sites like A2openhouses.com, and were the first to display everyone’s open houses, not just ours. We have also increased our advertising on Trulia to offer our listings more exposure.

By being proactive and changing with the market rather than reacting to it, Edward Surovell Realtors has been able to keep costs down and avoid passing on extra fees to consumers, while still offering great service. In fact, by putting our advertising dollars where they are most effective, we have more to offer our clients than ever before, again all without charging our clients a penny more. When you decide to buy or sell real estate, keep in mind who is looking out for you and who is looking out for their bottom line.

Susan some brokers in some areas are charging an additional fee to the transaction. This is a way for the broker to make more money!
Last year at this time in my area we only had one broker charging a 175.00 fee on either side of the transaction. If the seller and buyer both used that broker they would charge 350.00, 175.00 to the buyer and 175.00 to the seller.
This year we have the one broker still charging 175.00 each side, another charging 200.00 to each side, and yet a third that is charging 300.00 total but if they have the buyer they try to push it off as sellers cost hidden in their contract.
It is up to you but you need to determine if that 300.00 is going to stop you from using that agent or are they the best for the money. When I am in compertition with agents from other brokers that charge these fees I sure let the people know how I feel about them. By the way my broker does not charge transaction fees and we are the largest broker in our area.

Hi Susan
I must admit, I never heard about these additional fees before reading about them on Trulia!

No one in my area (we are outside of NYC, in northern NJ) charges such a fee. (watch - now that I said that, I will get an email on Monday notifying us about the new fee we are now charging! ha).

Anyway, I would not be pleased if this fee were enacted.....paying the commission is more than enough, in my opinion, for any seller to pay! I would cross it out like JR did, and start a protest!

Jane, buyers generally pay more fees at closing than sellers. You sound as if you are a seller and a buyer. As I said, I always cross out the fee on our contracts. i don't think it's fair to charge some kind of administration fee on top of the commission. This fee should have been explained to you when you signed the listing agreement, at which point you could have tried to negotiate it away.

Marcia,
I understand that "good brokers spend a lot to market your home" but that's why they charge 6% to list it. Then the title comapny wants to hit me with a fee, and then the government wants some. The $300 is just one more fee for someone reaching in my pocket. And what about people buying? Where's the justification for charging the $300? The agent working with me buying a house isnt doing any marketing. Why should I pay them $300? These little fees add up and I'm not sure I want to do business with someone who is going to jump on the extra fee bandwagon just because they can.

Hi Susan,
Good brokers spend a lot to market your home. They don't just list it and wait for it to sell. I recommend you interview more than one broker to get a sense of which one is most likely to get the job done, at the highest price, and in the shortest amount of time. This should be the one you hire. Brokers don't charge extra fees to annoy you. They need the money to cover their costs. Many have lower commissions to begin with and have chosen to add the fee, rather than raise the commission percentage, which would be a much larger increase. You are dealing with very large dollars in a real estate transaction. Don't hire the wrong broker over a $300 issue and end up losing a lot more than that in the sale price or the time on the market.
Marsha V.

Susan,
Thanks for you note back. I think company longevity could count more than you think, maybe you will call me out of the blue in fifteen years, my phone still works & I can pull your file for the smallest of items, maybe a phone number of a repair person who fixed a rain gutter... Maybe (I know I was reaching).
Thank you, your topic is near to my heart & a real hot one/well worth talking more about.
In the company meeting last year when it was first announced I was the only person in the room of 100+ agents who stood up to speak against this new fee. I really don't want to charge it, it makes me feel cheap, nickel & diming my way through great relationships with clients but I guess it beats raising the commision structure by even 1/2 a percent. If you had a $200,000. house to sell our "Transaction Fee" would be equal to a .1475% fee. Yes, the .15% is like $15 on every $10,000 processed. So, if I negociated a little better I could make my worth all day long for you. I promise I am worth every penny and more of the $295.00. We have never met but I think I like you, so, if I started a company would you come be my first and best client? I am an Associate Broker already, now I just need some more capitol to get it all rolling (maybe I will charge a transaction fee, just kidding).
I don't drink coffee but maybe we should sit down over a bowl of soup sometime and talk more. I have some colorful graphs on 8 1/2" X 11" paper that can speak better than I can about performance. My company out performs all other local competing companies. That is what you want isn't it? A company that performs and an agent with the integrity to go with it right through the closing, be it a sale or a purchase?
Feel free to call me on my cell # at 734.Mi.LANDS (645-2637).
Thanks Again!
Respectfully,
Todd Lands

Wow, thank you everyone for your answers. I appreciate all of the thought that was put into this. I have not signed on with a realtor yet and am still debating whether or not to sell. But Renee and Joann, thanks for letting me know I don’t have to pay those fees locally. After reading these answers I started doing some of my own research. Renee, your blog really got me thinking. Thanks. From what I am reading, not only was there a case where a company was sued over the fee, I think they lost. They will probably appeal. But I think the issue was that they could not explain what the fee was for. A fee with no additional service provided. Todd, looking at your answer I appreciate the thought you put into it and you seem like a nice man. However, you said that if you had your own company you would not charge these fees. Why not start your own company? Saying that I get a company that will be around in a few years does not sound like justification for a fee. I think Prudential has been in Ann Arbor for a long time and Surovell has too. From my point of view, it’s the companies that charge these questionable fees that might get sued and not be around for a long time. Anyways, thanks everyone. If and when I list, it is good to know I have a choice.

Micki from California, I think this odd trend started out west somewhere but since Susan may already have a realtionship with another Realtor I would not ask her to run or even walk away. Here's Susan's answer from me;
No, to the word "standard", nothing is fixed or standard in the world of real estate commisions or fees. Yes Susan, you do get something else, you get a company that may be around to service you years after the sucessful closings.
Many top companies are charging this "extra fee" across the nation, Much to my dismay, mine is included. I did not see mention of the local company that charges $395, but companies are all over the board on the fees & the topic. If I had my own copmany it would not charge this fee, but then again it could be broke & out of business in a year or two. My company has been doing business since 1971 and plans to stick it out. If you have heard of this fee you have probably selected an agent already. This would be the most important thing find yourself a good honest agent. This fee, be it $400, $295, or $150 is small compared to the price of the sale (or purchase), it is not charged until you get through the transaction (which means you are already a winner). I would not put to much on it but it is no doubt concerning to us all (me included). Recently in Southeast Michigan we a quality company fall from the sky like a duck in duck season, but yet no one heard a gun go off. So how could this happen? Ducks don't just fall, or do they? In the past two years we have seen a steep decline in the average sale price of homes in our area. This of course has effected real estate companies operating budgets. We have made steps to be here for you in the future and provide the same top quality service but our operating income has dropped by about 30%. We (my company) will not be one of those strange falling ducks, we need a way to try to stay flying. Last year I sold a house for $10,500. this year I have written offers on numerous houses under $50,000. Before last year I think the lowest house I sold was $98,000. I am not going to appologize to my boss but things sure have changed in the last couple years.
Hire a good Realtor who gives you straight answers (and not a lot of talk about ducks falling from the sky). But don't be too worried, the sky is not falling it is just the ducks.
Good Luck collecting Great answers here on Trulia.
Respectfully,
Todd Lands, Associate Broker with the Charles Reinhart Company Realtors

It's a transaction fee a lot of brokerages started to charge for every transaction.
some agents ask the buyer to cover it, some don't. It does come out of the agents pocket at the end.

hope this helps.

oliver

Wow, when I first saw this I thought it had to be a once in a blue moon type of situation or perhaps it had something to do with doing business in an attorney state...But apparently not.
In California I have never heard of this and I've worked for 2 large brokerages. I would think it would be considered a "junk" fee and I don't know how they would get away with charging it.

Now RUN don't walk, to another brokerage who won't try to pull this.

Micki

Dear Susan,

Thank you for asking. You do have a choice. You should also know that the Brokerages that do charge fees must clearly define to you exactly what extra services they are providing as a result of these fees.

Fees might be standard with some Real-Estate Companies, but at Prudential Snyder & Company, Realtors, we do not believe in them. I recently wrote a blog article about this on Trulia. Please check out Real Estate JUNK FEES. What's the point? -- It speaks for itself. I'd be happy to speak with you further about what enhanced services I provide as a result of my affiliation with a Global Broker with a Local Touch -- Prudential Snyder & Company. Please check out my website at http://ReneeBadall.com.

I think this fee is outrageous. These extra fees have cropped up in the past year or so, as many Brokerages are having trouble remaining profitable. As soon as more home sellers and buyers become aware of it and take their listings elsewhere, the fees will disappear.
My brokerage, Edward Surovell Realtors, never charges an extra fee for buyers or sellers.
I sold 5 homes last week in Ann Arbor and not one of them had an extra fee. I would be happy to speak to you about listing your home, and there would be no fee beyond the agreed upon commission.

It has become pretty standard, although the amounts vary. Our company charges $149, most others charge between $200 - $300. It is pretty controversial, not only among buyers and sellers, but among many realtors as well. I do not personally agree with it, and have the ability to be flexible about it dependent on the circumstances.

Our office calls it a "Compliance Fee" and justifies it because it goes to all the additional regulations, filing, and record keeping requirements now in place by various govenmental and regulatory agencies.

It is relatively new (within the past few years). I would count on having to pay it on the Buy side as well.

Dear Susan,

That is ridiculous. You should not list with someone trying to ad $300 to the comission. In many cases these are fees that their brokerage asks them to charge. Tell them to waive it for you, or else. Also make sure that they don't charge a "processing fee" or any additional fees to the buyer either.

Let me give you another tip: try to negotiate the commission, if they agree to reduce their portion don't list with them. If the agent is willing to negotiate the commission it means that they are not going to invest money marketing their property.

Take a look at my marketing plan to sell a home they should present you with something similar http://sobeluxuryhomes.com/marketing_plan.html

Fees and commissions are negotiable. Discuss them with the agent you are working with and there will be no surprises.

In my firm it is not negotiable. The agent has to pay it if the client isnt charged.
Most Brokerages are not making as much miney as you may think.

First off..there's no such thing as standard commission or fees..they are all negotiable. I've worked in the Ann Arbor market extensively and can tell you no, not all companies or realtors charge such fees. (in fact with 10 guesses I can probably come up with the agent you intereviewed :) )

Frankly..in my listing presentation I let sellers no there's no other "bs fees of any kind and you can cancel any time"...they are nothing more than make us extra money fees.

My firm has a $250 charge on the agreement, but I cross it off. The company seems OK with that, so I don't know what the purpose is. Well I do know what the purpose is, I don't know what the point is, they're already making thousands of dollars. If I had to charge it I would probably give it to my seller as a closing gift, I don't think it's fair.

Some agencies (most of the larger ones) are now charging a "paperwork fee", to create and maintain your file. Not all agencies, and not all agents are charging this fee, therefore you should treat it as negotiable.