Nervous- You said this agent just filled out the paperwork? So you only saw the one house? How much conversation occurred while you were in the house? I assume you didn't meet at the office first? I try to meet all my customers at my office first. This is when we have a conversation about the buyer's needs and options, and it's when an additional fee would have been disclosed (if I charged one, which I do not). Just wondering how much time was spent with the agent before the contract was written.

My realtor sent me a copy of a Fee Waiver form that I guess she submits to her manager and tells me the fee will be waived. She did further tell me that although the lender in this short sale has agreed to pay a 6% commission the listing realtor is only paying 2.5% to the buyers agent. I personally feel that is sufficient for filling out paperwork on my behalf. However a bigger reason I am opposed to paying this fee is I never even knew this agency had intentions of charging a "Transaction Fee" until after I had made the offer, it had been accepted by both the seller and his lender. To me it would be the same as me saying oh by the way now that I've brought this commission to your door step I need you to sign an agreement that as a thank you to me you will provide me a home warranty. Business doesn't operate that way. The realor should have told me upfront that I would be happy to make an offer for you but our agency does charge $195.00 Transaction Fee to buyers. I would have moved on as there are to many good realtors who would have never requested that. In at least 8 transactions I have been involved in selling or buying I have never been ask for such a fee. I would have been just as happy to make my offer directly to the listing agent. My thought was I really didn't care who shared in the commission but this realtor was very professional in answering questions I had on one of her listings. Again I have to state I am happy with the realtor just not the practice of the agency.

In light of your last comment, I have to say that I find it highly unprofessional for this agent to be attempting to charge this fee to you. I've never heard of an "archive fee" before. And if they're being paid the commission amount that you stated, I find it even more ridiculous. However, I'm going to reference part of Skip's comment again, because I was thinking it yesterday. I just decided my comment was already long enough, and didn't go there ;-)

If/when you decide to use a different agent to purchase this property, bear in mind, the agent you've been working with IS the "procuring cause", meaning, they've done the work so far, and brought you all the way past the point of writing the contract, so they're entitled to the commission. According to the laws of procuring cause, a client can choose to work with another agent, but they don't get to decide which agent gets the commission. Of course, as long as you get the house you want, with as little stress as possible, then that part of the process should not effect you. At this point I would have done the same thing you did: refused to pay that fee!

I'm sorry you've had a bad experience. But I'm glad you posted the question here. It's beneficial to all of us when we share information. Going public with your situation will hopefully discourage any other unprofessional or unethical behavior. It's a benefit to the real estate industry when the few bad eggs are no longer able to mar our profession. I may actually blog about your story and the responses you got, sometime in the next few days. You've brought to the table, an excellent example of how NOT to do business. And I know that the vast majority of Realtors will agree.

Good luck! And please keep us posted. I think we're all going to want to know how this turns out.

Get a new Realtor. Sit down and talk to him/her and never be afraid to ask questions.

Transaction fees have been found to be a violation of RESPA in some courts here is a link to the verdict on the latest popular case.
http://www.morelaw.com/verdicts/case.asp?n=04-02799%20CV-3-V…

The Buyers Agent should have informed you about this fee prior to or atleast upon writing the offer to purchase the property. Waiting until the offer was accepted and then asking you to sign the form does not sound like a good way to continue to do business as a Realtor. If, for some reason, the Agent actually forgot to inform you of this small detail, they should just eat it to save the deal.
If they refuse to forgo the fee and require you to pay it AND you decide to find another Realtor to assist you with THAT particular property keep the term procuring cause in mind. Your former Realtor can sue the new Realtor for his commission once the sale closes because he/she was the original procuring cause for the sale.

I am happy that so many realtors and brokers agreed with me that this "transaction fee" is not very professional. I am told it's for "archiving". Keep in my mind that I was asked to sign agreement to this only after my offer had been made and accepted and a closing date set. I have responded to my agent that I do not agree to this and if they wish to withdrawal their involvement then I'm sure I can find another realtor or the listing agent himself who will be willing to see this through without such a fee. I find it hard to believe a broker would risk a 3% commission on a over $200,000 real estate deal for a cheesy $195.00 "transaction fee". Worth mentioning that even as this is a short sale the lender has agreed to the full 6% commission being paid from the total. The agents broker is just being greedy in my opinion. I'm waiting for the agents response to my refusal to sign or pay this after the fact fee!

There is one particular national real estate brokerage chain that does this on every transaction. Due to the Code of Ethics, I can't say who it is. Aside from that, there are a couple of scenarios that come to mind, regarding why this fee could be charged. But first, I'll answer your other questions you posted below. (Bear in mind this is all speculation.) 1) Yes this is allowed since any money paid is considered commission money, and commissions are always negotiable. But maybe this agent felt the commission listed in the MLS was not enough. (I've expanded on this further down) And it's not always the seller who pays the commission. It's become increasingly common for buyers to pay it, or contribute to it. 2) Yes it's ethical because all commissions MUST be negotiable. Different brokerages are not even allowed to discuss their "normal" or "standard" commission with each other, lest anyone think they're conspiring to "price fix", by setting a minimum standard in their area. To forbid a particular fee would be venturing into the arena of the brokerages who charge a flat fee instead of a percentage, and/or the ones who offer a la carte services. "Price fixing" is against the law, and industry professionals will steer clear of conversations that venture anywhere close to this law. 3) Whether or not it's good business is open to interpretation, depending on the reason(s) for it. So here are some possibilities...

In some brokerages, they have a Transaction Coordinator, who keeps track of every detail of every transaction. There are also some individual agents who hire their own Transaction Coordinator, then charge a fee to their clients, to help offset the salary they pay this person. Now you're probably wondering why this additional person is needed. In a brokerage, the brokers and managers cannot know everything their agents are doing in the field. A Transaction Coordinator helps them maintain a measure of quality control by making sure everything happening is legal, ethical, and beneficial to the client. Some clients may actually appreciate this service, and the fee attached to it. Now if individual agents are charging this fee, it could be because they handle such a large volume of business, that they've hired someone to make sure nothing falls between the cracks. IE mortgage application, mortgage approval, inspections, surveys, appraisals, repairs, and the specific due date for each clause of the contract.

If the fee is not for a Transaction Coordinator or individual assistant, there are still a couple of other reasons you could be seeing this fee. As Skip noted, when purchasing foreclosure properties, banks ALWAYS charge additional fees. Banks also pay a lower commission, while at the same time causing the agent to do more work. So, to be fair to all their clients while more time than usual is being dedicated to one particular transaction, they may be passing the extra bank fees through to you. But the amount you've stated is lower than what I've seen banks charge.

Lastly, the only other reason I can think of at the moment is if the selling agent is not happy with the commission being offered by the listing agent. If they feel that after their taxes, business supplies, gas mileage, vehicle wear and tear, Board dues, MLS dues, time spent with this particular client, and profit that is leftover, that they've just worked for below what they feel their services, experience, and knowledge are worth, then they may feel the need to ask for the remainder of what they're accustomed to making, or feel they're worth, from you. Yes, commissions are negotiable, but individual agents may choose an amount they they keep in mind, that they feel their services are worth.

In case you're wondering, I do not charge these fees. I'm simply speculating the possible reasons for it, since you asked. I'm curious as to what your agent told you the fee was for. ??

To answer your second question...is it good business? I say no. I worked w/ a broker who gave realtors the option of adding this fee. I chose not to. The fee goes into the realtor's pocket..on top of the commission. Again, you need a new realtor.

Sometimes the Broker insists that their Realtors impose this fee. In other cases, there may be fees associated with the purchase of the particular property being purchased. I have seen where the listing agent imposes fees to the Buyers Agent for the purchase of a foreclosure property. This agent may be passing on the fee to you the Buyer. Like the other Realtors, I am not a proponent of this method of doing business but, I have seen those types of fees creep in on some transactions. Kind of like a dealer prep fee or destination fee when you buy a car from the dealer etc...what ever they want to call it, you are doing business with them and they are essentially charging you a fee on top of what you are paying for the product or service that you are purchasing.
Good luck.

I think you need to find another real estate agent!

A transaction fee can be charged at the discretion of the realtor. I would find one that does not do this. Your realtor should be happy w/ the commission he/she is earning w/o the addition of a transaction fee.

I must say I find it a bit offensive having bought and sold since early 90's and never had such a request of me before. Is it even allowed by real estate board? Is it ethical? Or better yet is it really good business?