It is a revenue augmentation strategy implemented by some brokers. To increase revenue a broker can:
1. Raise the monthly fees on each agent (some already near $1,000 monthly)
2. Increase their share of the split (some are as high at 50%)
3. Add fees to office services such as answering your phone
4. Impose referral fees on agents for calls coming into the office from office advertisements. (25%)
5 Raise desk fees ($100 mo)
6. Impose monthly 'coffee fund' charges.(loved by those agents who work from home)
Brokers have more ways to raise income than Spirit Airlines.
Many of these choices, however, make the brokerage less competitive with others in the area.
OR....the broker can
Create a fee that the agent can pass on to the consumer. It is the broker's way of saying to the agent, "I didn't raise your taxes."
The real estate agent must choose, pay the fee directly to the broker or pass the fee to the buyer or seller. With agents incomes dropping more than 60% in the past 4 years, no reductions in fees, each transaction requiring 3 or 4 times the effort of previous years, it is easy to realize the agent is no longer able to cover this expense.
Do the math. If I sell a $35,000 retirement condominium with a co-operating agent, my income will barely cover this fee! It becomes an increasingly difficult situation for low end properties to get sold. No one wants to work harder and lose money. In some locations and instances, there are fees the consumer doesn't see that agents levy against each other, perhaps to rake back fees they are compelled to pay.
Based on each situation, I must determine to whom I will or will not pass the fees forward. Do any agents like this situation. NO. Unfortunately, changing brokers can cost more than $10,000! That's a lot of broker fees.
It's an exciting time to be in real estate.
By the way, congratulations on finding a new home.
Doing the right thing is the best way to get on with your life in your new home.