Good day Cindi,
In Nevada, a Broker fee is typical. This is a fee that the is the profit for working with an agent in the company. Consider it the cost of acquisition of the property. As a rental property, the fee is deductible to you and may lower your tax liability.
By NV state law, the documentation for your transaction must be kept for at least 5 years. I am sure it is similar in all states. The storage portion of the fee pays for the cost of the storage and retrieval. We call it a storage and documentation fee. Due to RESPA regulations, if a Broker charges the fee, it has to be collected on every transaction. Sometimes the Client will pay, sometimes the Agent will pay, it will be paid by someone.
Did you complain about the costs that your lender charges and tell them you will not pay them?
Do you complain about the shop fee or recycle fee to have your car repaired?
Do you complain about the table fee when you visit a restaurant?
Do you complain about the fee to visit your doctor?
I hope you get the point by now?
These fees are to help keep us in business. We have costs just like everyone. The people that use our services, pay the costs to keep us in business.
As a simple exercise, add up the total number of hours that the Agent has been involved in working with you. Include travel time, research time, document signing time, after closing time completing the documents and getting keys. Look to see how many dollars they received. Divide the $$/hours to get the hourly wage.
Please report back and let us know what the you paid the hourly wage of the Agent you worked with. Compare that wage with what it takes to get your car repaired ($125/hour) see a doctor ($175 for 1/4 of an hour), call a repairman to fix your plumbing ($90/hour), talk to your attorney ($250/hour) , or any other professional assistance.
Don't look at it as just another expense. The Broker/Agent you are working with did their job in locating you a property meeting your needs. The Broker/Agent was also instrumental in getting the offer accepted. Your Agent will also go with you when you go to closing to review the documents before you sign them to be sure they are correct.
I have spotted incorrect addresses, parcel numbers, sale price incorrect, spelling of names, and lots more issues in documents that I review for my Client. I go to every signing with my clients. You should expect your Agent to do the same.
The Broker/Agent deserves to be paid by you and not stiffed out of the Broker fee.
If a Broker is paying to train, providing insurance, providing an office, fax, computers, office staff, etc., to the Agent, the Broker has to make a profit. This is the same as a delivery fee or dealership fee, or prep fee, when purchasing a new auto. A portion of the Broker fee will be disclosed as the profit portion.
A Broker fee should be disclosed at the time of meeting. This is a cost of doing business with the Broker. The consumer (Buyer/Seller) should be provided the choice weather the cost to do business with the broker is warranted.
A Broker fee is not allowed on some transactions such as when the Buyer is getting a VA loan. Someone else pays it and not the Buyer.
Typically, there is a disclosure signed when the contract is is signed outlining the fee. If the Agent forgot, then you did not sign it, and you are not responsible for the fee. If you signed the disclosure, then shame on you for not reading it. Pay the fee.
I agree with the past comments. If the Agent forgot to mention it, I suggest you forget to pay it at closing. End of story.
Have a great weekend. I wish you well in being a landlord like myself.
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