Many Realtors are penalized if their client does not agree to pay the transaction fee, and end up paying for it out of their pockets (or risk facing disciplinary action by their Broker.)
In today's market, many real estate transactions are "Short Sales." Banks typically will NOT pay a transaction fee, for they understand that this fee is an "extra" fee being charged by the Broker in addition to the commission. As a short sale listing agent, our sellers are experiencing financial hardship, yet many Brokers still think it is reasonable to charge the document fee to a seller...(who is losing their home)
While many Real Estate Brokers are hurting in today's distressed housing market, we would NEVER charge a document fee or a transaction fee to a seller in distress. When a client is losing their home, they need help...not junk fees.
If it is acceptable for a Broker to pass along a business expense to a client, such as a transaction fee, then where exactly does this begin and end?
There are certian expenses which a Broker must pay...if they want to be a Broker. If a client is asked to pay for document storage (which Brokers must do per state law) should Brokers also be allowed to charge fees which cover other business expenses such as:
- Copy machine fees
- Telephone Expense
- Fees to pay the admin staff, phone receptionist, etc.
- Fees to pay for the soap and toilet paper in the Brokers restrooms...
A seller is already paying a 6% commission. If this does not cover the expenses of the Broker, then it is recommended that the Broker either a) cut costs, or b) get more clients
Please agents, read your posts before confirming. No need to attack, blame, condemn, criticize. Just answer the question asked by the consumer. That is all they are asking from us - provide them information.
Patricia Jewett - Realtor
Chase International Real Estate
It has nothing to do with being a moderator or not being one, or removing what I want removed...it is simply using common sense and providing our clients THE BEST CUSTOMER SERVICE. Not being greedy. Greed is a terrible thing.. I only have one job, one career and this is it...Love what I do and treat everyone they way I would like to be treated...with respect, honor and not being taken advantage of.
I was once that person who was not a realtor looking for my first home, and guess what? I got so screwed by my agent, and NEVER again, will I allow anyone do that nor will it ever happen to me. Because I decided to go into that field to learn for myself. I see you live in Vegas...so good luck to you.
Wether your company charges you that or not, as a professional no Realtor should charge the client that..PERIOD!!! Unprofessional and it's very tacky!! We get paid well and we should swallow few hundred dollars when is necessary to earn that clients trust and relationship.
Liane Jamason, Realtor
Keller Williams Realty
Yes people think most Realtors are shady and crooks. Face it, it's the truth. ANd people can't handle the truth. I can and I have accepted that. So should all you Realtors. Wether you are one or not. Accept it and deal with it. But make that client feel good and give them ALL the answers they need to know. TELL THE TRUTH. SPEAK THE TRUTH. Why do people get so defensive when you speak the truth? Get over it and let's help this Home buyer feel warm and welcomed.
Let's please stay on topic and not act like school kids.
You are for franchise fee that take a greater portion of an agents commission (not considering the poor commission splits) but yet argue for a flat fee for 375 dollars, what an oxymoron.
Your argument is too broad and does not apply in Las Vegas. Our agents are getting their butts kicked everyday and working in the toughest market in the nation so $375 is justified.
I would "FIRE" a client that makes an issue over the fee and everyone else should do the same.
Real estate is so much becoming its step brother, the car business. The field needs to go the route of the attorneys and doctors immediately in my opinion.
Have you ever questioned the hourly rate of your attorney?
Real estate agents work under different compensation plans, therefore, fees vary depending on the brokerage they associate with etc.
For example, I work under the #1 real estate broker in Nevada that employs over 1500 agents and offers 100% compensation plan to seasoned and experience, a 100% compensation plans covers all upfront expenses our agents incur during and sometimes after your transaction closes. Other agencies pay their less experience agents (low production etc.) on a lower tier (60% of gross commission etc.) plush franchise fees, marketing fees and copy fees.
Every agent places a value to his or her work based on many factors so keep in mind that the bulk of the commission of not al comes from the seller side (seller paid closing cost etc.) which sometimes covers the transaction fee you pay.
From a micro economic view, you are paying a transaction fee while in most cases the seller is paying your closing cost (5000 vs 395).
Pay your agent what he is worth and if he is not worth it find someone else that warrants the nominal fee.
I charge our company transaction fee to the buyer 99% of times, the 1% is VA. Why? Because it takes a professional to undestand self worth and the value he or she offers to a transaction, hence, justifying a charge that would be otherwise be taken out of his earned commission.
My take on the subject differs from fellow agents on this thread but I just don't run a discount business.
Advise: if a fee is bothering you at this time, please consider interviewing other agents to find an agent where you feel you will get every penny out of the transaction fee etc.
All the best!
If a REALTOR from one market does not participate or understand a particular policy or situation in another market, why must it be wrong or bad business or some other phrase. Just accept it as being different. If your curious just ask a question, without being rude or offensive.
If you choose to pay a transaction fee yourself then that is fine, there are plenty of other fees and cost that we have to pay for on our own. It is how you choose to run your business.
I am sure if we delve into each policy or practice of each agent and market, I am sure we can find alot of differences to debate. Lockboxes vs both agents having to be at a showing, title companies vs lawyers, licensee's who are able to write contracts vs those who cant ... it goes on and on ...
Wouldn't it be better to work together and learn from one another? None of us are experts.
If you are not happy with the service, you can always fire an agent and look for an agent that will look after your best interests. I know a lot of agents will not pass that transaction fee to their client. That's nuts. We don't have a transaction fee and if we did, I wouldn't pass it to my clients.
Jes Sierra, B.Sc.
Century 21 Beachside
Chino Hills, CA
You have received many good answers from many different agents, however, it comes down to this:
The transaction fee is not required and is 100% negotiable. It is probably NOT being charged to you by your Realtor...but their Broker instead. I would ask your Realtor to see if the Broker is willing to waive this fee. If the answer is no, then there are many Brokers out there who would LOVE to have your business in this distressed housing market.
Make an appointment with the real estate office branch manager and tell them that you are a qualified buyer who is ready to purchase a home in Summerlin. Additionally, let the manager know that you are willing to use their services contingent upon the Broker waiving the transaction/document fee. If the answer is no, then there are MANY reputable companies and agents in Las Vegas who will line up to help you.
Don't be "bamboozeled" by a smooth talking branch manager, who tries to explain the benefit of a transaction fee. There is zero benefit for you.
I disagree with David here. Some of the largest and best brokerages do NOT charge a transaction fee. And I also disagree with the comment that it's "not very high-under $500." To most buyers and sellers that seems like a lot, especially if there truly is nothing that the broker is doing to earn that. Seriously, does the broker really do anything or does the agent do all of the work?
Why am I responding, you may ask ... becuase this behavior is exactly why the consumers do not trust us or respect us ...
Clearly you have hit a nerve with some. Once again, you have to make a decision regarding a fee that an overwhelming majority of agents in the Las Vegas marketplace charge. Few don't charge it so you could spend the necessary time to find an experienced agent that doesn't charge it, just make sure it doesn't cost you more than $300 worth of your time or you have lost the value you sought.
As for Joan's example of a 50/50 split below with her broker in NJ. I personally have never seen a 50/50 split in las vegas. I would guarantee you that if an agent, in Las Vegas, agreed to do a split of 50/50 with their broker the broker would GLADLY waive the agents transaction fee and pay it themselves. However, i seriously doubt the agent could stay in business much less actually make a living in our current marketplace in Las Vegas. Hence that example of that agent not charging a transaction fee is not valid for our marketplace in Las Vegas.
Again you will find a few that do not charge the fee, just make sure you thoroughly interview the agent before you decide who your going to work with. I see a lot of contracts that come across my desk on my bank owned listings. I can't tell you how many inexperienced agents LOST the contract just simply because they didn't even know how to fill out the contract correctly or clearly. Hence, their client is the one that is harmed do to their agents lack of expertise.
It is not my job to train an agent on how to make their contract clear, if i have to second guess their offer than escrow is going to have a problem which puts me and my seller in a risky position that could end up in litigation. I of course am responsible for protecting my clients, so I would be reluctant to accept an incorrectly filled out offer without having the agent correct the mistakes. The only time that i feel it is worth my time to educated the buyer's agent is when i think their offer is better than the correctly filled out offers...then it is in the best interest of MY client that i do that.
Of course, i have seen poorly written offers from agents that charge transaction fees and that don't so my point is: do your due diligence now! Ask the questions that concern you so that you can make an informed decision. The fee that has been so hotly debated is just a small amount compared to the purchase so I would highly suggest that you focus on finding a qualified agent that you feel good about. If things go terribly wrong in the transaction, you want to know that your agent can keep it together if possible and if not that they can get you the full refund of your EMD without a court battle. Good negotiations skills, people skills, accurate and detailed communications, finesse, & experienceâ€¦ are all critical skill sets you should be looking for when selecting an agent. Can the job get done without all thatâ€¦ yes- But you should be prepared to deal with turbulence in your search.
Best of Luck. If you have any more questions you should know by now that you WILL get answers via Trulia.
Valerie Edwards, REALTOR
ABR, RRG, SRS, SFR, SRES, RSPS, GREEN, ATHOM
Premier Real Estate
I pay a 50/50 split with my broker. No franchise fees. No desk fees. My broker eats the monthly cost for each agent which amounts to less than $200/month.
I do pay RE/MAX but that is just a few hundred a year for our website and some tremendous resources which are the best I've seen. Great value for the money.
I know your market has suffered, perhaps more than most areas but my point is that buyers do not get more value for having to pay a transaction fee than if they don't. The value add is purely to the brokerage.
I typically waive the fee for the seller, if the home is over $200,000, since they are paying for the bulk of the transaction via the commission. You should know that on a typical transaction at the cost of $100K, the commission is normally $3000. but can, and is often lower with the bank owned properties and the sort sale properties. Sometimes it is as low as $2K. Most all agents have a split between them and their broker of anywhere between 60/40 and 80/20. Hence if you have a 60/40, the agents split would be $1800 MINUS the transaction fee. If their transaction fee is $300 than the agent would net only $1500 on a transaction they could have spent months on. Of course this net doesn't include the cost of being a realtor such as MLS fees, Realtor fees, Supra Key fees, license fee, gas & higher auto insurance fees.... Needless to say it is expensive to be a realtor.
Of course you could say that when the prices were high, agents were making some really good commissions. However, before the market exploded between 2002 & 2005, and after the bubble busted, the cost of homes have been relatively low. An agent would need to have an average of 30 transactions to just make approximately $40K and that doesn't account for the cost of doing business and income taxes. It is safe to assume that most agents do not do 30 transactions per year in Las Vegas. In fact if i remember correctly, the average agent only makes $24K year right now. Hence, you add up $300 x just 12 transactions a year that is $3600. It may not seem like a lot but when you consider $24K income to an agent, $3600 is approximately 15% of their income and every penny counts in the end.
I know that you as a buyer never wants to pay anymore than necessary in your purchase, but you should understand why most agents do charge it. It is not a fee that the agent just pulls out their hat just because they feel like it. It is a brokerage fee that is set for them from the broker, regardless of the purchase amount of the home they sold.
My office fee is $300 because that is a hard cost to me with every transaction. Again, i typically will waive it for the seller with a sale price over $200k. And since a lot of homes right now are below that price, i do charge it more often than not. Add in the fact that i personally am dealing with a lot of investors who are purchasing cash in North Las Vegas....Iâ€™m just thankful when the transaction is actually over $80K at times. Hence keep in mind YOUR individual purchase, if you are purchasing a $50K condo and it is a reduced commission to the agent, $300 may just be the thing that allows the agent to break even on your transaction. However, if you are purchasing a $300K or higher home, you may want to have a discussion with the agent about waiving the fee. Of course if you like the agent and feel as though they are the expert you want, you may find that the transaction fee is not so high after all. The important thing is that you KNOW what that fee is BEFORE you write an offer.
In the end, you have to know that what you are paying for is worth it. If you don't think the agent has the expertise you want and need than you should move on regardless of the transaction fee. I know that a lot of new agents don't charge it in hopes to get clients, however you also get a new agent that has very little experience. Often times, the lack of experience alone can cost you more than $300 in the transaction and at minimum, frustration and confusion throughout the transaction.
Also keep in mind, it is rarely wise to assume that advice provided by agents from outside the local market area is the best advice. There are vast differences from marketplace to marketplace in the nation. The east coast does things VERY different than we in Las Vegas. Clients from out of state are constantly surprised (pleasantly) to how different things are done here in Vegas. Clients alwasy make the final decisions in the transaction, but it is recommended that you make a fully informed decison. Hopefully this will help you to do just that.
ABR, RRG, GREEN, SRES, SRS, RSPS,SFR,ATHOM
Direct: (702) 371-5533
Premier Real Estate
I do a 50/50 split with my broker. I pay no desk fees, no fees for office materials, etc. If my production increases, the split will change in my favor. If business improves for me, I will do just fine even with the 50/50 split. If I don't, then it is my choice to either stay in the business or seek employment elsewhere. If my brokerage, which is a RE/MAX but tiny by your standards, couldn't turn a profit without charging an extra fee to buyers, then my brokerage doesn't belong in this business.
I think the reason it irks me so much is because it reminds me of all the other nefarious fees in my life: credit card, phone bill, bank fees that when questioned, often end up suddenly not being all that important to the various companies that charge them except for the wonderful profit these often unquestioned fees generate.
Agents work very hard for their money and only get paid if and when the deal actually closes. They may spend several months with a buyer, show multiple properties, spend hours writing and negotiating multiple offers which may or may not be accepted and/or close. In order to cover their costs which they have to front (licensing, education, marketing, internet, phone time, computer time, etc.), they are passing some of the cost onto their clients by charging the transaction fee which takes an additional bite out the of the agents commission on to their client.
Discuss this with your agent.
I have never charged a doc fee in this company and if I have my way never will. It is always negotiable.
D and R Realty
According to the U.S. Supreme Court these “unearned” fees charged by lenders and other service providers do not violate federal law as long as they are not split with anyone else.
If a brokerage is going to charge these fees, they should be disclosed up front to the customers, not at closing. Typically if a customer refuses to pay the fee it will be deducted by the broker from the agent's check.
My previous broker instituted a transaction fee several years ago. Most customers would go ahead and pay the fee but none were happy about it. I personally never liked the fee. Eventually I moved to a brokerage that does not charge transaction fees to it's buyers and sellers.
To me, putting lipstick on a pig is an applicable term for these transaction fees. No matter what shade of lipstick you apply, in the end, it's still a pig.
Being a Broker in several states I can say that transaction fees vary from market to market as well as brokerage to brokerage.
Transaction fees are negotiable (some brokerages may say it is policy and refuse to remove it but that is just a brokerage's policy).
Transaction fees vary in cost from zero to whatever the market yields.
Transaction fees are legal.
Licensed Real Estate Broker NV#62827 MA#9530304 RI#18138
NV Broker & Team Leader of The Adams Team at Rothwell Gornt Companies
MA & RI Broker at Sankey Real Estate
Is this a bank foreclosure?
I'm starting to see a creeping in of buyer fees (including transaction fee, processing fee, etc) being charged on these, perhaps as a way to make back referral fees the listing agents have to pay to the REO companies?
You can ask your agent what it's for; if you're working with the listing agent, ask the listing agent.
You can always ask for it to be waived; it might or it might not work.
In some states, fees on top of commission amounts are illegal; in others, they are legal as long as they are disclosed to the parties, and in others, they are treated as completely different from commission and permissable.
If you're looking to pursue it further, you might be able to check with your state licensing board to determine if they allow transaction fees in NC. Best wishes with your new home purchase!
However, this is paid by me out of my commission check. This must be different state to state.
I'm assuming the Realtor can pass this fee onto to you in Nevada? If they are doing an exceptional job, it might just be the cost of selling your home these days. It seems like everything costs more...
I'd like to hear from more Nevada Agents to learn more about this fee and what the common practice is on how they deal this extra expense.
A transaction fee = fee associated with a transaction.
Either the full cost is passed on to you or partial.
Surely not all Realtors will pass this along to you.
The question is if an Agent who is passing this onto you is doing a great job, getting you the right property at the right price why would you not pay it.
Maybe you should do a cost benefit analysis.
It is common in our state. It is accepted in this state . In every state there are different ways of doing this buisiness. How come NY is not shady because they have to hire attorneys to close and those fees are higher than NV without usin Attorneys.
Who do you think you're being honest with Nazilla and just exactly what do you think you're being honest about?
Are you the smartest and best Realtor in the world and you know the "truth" about everything ? I guess everyones answers that dont agree with you're answers should be dismissed and we should all be referred to as shady. Maybe the moderator doesn't see anything wrong with that but I assure you there is a lot wrong with that. If the board of Realtors would consider putting other Realtors down as unethical , I bet they would consider this to right along with it. Have this one removed too.
A Transaction fee is typically a Brokerage fee charged by Real Estate Brokerages and some Mortgage Brokers/Banks. The Real Estate Brokerage Transaction fee is charged by almost all Real Estate Brokerages in Nevada and can vary from as low as $150 to more than $500. The Real Estate Brokerages typically apply this fee as additional income and some will state that it goes towards covering the storage of Transaction documents or even towards Errors and Omissions insurance or towards a host of other expenses. In some cases, the Agents will pay this fee for their clients but that is extremely rare.
PR Properties Group