Did you know that some brokerages charge their clients hidden fees? I suppose that “hidden” may not be entirely fair since they are disclosed in the fine print of the listing paperwork, but none the less, they are not easily discernible within the listing contract as additional commission.
Sometimes called an Administrative Processing Fee or Document Storage Fee, these fees are said to be necessary to offset the cost of storing your transaction documents or for the brokerage to process the transaction. The fees are typically flat fees and are in the range of $250 – $300 and can be charged to both buyer and seller.
The origin of these fees first occurred during the downturn in the real estate market when home prices were falling, and brokerage profit was tumbling. The fee was introduced as a way to prop up the bottom line for the brokerages. Initially, they were not regulated as commission in Ohio and so most times they weren’t disclosed up front and would just show up on the settlement statement and hold the transaction hostage. Since then, the law has changed and it is now regulated as commission, so the fee must be disclosed up front. It’s important to note that most of the time the fee goes to the brokerage and the agent doesn’t get any part of it.
Is it fair? That’s a difficult question to answer. After all, brokerages are free to charge whatever commission that their clients will agree to pay. The key is that the brokerages are required to disclose it up front. The disclosure is not always obvious though, so when you are considering hiring a real estate agent, you should simply ask them if their brokerage charges that fee. At least that way you’ll know either way.
At my brokerage, Keller Williams Consultants Realty, we believe in full transparency and do not charge an administrative fee of any kind to our clients. We view the handling of your paperwork to be part of our job and since I’m required by law to keep your documents for 3 years, it’s really just a cost of doing business.
If you are even thinking of buying, selling, or investing in real estate, CALL US, we can help!
…Helping YOU Is What We’re Here To Do!