ASK YOUR AGENT ABOUT A REAL ESTATE PROCESSING FEE

ASK YOUR AGENT ABOUT A REAL ESTATE PROCESSING FEE before you engage the agent to act as your representative in a sale. 

From time to time I run into a real estate agent who asks for the buyer to pay a real estate processing fee at closing. This creates a couple of problems.

 

One problem is that I find most of the time the buyer has no idea they have to pay a fee. Now I've been around long enough to know there is a lot of info that changes hands in the home buying process and folks often don't remember everything. 

 

Another problem is that we can't just slap a fee on the settlement sheet at closing that was not quoted in our figures up front. Since the new TRID guidelines we have to be very specific about fees and not every brokerage charges a fee.

 

Since I don't see this as a fee charged by all brokerages in Kentucky, buyers should ask about it before they engage a real estate agent to assist them. It is a closing cost no matter how you look at it.  What buyer doesn't want to save $295 in closing fees? 

From another point of view, I've been in the housing/lending industry for over 20 years and I remember when the homes selling for  $150K today sold for $75K. The logical question is that the 3% commission for selling the home was adequate when it sold for $75K, so why not at $150K. 

As a buyer searches for the agent to represent them, they should also ask about the real estate processing fee, and how that can be paid outside of closing if they choose an agent who has the processing fee.

 

Comment balloon 4 commentsDora Griffin • May 09 2016 02:53PM

Comments

we do not have such fees here in Alberta Canada, but I can imagine that it wont be long and we will see something similar.

Posted by Robert May, Real estate consulting (Robert W May - Lethbridge Real Estate) over 2 years ago

   Hi, Dora.   You have a great last name!

     I  will be careful discussing fees on a real estate industry blog site like ActiveRain.  I don't want any perception of anti-trust or collusion.

    But I can say that I have met many Buyers who were upset that they were charged a "closing fee" or "transaction fee".   Sure, they signed and agreed to it, but it was buried in the fine print and not pointed out to them.

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) over 2 years ago

Fred,  as do you (last name).

From a lending point of view I can't add a fee to the fees the borrower is being charged already, so it always gets sticky with agents at closing. If there is an agreement to pay a transaction fee it should be collected before closing day since it is an agreement between buyer and his/her agent. Not every brokerage in my market charges the fee.

Posted by Dora Griffin, NMLS 6380 (D A Griffin Financial.LLC) over 2 years ago

Robert, thanks for the reply. Not all the brokerages have the fee in our market. You would think all the big ones would, or all the small ones, something like that, but it is hit or miss. I had an agent tell me recently "all real estate companies are charging the fee".  That seems to be the justification for it. On the lending side we cannot charge anything that is not a bonafide fee, a charge for a service delivered. 

Posted by Dora Griffin, NMLS 6380 (D A Griffin Financial.LLC) over 2 years ago

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