TO FEE OR NOT TO FEE- SHOULD REAL ESTATE BROKERAGES PAD THEIR COMMISSIONS?

TO FEE OR NOT TO FEE- SHOULD REAL ESTATE BROKERAGES PAD THEIR COMMISSIONS? THAT IS THE QUESTION. Real Estate business models vary widely. Some large nationwide franchises do in fact add additional fees which are passed along onto customers.

They go by different names such as "Legal Compliance fee" or "Administrative Fee" or "Transaction Fee" but in almost all cases provide no real benefit to consumers.

They do however add additional cost. Depending on the individual franchise, the fee can range from $225.00-$295.00 per transaction.

OUCH!

It is not illegal- but, do consumers really understand what they are contracting for?

In most cases the answer is "No".

A disclosure is generally provided to the party hiring a brokerage which charges additional fees; outlining the cost of the fee the additional fees and presumably what services are provided.

However, bouncing a denied fee to the other party in the transaction because "someone has to pay for it" without benefit of the disclosure or their consent is not permitted.

It is important to note that NOT all Real Estate Brokerages charge additional fees over and above the commission or compensation.

Read the fine print. Ask questions- and understand exactly what the fee is for.

And what about Case Managers who are working short sale files? These fees are often denied when the file is reviewed. In most cases; the added fee amounts to additional compensation with any benefit directly to the consumer. They do however pay for ancillary services within the infrastructure of the larger corporations.

Fee or no Fee that is the question- what do consumer really want? Should agencies that charge additional fees be required to publicize a printed disclosures similar to that MARS mandated disclosure in all their advertising, print ads, MLS listings, etc etc etc?