I got the call again today
It's the same call I get all the time. Over and over and over again. And for me it's the same answer each time. Over and over and over again. This afternoon the phone rang and it was Samantha who is the Title Manager for a law firm that is handling the closing of a real estate transaction one of our clients is a party to.
Does your firm have a processing fee that needs to be collected on the HUD was her question. To which my response was, "Here at Paradise Sharks Real Estate we never charge our clients a processing fee as we do not believe in them and always enjoy watching other agents explain just what the purpose of the fee is". Samantha laughed and chimed in "yeah some brokerage firms charge a fee that is quite high". No doubt, as a couple weeks ago I sat across the table from an agent representing the other side of the transaction and there on page 2 of the HUD1 closing statement it was, Processing Fee $695. Are you kidding me $695? I get used to seeing them for $295, $395, $495 but now $695? Was the 3% commission the brokerage receiving not enough compensation? Did they really need to tack on another $695 to their clients cost of doing business with them?
It was about 20 year ago that this fee crept it's way into real estate world here in the State of Florida. Some will explain the fee as required to offset the cost to the brokerage for additional paperwork and document storage required in connection with government regulations. At one brokerage I once worked the agent kept the fee, not the brokerage, so any explanation was really a smoke screen to cover the fact that it really is nothing more than an additional charge to their clients without adding any service. If the commission they agreed to is not enough then they should negotiate with their clients to receive a higher percentage.
The fact is a real estate brokerage can charge any reasonable fee for their services including a "processing fee" as long as it is properly disclosed. Consumers are free to accept the fee but make sure you get full disclosure at the time of signing a listing agreement or entering in a relationship with a buyers broker. And understand that you should get an answer that makes sense as to what the fee is actually for. Most of the time you will probably find that behind the smoke screen it is really just additional commission, rather than a fee for additional work. The costs of selling and buying real estate keep incrreasing and it is fees like this that add to that equation. Always interesting, always fun.
Paradise Sharks Real Estate
Direct Line 561 308-0175