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Buyer's Agent Fees

Hello Rainers! Happy Friday to all! I have a general question on some advertising issues that I have seen in my local market recently. I am hoping you can shed some light to the legality of this, as well if it is false advertisement. I am sure this area has been covered 1,000 times over on A/R however, with me being in title and closing some of the deals with upset borrowers, I want to get some A/R opinions.

Very recently, there have been advertisements (mostly print ads) regarding a few local real estate shops stating that their services are 100% free, yet at time of settlement, they charge a small admin fee (Generally $185.00)

Since we are in a very blue collar town in Pittsburgh, this makes about 65% of the borrowers who expect to pay nothing, angry. Many people count their "funds due at signing" down to the penny on their home purchases. In all seriousness, we are able to smooth the borrowers over as most buyers are getting fantastic deals and are truly not worried about $185.00 however, when borrowers ask their real estate agents to waive this fee and that it was not disclosed, they say it is not their fee, rather a "corporate" fee and refuse to waive the $185.00

Does anyone have any insight into this?

Thanks!

Jason

Posted by TruClose Financial Services, LLC on 09/19/2008 10:10 AM

Comments (7)

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7 Comments on Buyer's Agent Fees

SEP

2008

I have also seen this fee as high as $800. In Minn. you can charge that fee, but it must be disclosed. I have had many buyers come to me and ask if I charge this fee, (which "we" do not). I hope other companies keep doing this. It's good for my business!

We've seen brokerages do that same thing here... most of the time it's not a corporate fee but a fee going directly to the broker or broker/owner. Either way it should be disclosed to the principals. No one likes a surprise at the closing table.

SEP

2008

I have seen that sort of fee added charged some some, but not so much lately. I don't know why it is not being charged as much now. I also recently read an article in a NAR publication that there is now a risk of a large class action case that may happen soon over this type of undisclosed fees charged to buyers.

Consumers caught on that it was essentially a fee for nothing, and when complaints were filed (as well as the class action possibility mentioned above) the perpetrators of this ridiculous fee have either quietly gotten rid of it, or will- there's also some question as to the legality, as I understand it. The solution for buyers is to refuse to pay it.

SEP

2008

I have never heard of a real estate fee on closing, payable by the buyer.
The buyers don't pay the real estate agents any fees whatsoever here.

Buyers do pay their lawyer's fee directly (each buyer and each seller must use their own lawyer to close a deal here, and they are each responsible for their own payments) ... however, any and all fees that are payable, are disclosed way in advance. They know, to the penny, what is owing on closing.

How can anyone expect to charge and be paid for something that wasn't disclosed?

(There may be a 'fee' that buyers may pay now, depending on what was agreed upon with their agent, but that would fall under the Buyer Representation Agreement; and I'm assuming we're not talking about that...)

I can't imagine anyone being able to charge a fee that is not disclosed and getting away with it. Now we even have to disclose to the buyer if we get any kind of bonus - flat dollar amount, gift cards, vacations, etc. whatever the bonus, the buyer has to sign a disclosure form to acknowledge they are aware of the bonus. So with that said, it seems as though if we have to tell them about what goes into our pockets, we have to tell them what is coming out of theirs.