Is it legally justified to charge a transaction fee????

Real Estate Broker/Owner with Realty Empire Incorporated

Let's see I propose a question to all realtors who are working with buyers of a foreclosed property or short sale property and those realtors selling these properties.

Is it a justified fee, to charge the Buyer the Seller's transaction fee because the banks don't pay it?

This question has recently become the subject of class action lawsuit in federal court.  (Busby vs. Realty South April l 09)  The court ruled in favor of the buyer (Busby) this decision appears to support a position taken by HUD that section 8(b) of RESPA.

Under RESPA it is prohibited to charge a fee to a consumer where the provider furnishes a service that is nominal or duplicative.

If a broker charges a separate fee other than the permitted commission fee charged to the customer then broker must disclose such fee and the fee must be in exchange for real estate services provided. The fee cannot be nominal or duplicative of any other service that the broker is providing.

As for a listing broker, who has no relationship with the buyer, requires the buyer to pay a transaction fee, it would be an unearned fee under RESPA as the buyer would not obtain any benefit from the services provided by the listing broker.

Now, I want to know how this is happening?

 If you are working with a Buyer who does not want to pay the transaction fee for the Seller then you are is a predicament, you might as well just forget about making an offer because the Sellers agent is not going to work with your offer.  If, neither the buyer nor the seller pays the fee for the listing broker then the seller's agent is responsible to pay this fee from their commission check to his/her broker.

Source: Florida Realtor

Posted by


Stephanie Leon

Real Estate Broker
Realty Empire

6625 Miami Lakes Dr.
Miami Lakes, FL 33014

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Dan Edward Phillips
Dan Edward Phillips - Eureka, CA
Realtor and Broker/Owner

Very good blog!  Thank you for taking the time to write it and share it!

May 04, 2010 05:06 PM #1
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Stephanie Leon | Miami Lakes Realtor®

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