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Relo fees that seem to grow and grow

By
Real Estate Agent

Earlier this week, I completed and e-filed my 2006 Income Taxes (what a joy and a pleasure that was).  Although I track my figures throughout the year, I was absolutely blown away when I looked at my 1099 from Coldwell Banker where all of my closed transactions had been from relo business and saw what I actually had earned (can I hear an ouch?).  I do state up front that I was fully aware of the terms involved.  Relo charges had increased up to 35-40%.  Now that's a lot of money when you consider you still have your broker split to consider.  In April of 2006, I left CB and joined KW where I no longer do relo! LOL

I came across an article in Inman News from 2/13/2007 which seems to be right on point.  The article addresses how relo fees have "risen over time from 15 percent to 20 percent of a real estate agent's share of a home-sale commission to 35 percent or more -- several real estate professionals told Inman News that relocation company fees can exceed 40 percent.  This is causing lots of real estate folks to "just say no" to relo,

IMO, there;s also the age old question, why do they (relo companies) charge so much when WE do so much work to close the deal.  On this listing side, the paperwork alone is time consuming, on-going and tedious.  Some of that work (BMA's, EMC's) has to be done before you even get the listing and if you don't get it...time spent=money lost.

The article is well worth a look see.

Disclaimer:  Writer acknowledges that she has not yet had a 2nd cup of coffee :>

Cynthia Sloop
Community Association Manager - Indianapolis, IN
Laurie I have heard this complaint among the agents in my office too.  I am not qualified as of yet to even have the so-called coveted position of being on the Relo team.  A person is suppose to have at least 3 years experience and then has to wait for a position to open up and pass the interview.  Thanks for sharing your take on this part of real estate and the article. 
Feb 17, 2007 12:54 AM
James Gordon
Sibcy Cline Realtors® - Cincinnati, OH
REALTOR, PBD SFR SRS
With the amount of fees that many RELO companies ask for -- up to 45% -- maybe they should get limited service instead of updates filed on a biweekly basis.
Feb 17, 2007 12:59 AM
Denise Brophy
Re/Max Realty Specialists - St Johns, NL
ABR ePRO CERC

Hi Laurie:

Relo's are a great side business but if you had to rely on them for the bulk of your business, it is a big OUCH!

We have companies now taking 30-35% of our share before broker splits, in some cases telling us the commission fee as well.  At 6% is might be manageable but when the relo company tells the seller 5% and we have 2.5% split with another agent plus our relo referral fee, it amounts to 1.25% commission fee for the listing agent.  Its time to rise up.

 

Feb 17, 2007 01:09 AM
Misty Huntley, ABR, GRI, REALTOR
Wynd Realty - Snellville, GA
I completely agree! We pay 40% at Century 21 before the commission split. I maintain excellent relationships with former clients for referrals.
Feb 28, 2007 11:50 AM