The “Administrative Fee” (aka Brokerage Fee, Technology Fee, ABC Fee) is a flat dollar fee that real estate brokers charge to buyers and sellers above and beyond the real estate commission. The charge ranges from $100 to $395.
This fee has been implemented only during the last several years but already, consumers and real estate sales associates have become complacent with it. If consumers refuse to pay it, many brokers collect the fee from the sales associate.
Many brokers instruct their agents to explain why this fee is charged. Here's one explanation: "The Pennsylvania Real Estate Commission has increased the time period for which brokers must store their files. We, therefore, must pass this increased cost along to the consumer." This explanation is false. The Pennsylvania Real Estate Commission has not increased the time period for which brokers must store their files.
Here's another explanation: "The fee is to pass on the cost our broker has had to endure by implementing expensive technology." This is also a bogus claim.
The law that applies to this fee is called RESPA (the Real Estate Settlement and Procedures Act). Generally, RESPA requires that all fees charged at closings must be reasonably related to the value of the service provided. Therefore, if the broker is not actually providing services above and beyond what they were previously providing, they can't charge the fee.
The class action bar has taken note of the fee and a lawsuit has been filed in Federal Court in Alabama to challenge the Administrative Fee. Read more about the lawsuit and NAR's perspective in this Washington Post article.
For an even more comprehensive analysis of the fee, click here for ALTA's view.
Achieve Realty does NOT charge an “Administrative fee.” This results in an immediate, obvious savings for buyers and sellers
Comments(4)