I have lurked here for a while and I have topic I would like to get your opinion on.

The Brokerage I work with has instituted a "Transaction Fee Policy" that says I must charge my clients this transaction fee and if my client refuses to pay the transaction fee then the fee is deducted from my commission split.

I understand the issues around a transaction fee in general as discussed on this post: http://www.agentsonline.net/forums/ubbthreads.php/topics/237685/1.html
I don't have a problem asking my clients for the fee but if they refuse...

What is your opinion of deducting the transaction fee from the agents commission split if the client refuses to pay it?

Find a new broker.

There are several brokers in NJ forcing this fee upon their Agents now because they are hurting for cash. I would have a very hard time telling a client of mine "thank you for the full 3% commission on my side, and by the way, you owe my broker another $250."

Its a BS fee and Agents should not stand for it.

i personally think it is a legit way to nickel and dime someone and that all admin fees should be knocked off in a commission based business due to the fact that we are not an a la carte business. if we charged for individual services rendered then i would have no problem with admin fees.

do i charge tehm? yes
do i like them? HECK NO

I paid those 'transaction fees' in the past. I would not pay them again. What you do depends in large part on the negotiating power you have with your broker. Can he afford to lose you?

I would find a new broker, too. It is not fair for the broker to charge YOU the fees when he's already getting a pretty good split from and/or a desk fee.

Now, if everyone else is doing it in your market area, then switching brokers won't solve anything unless there's another broker who doesn't take it out of your pay.

My broker charges a transaction fee. I pay it to corporate in addition to my split with my office.
Does anyone else have this huge fee?

Would this be considered a "royalty" fee? Do you belong to a franchise?

The only thing we pay to corporate is an 8% fee off the top. Then the broker only takes his split, no other fees.

This is excactly why I own my own company and do not have agents.Agents by nature watch there bottom line and I don't blame them.Brokers based there companies structure and splits on sales volume of the past .Guess what those sales have gone down but operating costs remain the same.

This is exactly why I got out of the restaurant business.Employees always complaining about there pay,not enough hours,they work to hard for the money,they have problems at home,etc.,etc.

I just enjoy doing my own deals and not dealing with the DRAMA of agents.

Nothing wrong with it it is just not my thing.

I wouldn't want agents either if I had my own office. Perhaps a partner but no agents to supervise. you're right, there is a lot of drama and no matter how much you do for them they'll always be pissy about something.

Myself excluded, of course...

My company charges a $350 transaction fee. Most large companies in my area charge a similar fee too. I don't like the fee, but I still have to deal with it.

Like "super realtor" I work alone (no other agents) in a non-franchise business. What I earn is not divided up with another broker or other corporate entity. I have been there in the past where, like Perky, I was loosing 8% off the top and then splitting the balance with a sponsoring broker. Never again!

What's the quid pro quo for your Client/Customer ?

I charge a "Closing Fee" (of maybe $100 to $200) for conducting a Closing here in my Office when I have a simple Cash Transaction and the Attorneys don't want to be bothered; but would do it for 3X what I charge. Sometimes the Buyer and Seller share this cost because they both see it as being beyond our normal Sales or Marketing efforts, and what they get is quite tangible.

What do your "People" get for the Transaction Fee ? (In 10 words or less, please)

no transaction fee here...going back to the OP's question, though...

if your customer refuses to pay the transaction fee...and it doesn't come out of your side of the split...where SHOULD it come from?

If it's required by your broker you have 4 options.

1) Lose the customer over a $250 fee.
2) Pay the fee out of your pocket.
3) Negotiate with your broker for them to "pay your fee" for you because you're a valuable asset to his business and it'd be bad for his business to not pay the fee for you and your customers.
4) Find a new broker.

probably, nothing, nothing, nothing, nothing, nothing, nothing, nothing, nothing, nothing.



most brokers that i know cant even answer that in a competent manner that would make me as a customer say, oh, ok i see....

Personally I do not mind the 8% fee off the top that goes to Weichert because of the advertising that Weichert does for all their listings online (online real estate ads in the NY Times, Philadelphia Inquirer, and a NJ newspaper - all places where our customers come from) in addition to the call center which enables buyers to speak to an agent within 15 minutes when they call on the listing.

My previous broker charged a 6% "broker fee" on top of the split but never did anything with that. At least with the 8% to Weichert, you know that it's provding you with something good to impress your sellers with and possibly hasten the sale of your listing.


What I hate about Weichert is how they make you pay $200 for 4 day training sessions to be one of the agents for the call center, and then they don't even provide you with coffee while there. That's really bad IMHO.

Costs are typically the same for everyone generally.In other words all the burger or pizza restaurants have almost the same food cost if they are national chains.So it comes down to your little differences and how you package and market the product.

Whether you call it a trans fee or just simply charge a higher franchise fee the costs is built in.Example some brokers would charge say a 6 percent franchise fee and no transacation fee.
Others charge a 4 percent franchise fee and a transaction fee.The costs might be the same but with the transaction fee the consumer is seeing it on the front end.

Generally when you build in costs you do it so that the fess are hard to question.I had a matress guy tell me one time that they spin new matress models as they are constantly improving there products.The REAL reason he told me is for SEALY,and all the other brands to add one little thing to there beds so they can change model numbers constantly.This way the consumer can't get a baseline to drive down costs on the product.

If people know what stuff costs they hammer it down.If they don't know what stuff costs it's harder to negotiate and know if you got a good deal or not.

The agents care about what they get from the broker.I think if you are going to carry agents you have to go "ALL IN" and give everything to it to be fair to your agents.Sadly some brokers view adding a few agents to supplement and fix there brokerage which is a deadly combination.

the first broker i was with charged a 6% franchise fee, a 350 transaction fee and put a new agent on a 50% split....rofl!!!!!!!!!!

once i learned a little about the business i left and have not regretted it one bit!!!!

did i mention that my original broker went out of business?


with realtor.com your listings you are on over 900 different websites! call realtor.com and ask....they can give you a printout.

There was an article recently in the Realtor Magazine about these being challenged in courts because no additional services are provided for this additional fee.

http://www.realtor.org/rmolaw_and_ethics/in+court/pastarticles/0809incourttransactionfees

Here's another:
http://www.realtor.org/RMODaily.nsf/All/B415A9DA7

There is no tangible benefit for my client. Its nothing more than an income stream for the company.

Although I don't agree with charging my clients a transaction fee, I have a bigger problem with my broker taking it from me if its not collected from my client.

What bothers me most about transaction fees is that they seem very gimmicky. We were given no good 'script' for the fees. Just general mumbo jumbo about office overhead or something along those lines. It reminded me of the type of sales tactics used in many industries that I really resent as a consumer. You know how that works... you agree to a purchase and then read the fine print and find other hidden charges. Of course, no client was ever forced to agree to these fees. And I can remember getting into a bit of an argument with my broker once. I told him I refused to eat the fee. As I remember, it was NOT deducted from my commission check.

Flactem, I'm curious about this fee - been thinking about this a little. Does your broker elaborate on what the fee covers? How much it costs? How much would you have to pay if your buyer refuses to pay?

It's not uncommon to see some offices charge their clients an additional "transaction" fee of $250 - $350 dollars but exactly for what I'm not sure...they don't seem to "do" anything with the money besides put it in the broker's account....

Perky, The company's only justification for the the fee is a vague "it covers some of the cost of doing business/handling paperwork/archiving documents" which translates to direct income to the bottom line.

The amount of the fee is irrelevant. The precedent that it sets is the problem.

The sense of self entitlement for payment for services that are not even provided is on the verge of larceny. Especially when the client refuses to pay it and the amount of the fee is deducted from the agents commission.

If you haven't read the articles I posted and you are charging a transaction fee, you really should.

If you don't know what they cover, you are opening yourself up to these lawsuits! As litigious as people are, once there is a precedent, the number of lawsuits will increase exponentially. And someone will absolutely figure out a way to make it a class, for a class action lawsuit and then your clients will get the opportunity to be part of a suit delivered to their door by the USPS.

TB, can you provide a link to the articles?

Thank you.

Scroll up to my post yesterday at 2:56pm in this thread.

The issue IS NOT the transaction fees.The issue is how the broker is allocating costs to stay afloat.Many other brokerages are doing this they just have it built into the franchise fee,the commission split,or monthly dues.

Because the agent and buyer and sellers can SEE IT they complain.

I can guarantee you other companies have these operational costs built in in ways that are not as noticeable.

If I was this broker I would immediately restructure the fess into something else but still make the money.What it costs is what it costs to run a brokerage.If the agents feel it is too much or not enough is offered then they can leave.I just think this brokerage went about it the wrong way.

Craig Proctor has a similar fee for working with buyers that they pay upfront.

There is great confusion and transposing in this thread of a TRANSACTION FEE that is charged to the client, and other fees charged to the agent. This thread was meant to address the $149 or $195 or whatever fees that are tacked on in the listing agreement for miscellany (lining of the brokerages pocket, because the agent never sees any of it, despite being the one encountering the costs of marketing).

Again, we aren't talking about fees that your broker charges you, like franchise fees or splits. Am I right, original poster?

TB - it amounts to the same thing as the agent being charged...

If you're an agent and you have a good buyer...you explain the system and the fees and the buyer says "i'm not paying that crap - i'm spending enough already"...the agent now has a choice...

1) pay the fee themselves
2) try to get the broker to waive the fee (good luck), or
3) lose the buyer

What would you do?

Make no mistake - the agent is responsible for the fee no matter who is "technically" supposed to pay it.

Unless it was spelled out in my ICA, I wouldn't pay it, and I certainly wouldn't charge my client. Believe me - I know. My first year in the business was with a franchise who had one and I absolutely NEVER did a transaction with one in it, and I closed about 30 deals.

And if it was in my ICA, well, I wouldn't hang my license with that company. I don't charge fees that don't result in higher levels of service. It's like selling that "special undercoating" on a new car.

so then, you negotiated with your broker and they paid it for you?

Most of the time brokers justify it by saying "we have support staff who help to manage your transaction and they need to get paid"...so ultimately SOMEONE pays it...either you, your broker, or the customer/client...

Personally, I don't like'em, I don't use'em, and I don't like when listing agents charge'em to me as part of their compensation offered to buyers agents (that's been the fad in my area for the past year or two as well...you'll see "X% minus $250")...

I do understand'em, though - and ultimately someone's paying for that closing coordinator (even if that closing coordinator is YOU, and you consider it part of what you're paid to do out of your percentage...it's your time/effort and that equals $$...

That's how I understand it, anyway...

The agency I am with has had this fee($195.00) for about 5 years and in the beginning it was called a "Document Retention" fee and all of the closing documents were scanned onto a CD and the clients were given this. After the first year we were told that it was no longer a "Document Retention" fee but a "Transaction Fee" and everyone that had paid the $195.00 for a "Document Retention" fee was given the money back...it seems that our attorney didn't like the verbiage especially when records have to be kept for 7 years anyway.
I don't like the $195.00 fee and haven't passed this fee on to my clients in years..I get a fair split from my broker and look at it as the cost of doing business. May of the agencies in my area have a higher fee than this.

Paid it to who?! It goes to the broker so why would they pay themselves?! These are brokerage specific fees, not fees passed onto the franchise. I think there is still some confusion as to what we are talking about here!

is there a broker on here that can explain exactly what the transaction fee covers?

fogot to add.....and how you as a broker have your agents sell a client on that fee.

Ok, maybe this will be helpful.

Like I stated in my previous post on this thread, my brokerage charges a $350 "document protection fee" or "transaction fee". We even have a document that explains the fee. I believe the fee is supposed to be for document storage. It costs money to store all these real estate files. Maybe I will try and post the document that explains our fee.

I hate this fee because if the client doesn't pay it, I have to pay it. We also have a transaction coordinator that we can use if we pay for their services too for an additional $195. That is something completely seperate though. Many agents charge their clients the transaction fee plus the transaction coordinator fee. Some agents charge a bit more and try to make a few bucks off this fee. I don't think that is right. I don't use a transaction coordinator, so I have no need to charge more than $350.

Correct, we are talking about a fee that if unpaid by my client is deducted from my commissions after splits.

After reading the articles posted by TB (thanks TB!), I'm concerned about the danger of these policies of accepting money for intangible services will result in class action lawsuits of which I want no part of!