Real estate is a business, a business run by Brokerages. Brokers employ agents to buy and sell homes for their clients who in turn pay the agent a commission, who in turn give the broker a cut of the commission. In addition to the commission split all brokers add on additional fees to their agents for other services such as office use, access to office personal, printing marketing materials, file coordination and access to real estate related legal advice. These fees vary from brokerage to brokerage and have varied names such as “franchise fee”, “escrow coordination fee”, “file retention fee”, “office desk fee” and so on.
Agents are essentially independent contractors running their own business under the umbrella of the broker. So, as business people who do you think most agents pass these fees on too? In addition, these fees are rarely brought up at the listing appointment.They are often mentioned as an afterthought while they sit you down to sign the listing agreement, then it comes “oh by the way firm XYZ charges a $450 escrow coordination fee in addition to the commission, this is to ensure all your paper work, from both sides of the transaction, is filled out correctly and completed in a timely manner” Really! Isn’t that the agents job? Isn’t that why you hired an agent in the first place? to sell your home and handle all the associated paperwork, to ensure the transaction was handled legally, diligently and in a timely manner! And more often than not there’s more than one additional fee added into your listing agreement. You as a seller can legally be charged a myriad of unnecessary fees as long as they are disclosed in your listing agreement.
The only cost a homeowner should ever incur while selling their home is the commission. All these fees agents pass on are the cost of doing business, the cost of being a real estate agent. Your agent has a fiduciary duty to look after your best interest whether there is a “escrow coordination” fee in the listing agreement or not. That is the definition of being a real estate agent, “Here’s all the paper work from the sale of your home Mr. and Mrs. Seller, you elected not to pay the escrow coordination fee, so I didn’t go through all of it and verify it’s all been properly signed and dated, hope it’s all there, thanks, don’t call me if the buyer sues you”. Look, the majority of these fees are things your agent and the brokerage that employs them are required by law in every real estate transaction to do anyway, they are a part of doing business. DON’T AGREE TO PAY THEM!
So, if you find yourself with an agent and you’re ready to sign a listing agreement and then you hear “ooh by the way, in addition to the commission my offices charges a “file coordination fee” Stop them right there, thank them for their time and then call me.