It may look like your typical American home, but when this property in Trussville, Ala., changed hands for $187,000 in 2004, the stage was set for a legal battle that could have implications for every real estate brokerage's business model.

The buyer, Vicki Busby, was charged a $149 "ABC fee" (administrative brokerage commission) on top of the $4,675 commission she paid her agent (the agent's split of the 5 percent commission on the sale -- see the HUD-1). Busby's agent didn't see any of the ABC fee -- it all went to the brokerage, RealtySouth, which is now facing a class action lawsuit alleging it violated RESPA by charging an unearned fee.

Such fees are becoming increasingly common in some markets, and often they're even bigger. In a three-part series beginning today, Inman News looks at the legal, ethical and competitive issues involved in charging such fees.

Defenders of the fees say brokerages have instituted them in order to cope with the rising cost of providing services and smaller commission splits with agents. As long as they're properly disclosed, they are both legal and ethical, they say.   

But brokerages that decide to charge the fees seem to be running the risk not only of lawsuits by consumers, but of alienating their own agents, many of whom see them as "junk fees" (see Part I).

The particulars of the Busby case will be discussed in Part II of the series tomorrow. For a taste of what's in store in Part III -- which details the backlash by consumers and agents -- check out this Q&A that RealtySouth prepared in 2003, in hopes of defusing the protests it expected from agents when it implemented an ABC fee. Questions addressed included:

Wasn't Realty South "being greedy by imposing such a fee?" Would competitors use the fee against the company? What if a potential client decides to look for a company that doesn't charge the fee?  "Why do you keep putting these roadblocks in the way of of my doing business?"

Agents continue to voice similar concerns today, as the fees become more common and larger.

Incidentally, Busby's home is back on the market. It's listed for $169,900 -- less than it sold for in 2004 and 2001. Needless to say, the listing is with another brokerage.

TIP Strategies Inc., an economic development consulting firm, has mapped out U.S. job-loss trends using U.S. Bureau of Labor Statistics data. You can press the "play" button to watch as green circles (representing job growth) shrink and then blossom into red circles (job loss) over time.

If this were a game of "Missile Command," you might expect "Game Over" to pop up at any moment. But how far from over is this grisly unemployment trend?

First, Edmund Andrews, an economics reporter for the New York Times (who makes $120,000 a year), falls in love, and then he buys a $460,000 house in Silver Springs, Md., by taking out two mortgages (a primary mortgage of $333,700 and a "piggyback" loan for $80,300).

Here's how his broker convinces him not to worry about the loans: "'Don't worry,' " Bob reassured me, saying what almost everybody else in real estate was saying at that moment. "'The value of your house will be higher in five years. You'll be able to refinance.' "

And then the credit-card debt starts piling up; and then his wife gets laid off; and then they default on their mortgage, but JPMorgan Chase is so busy dealing with the mess of the housing market that the bank is too busy to foreclose on his home.

Wondering how he, an economics writer, failed to understand what he was doing (well, he knew he was gambling), Andrews ends his essay this way: "Eight months after my last payment to the bank, I am still waiting for the ax to fall."

Reposted with permission from Curbed.com. Click here to view original post.

Copyright (c) 2009 Curbed.com LLC

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What's your opinion? Leave your comments below or send a letter to the editor.

The program for Blogger's Connect SF '09 is filling out very nicely.  The entire day is jam-packed with information and tips that everyone from the novice to the expert will find useful.

As Blogger's Connect continues to evolve in order to meet the needs of the audience, there have been all kinds of changes.  This year, you'll notice that some of the time slots have two sessions.  This will help people maximize their time and learning potential by choosing the session that best fits their needs and level of expertise.  

The Blogger's Connect Keynote is gonna ROCK!

Another big change to the program this year is the rebirth of the Blogger's Connect Keynote.  We didn't want to bring the keynote back unless we could find someone who we knew would blow away our audience with knowledge and useful takeaways.  There was much debate and discussion over who could do this the best, and when all was said and done, we were thrilled to announce that Sonia Simone, Senior Editor of Copyblogger.com, will be this year's Blogger's Connect Keynote speaker.  

Copyblogger was one of the first blogs that I found when I started blogging a few years ago, and am I glad that I found it.  On a regular basis the writers at Copyblogger share their insights and expertise on how to make dynamic, compelling content that will not only attract new readers and customers, but get them to act, so that you can grow your business.  

Sonia Wants to Get to Know You a Little Better

After graciously accepting our invitation to be the keynote speaker, Sonia asked if she could get to know a little bit more about the Blogger's Connect audience.  Like any good presenter, she wants to make sure that the content she is delivering is not only relevant, but also valuable.  She asked if we could send her some examples of real estate and mortgage blogs so that she could get a feel for the audience.  

I could have picked 20 or so and sent them to her, but what fun would that be?  One of the great things about being the Community Manager for Inman News is that I get to engage our community and watch it grow.  I thought it would be kinda presumptuous of me to send a list of blogs to Sonia, so I'm asking for a little help from the community of Blogger's Connect attendees.  

If you are planning on attending Blogger's Connect SF '09, and you have a blog, leave a link to the URL as a comment on this post (NO KEYWORD LINKING! SERIOUSLY.)  

I'll make sure that Sonia reads the post, and she can see for herself the kind of bloggers that will be in San Francisco.  How's that sound?

So, do yourself a few favors-- 1) Head on over to Copyblogger.com so that you can make yourself a little more familiar with Sonia (you can follow her on twitter, too), and 2) Leave your blog URL in the comments so that she can get to know you better.  

Don't Miss Out!

And hey, if all of this sounds like great fun and and awesome opportunity to learn from the best in the business-- that's because it is!  Don't be left out of the fun.  Register for Connect SF '09 right now!

See you in San Francisco!

From Future of Real Estate Marketing blog

Inman News has launched a survey to study the experiences agents and brokers are having with real estate-owned (bank-owned or REO) properties and short-sale properties.

Complete the survey for a chance to win a $200 Amazon.com gift card. Survey respondents can also choose to receive a free copy of the survey results.

The survey is a part of this month's focused coverage on "Fixing the Foreclosure Crisis."

Click here to take the survey.

Some of what's going on in the world of real estate today, as seen through the window of Twitter:

Within 40 minutes of landing in Washington, D.C., Phoenix-based broker-owner Jay Thompson has remarked twice about the horrible traffic and then declared "apparently I am now in Maryland."

NAR has paid Thompson's way to the midyear conference in order to provide feedback on the trade group's IDX policy -- which according to the latest staff interpretation, allows MLSs to require that brokers block search engines from indexing other brokers' listings (see story).

1000Watt Consulting's Marc Davison fumes that "The next broker who complains they don't have $25,000 2 develop an app then takes a month off 2 cruise Mediterranean, why return?"

For additional context, check out Davison's Inman News column today (welcome back Marc).

Davison writes about his frustration with what he sees as the failure of some in the real estate industry to recognize the potential of the iPhone, which runs an operating system that makes it possible for companies to develop customized applications. Trulia and Zillow are among those who have seen the light -- Davison reports that Zillow's Spencer Rascoff says Zillow's new iPhone app was downloaded 150,000 times in eight days and generated 25 percent of the site's searches last week.

Another Inman News columnist, Bernice Ross -- CEO of RealEstateCoach.com -- tweets that "I am conducting a training class on Twitter at Long & Foster in McLean Virginia -- all but 2 people are new to Twitter."

If any of this sounds interesting and you are not Twittering, here's a recent post that can get you started. It includes links to a list of real estate profesionals using Twitter, and blog posts by Gahlord Dewald on using Twitter for lead generation, customer service, trend spotting and reputation management.

This month, Inman News will gauge the depth of the U.S. real estate foreclosure problem with a series of articles, a reader survey and other news and features.

We'd like you to share you personal experiences in working with homeowners and properties facing foreclosure, and to hear your suggestions about ways to treat the financial and emotional wounds inflicted by the foreclosure wave and to minimize the impact of foreclosures on individuals and communities.

We are offering a $200 Amazon.com gift card to the author of the best essay we receive this month on the topic of "Fixing the Foreclosure Crisis." Essays should be 500-1,000 words in length, should not be promotional in nature and Inman News will retain all copyrights for published works. Send essays to: future@inman.com.

We will also award a free pass (for new registrations only) to the upcoming Real Estate Connect conference in San Francisco to the author of each essay we choose to publish in full at Inman.com.

Click here for more details.

Flickr photo by austrini.