Fees not intended for consumers
Letter to the Editor
By Inman News, Monday, June 1, 2009.Re: ' "Junk fee" backlash echoes online' (May 29)
Dear Editor:
Those (so-called "junk fees"), in my experience, are part of the independent contractor agreement between the agent and their brokerage. They have been put there because of the demand by agents for ever-increasing splits without regard for the cost of the services the brokerage must provide. So, as splits have increased in favor of the agent, various fees for specific services have been implemented -- and agreed to by the agents so that the brokerage can survive.
The agent who cannot justify charging a full commission to the client ends up discounting that item, while in most cases telling the client that "my brokerage/broker is charging these fees to you" in an attempt to gain empathy.
In the above, those junk fees are exactly that when an agent attempts to pass them onto the consumer. Those fees are not junk when they are charged by the brokerage to the agent in order to have a business model that allows the broker to remain in business providing service to their agents.
Allan Bernardi
Broker, CEO
Dolphin Real Estate
San Mateo, Calif.
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Submitted by Robert A. Hulme on June 2, 2009 - 5:08am.
Brokers need to take a closer look at reducing costs rather than increasing fees. Unless Brokers are willing to open their eyes and realize that our business is different today, than it has been in the past, they will not survive. Junk fees will eventually disappear.
Robert A. Hulme
Realtor, GRI, e-PRO
Utah Select Realty
Loan Officer
Mortgage Xpress
www.Tooelecountyrealestate.ws
www.SaltLakeCountyRealEstate.ws
Submitted by John Rakoci on June 2, 2009 - 5:17am.
Reducing overhead would be a better way to add to the bottom line. The practice of adding every warm body they can find should be abolished in favor of a stable of produces and a limited number to mentor. The fees cover a large fancy building with various offices when only a few offices and a conference room are needed. Times have changed and agencies need to change with them.
Submitted by Mary Pope-Handy, CRS, ABR, E-Pro, SRES on June 2, 2009 - 7:55am.
The junk fees vary from brokerage to brokerage and office to office. Oftentimes the agent needs a transaction coordinator to handle the paperwork and simply tries to pass this fee on to the consumer. In some companies, brokers encourage agents to charge the fee but do not demand it, and there may or may not be any tangible benefit to the consumer. I have always refused to charge these fees because it's usually just passing on the agent's cost of doing business to the consumer who's already paying (either by paying the commission directly or by purchasing a home in which the commission is structured into the transaction).
Mary Pope-Handy
Luxor Real Estate Group
Co-Author, "Get the Best Deal When Selling Your Home in Silicon Valley"
www.PopeHandy.com (site)
www.ValleyOfHeartsDelight.com (site & blog)
Submitted by Ronald Ogden on June 8, 2009 - 8:49am.
Allan, I agree with you that "junk fees" that are part of the independent contractor agreement are a legitimate cost of doing business that the agent agreed to pay.
I don't like it, however, when my broker comes to me and says, "You need to start charging your client a $199 transaction fee", when the basket of services provided by the brokerage to the client or to me hasn't changed.
Also, it's a different matter, in my mind, if the broker says, "Look, our brokerage isn't profitable and we need to start charging you a $199 transaction fee--you can pay the fee yourself or pass it on to your clients, it's up to you.
Ron Ogden, Associate Broker
RE/MAX Metro - Salt Lake City, Utah
www.DwellUtah.com
Dwell Utah Real Estate Blog