DEAR BOB: As a Realtor, I am annoyed by your constant put-down of real estate agents and brokers, especially regarding unnecessary junk fees, as you call them. It seems all right with you for the public to negotiate the sales commissions charged to sell their properties. Sellers offer us 3.5 percent or 4 percent. “If you don’t take it, the next agent will,” seems to be their thinking. Why then can’t my agents attempt to recapture some of that lost revenue by negotiating a transaction fee or administration fee? Stop trying to make us agents the bad guys. My agents go on a listing appointment and are confronted by sellers who saw your article. Thanks for the help – Peter M.

DEAR PETER: I have nothing but the highest respect for real estate sales agents and brokers. Personally, I’ve been a licensed broker for 38 years (although I no longer list and sell properties).

Purchase Bob Bruss reports online.

In the last few years, some brokerage managers have instructed their sales agents to require sellers to pay, in addition to the sales commission, a transaction or administration fee. These fees range from $195 to as high as $595, in addition to the sales commission.

If a home seller agrees to pay such a fee, in addition to the percentage sales commission, as part of the listing contract, that’s fine. However, with the high sales prices of homes, which result in automatically increased brokerage sales commission, home sellers resent being charged additional fees on top of the generous commission.

Mortgage lenders are notorious for attempting to charge “junk” or “garbage” fees, which were not disclosed to borrowers in the badly misnamed “good faith estimate” of loan charges. Now, some real estate brokerages are attempting to add similar last-minute transaction and administration fees, in addition to their sales commission.

As you know, these add-on fees go to the broker, not the sales agents. In other words, they increase the broker’s profit, which already comes from part of the sales commission. If you expect referrals from satisfied home sellers, I suggest you drop the unnecessary transaction and administration junk fees on top of the sales commissions.

WHAT IF HOME BUILDER WON’T ALLOW INSPECTIONS?

DEAR BOB: Several months ago we signed a contract to buy a brand-new house. It is supposed to be finished by Dec. 1. But I doubt that will happen. Shortly after the framing was completed, my wife and I dropped by to inspect our new home. The builder was not happy to see us. He claimed his insurance wouldn’t cover us if we got injured snooping around. However, I’m bigger than he is so we continued looking. We discovered two major errors that do not conform to the plans we received. The builder refused to correct them until after my lawyer wrote him a strong letter. Now we are very concerned and want to hire a professional inspector to check the house before the Sheetrock covers up the plumbing and wiring. Do we have a legal right to inspect? – Herb R.

DEAR HERB: Probably not. Most home builders use non-negotiable printed contracts prepared by their attorney. Although these contracts usually don’t permit professional inspections, neither do they prohibit them.

However, I hasten to add the best home builders encourage buyer inspections during construction, such as after the framing is complete but before the Sheetrock is installed. These are called “dusty shoe” inspections.

Because you already found several builder errors, I suggest you continue inspecting your new home during construction but without becoming a pest. Bring your professional inspector along. Try to be extremely friendly with the builder.

WHY CAN’T REAL ESTATE BE “PAYABLE UPON DEATH?”

DEAR BOB: My bank and brokerage accounts have “payable upon death” provisions, which avoid probate when I die. Why can’t my real estate also have “payable upon death” provisions in the deed to avoid probate? – Beth C.

DEAR BETH: A very few states allow “payable upon death” clauses in deeds. But this can lead to problems. For example, suppose your home’s deed leaves your home to your brother.

However, he dies before you die. Who will then receive title to your home when you pass on if the deed says it goes to your now-deceased brother?

Or suppose you and your brother have a disagreement and you no longer want him to receive your house when you die. Unless you change the “payable upon death” provision, the house will still go to him.

As explained here many times, the best way to avoid probate and be sure your real estate and other major assets go to those you want to receive them is to have a revocable living trust that includes your major assets. A living trust can be easily amended as many times as you wish.

Unlike a will, which requires probate costs and delays in most situations, a living trust avoids probate costs and delays. More details are in my new special report, “24 Key Questions: Living Trust Secrets Reveal How to Avoid Probate Costs and Delays,” available for $5 from Robert Bruss, 251 Park Road, Burlingame, CA 94010 or by credit card at 1-800-736-1736 or instant Internet PDF delivery at www.bobbruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his
Real Estate Center
).

***

What’s your opinion? Send your Letter to the Editor to opinion@inman.com.

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