BrokerageIndustry News

Real estate fees raise RESPA controversy

Part II: Broker fees divide industry

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Editor's note: This is Part II of a three-part series exploring the legal, ethical and competitive issues surrounding flat fees being instituted by many brokerages on top of their traditional percentage-based commissions. Part I explored the industry's rationale for instituting the fees, and Part III will look at the online backlash from consumers and real estate professionals. If some consumers and real estate agents aren't happy about the flat fees many brokerages are slapping on top of their traditional percentage-based commissions (see Part I), there are also unresolved questions about the legality of the practice. A recent ruling allowing a class-action lawsuit to proceed against an Alabama-based brokerage has captured the attention of other companies that could face similar claims that they are violating the Real Estate Settlement Procedures Act, or RESPA. The case involves JRHBW Realty Inc., a Birmingham-based company that does business as RealtySouth, and the $149 ...