What are brokerage admin fees? -

An administrative fee is a fee charged by some brokerages (who your agent works for) to the home buyer and/or seller and is paid at closing. It can range from $200 to $700 dollars, or more. Most agents agree that this administrative fee is a “cash grab”, but others believe that brokerages are trying to recruit more agents by offering better splits and letting agents keep more of the commission. To off-set the brokerage keeping less commission, they are having consumers pick up the tab. These fees started to creep into the industry around 2004. Instead of brokerages looking at their business model to see how they can save or reduce costs, they added a fee to homebuyers and sellers. If the need for this fee was really based on “administrative work” shouldn’t some of those issues have been resolved with the advancement of technology?

So, how do you know if you will be charged an admin fee?

You might see this fee in your loan estimate.

This does not mean that you have to pay it or that you will definitely be charged it. However, most lenders will put it in the estimate as a heads up.

Your agent should specifically mention this fee.

When interviewing agents, they should bring up this fee during your conversation. It should also be stated in the agreement that they might ask you to sign before working with them. It would also appear within the paperwork in which you submit an offer.

3. It will show up in your settlement statement.

If you see this surprise fee in your statement, you should tell your agent you aren’t paying it, especially if they didn’t give you the courtesy to even tell you they were going to charge you the fee.

You have every right as a consumer to negotiate this fee, but you need to ask about it before you sign an agreement with your agent. If your agent refuses to remove the fee, there are other agents out there that don’t charge it, so find a different agent, like the ones at Coldwell Banker- Anchor Real Estate. WE DO NOT CHARGE ADMIN FEES.

*Condensed from an article dated April 2023 “Buying a Home”