Realty Company Charging Clients $250 ‘Services Fee’
Citing increased costs, Jon Douglas Co. has begun charging real estate clients a $250 “professional services fee” on top of agents’ usual commission. It is believed to be the first time a brokerage in Southern California has levied fees on clients.
The company said it is imposing the fee regardless of whether a client is buying a property or selling one. In real estate transactions, only the seller pays a commission, typically 6% of the sales price.
The Beverly Hills-based brokerage said it expects competitors to follow its move. However, one rival brokerage said it has no intention of doing so.
“I’m having trouble with the idea of hitting a buyer for $250 when interest rates are up a bit,” said Fred Sands, president of Fred Sands Co. of West Los Angeles.
The fee signals that although the real estate market has picked up somewhat, brokers are still having a tough time. Prices remain below the peaks of five years ago, meaning brokerages make less money than they used to on each transaction.
Jon Douglas said the fee will help cover the cost of improving its technology and services offered to clients. The company said the fee replaces a 5% transaction charge levied on agents to help cover overhead. Other brokerages charge their agents similar fees.
Lou Piatt, executive vice president of Jon Douglas, said no customers have balked at paying the fee since it was instituted two weeks ago. He said the fee is insignificant compared to the price of a home.
Apparently Douglas agents having good luck with tips contained in a booklet Jon Douglas distributed to them when it announced the fee. In the booklet, titled “Agents’ Guide to Professional Services Fee,” agents are advised how to handle client objections.
“You are trained to sell, and we expect you to get the professional services fee from the client. . . ,” the booklet says. “Compare this fee to all the other fees associated with a closing: escrow fees, title fees, loan processing fees, appraisal fees, etc.”
Agents are also told not to worry about losing clients to brokerages that don’t levy fees. Competitors “will most likely introduce their own professional services fee as soon as we’ve shown the way,” the guide says. “We feel that clients will simply take the fee in stride.”
Agents are cautioned that they will be required to pay the fee if the client refuses to do so.
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When the cat gets out: The case of the missing cat aboard a Tower Air jetliner offers a reminder that airlines treat lost pets as baggage claims.
Last week, 3-year-old Tabitha apparently escaped from her cage in the plane’s cargo hold and disappeared into a space that separates a storage compartment from the fuselage. Owner Carol Ann Timmel of Beverly Hills could not persuade Tower Air to ground the plane until Tabitha could be found. The airline did allow the American Society for the Prevention of Cruelty to Animals to set traps for the cat.
The cat has not turned up. Timmel has little recourse but to file a lost-baggage claim. Travelers who lose pets are compensated for what the pet is worth, up to a maximum of $1,250.
The airlines say about 500,000 pets travel each year and that few are lost. The Transportation Department does not track missing-pet reports, but it said it has received one consumer complaint about a missing pet during the first five months of this year.
Travelers with very small pets can keep an eye on them when flying. According to the Air Transport Assn., an industry group, most airlines permit travelers to stow pets under cabin seats if the cages are small enough, although arrangements must usually be made in advance.
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The bear facts: A Pasadena company has redesigned its bear-shaped honey bottles to make room for a new nutrition label.
Jack’s Honey Bee Products is hoping the labels will give its products an edge over competing brands. As reported here in May, honey packagers using bear-shaped bottles are exempt from the government’s new nutrition labeling rules.
The new labels are required for most foods and contain information about calories, fat, sodium, carbohydrates and certain other nutrients.
Jack’s Honey President C. Byron Capps doesn’t think consumers will be deterred by the revelation that honey contains 60 calories per tablespoon--more than sugar. Capps points out that the nutrition label also tells consumers that honey contains no fat. “That’s what people really care about,” he said.
