New Reason for Fees

Before the real estate recession of the 1990s, large brokerages gave agents an assortment of perks--such as paying for postage on mailers and for several lines of advertising each week on each listing--to help them build and maintain good production.

As sales became few and far between and prices started going down, these perks gradually disappeared. Many overextended brokerages went out of business, and the survivors needed to tighten their belts.

It was at the bottom of that market cycle that companies started taking an administration fee off the top of the commission before splitting with the agents, and began charging the clients an extra administration fee.

We were always told that these fees were needed because it now took so much longer--and so much more advertising, etc.--to sell each house. It was implied that when the market improved, these economy moves would be eliminated.

How interesting to see that now, when the market has improved, these fees are suddenly being attributed to the cost of additional paperwork required by all the new laws ("Some Brokers Add New Fees to Home Costs," Feb. 1).

Especially when the actual work is being done primarily by the agents and not by company managers, who merely review the files for completion just prior to close of escrow.


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