Kenneth Harney Looks at Controversial Real Estate Fees
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Long-time real estate columnist Kenneth Harney had an interesting column this past weekend that focused on the administrative fees that many real estate brokerages are now charging buyers and sellers.
For those readers who haven’t been at the settlement table in the past couple years, a number of brokerages across the country started tacking these fees on to their commission rate in order to generate revenue, according to Harney. However, it is unclear at many brokerages what these fees actually cover, a point that a District Court ruled on last year with a decision stating that “no specific services [were] performed to justify the extra cost.”
Now, the Department of Housing and Urban Development’s General Counsel Helen Kanovsky has written a letter to attorneys in the industry offering the closest thing to guidance on the controversial fees.
From Harney’s column:
Federal law does not govern how much realty brokers can charge their customers. But it does govern how brokers and agents disclose their compensation to consumers. Commissions may be quoted “using a flat fee, a percentage of the sales price, or a combination” of the two. However, Kanovsky warned that if the total charges “exceed the amount of the commission for listing and selling the home that are reflected in the real estate broker’s or agent’s listing agreement,” then HUD has the legal power to review the extra charge “to determine whether additional services were provided” to justify the add-on.
UrbanTurf spoke with a few agents who said that they usually cover the fees, which range from about $200 to $400, for their clients. If you have had experience with these fees, please let us know in the comments section.
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This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/kenneth_harney_looks_at_controversial_real_estate_fees/1898.
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