What are they?
Admin fees are charged to buyers and sellers at closing. They vary from $150 to probably $700. These fees are charged in addition to any commission that is being collected. What is this fee? It’s just a fee to fatten up the broker’s or agent’s bottom line. The broker usually sets the policy of what the fee is going to be and they charge the agent after closing is completed. The agent extends this fee to his/her clients and that’s how you end up paying it. If the agents waves the fee for the buyer/seller – the broker will deduct it from the agent’s commission after closing. There has been a lot of noise about this and the legality of charging a fee for not performing any additional services. Brokers found ways around it by making it a part of the commission.
Do you have to pay them?
You don’t have to pay the admin fee if you didn’t agree to do it in writing ahead of time. Check your buyer agency or listing agreement and see if the fee is a part of the agreement. If you signed on the dotted line – you owe the admin fee in addition to the commission.
Luckily my company Keller Williams in Arlington does not charge me or my clients an admin fee. We as agents can charge clients an additional fee, but I feel that this business is a commission business and we should keep it at that. So no admin fees if you work with me.
The above info is from my experience only. I don’t judge anyone’s business model and there are some great real estate companies charging admin fees – so you be your own judge. If you get to work with an amazing agent who finds you a house of your dreams – an admin fee might not even be relevant. In any situation – personally I HATE these fees – and I used to charge them when I was with a different company. What do you think about this?