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Christopher Rucks
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Normal to pay a brokerage service fee of $500?

Posted Nov 11 2022, 04:57

Hey friends. I'm an NYC-based investor working on investing in the Philly market. I'm building my team in the area. An agent I've been working with said that her brokerage charges a $500 fee if I go under contract for a property. My mentor said that doesn't sound right and sounds like double-dipping. Any thoughts here?

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Charles Carillo
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Charles Carillo
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Replied Nov 11 2022, 06:11

@Christopher Rucks

I agree with your mentor. Unless they are providing additional services; they should only be compensated when you close.

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Michael Dumler
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Michael Dumler
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Replied Nov 11 2022, 06:19

@Christopher Rucks, I've heard of some brokerages requiring a retainer fee but it's usually unorthodox. Unless the brokerage is indeed going above and beyond in finding you a home run deal, the upfront charge is unnecessary. FYI stuff like this can be negotiated. I would have a conversation with your agent and their broker regarding the validity of the fee. Hope this helps! 

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Eliott Elias#2 All Forums Contributor
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Eliott Elias#2 All Forums Contributor
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Replied Nov 11 2022, 06:40

They should only get paid when you close, there are usually transaction fees

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Ron H.
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Ron H.
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Replied Nov 11 2022, 08:03

I've gone through 3 different transactions in three different cities where the agent tried to slide in garbage fees into the contract, insisting they were normal.  They are not. I have always said strike the fee or else bye bye.  They have always deleted the fee with words trying to make you feel guilty.

I recently advised on a transaction where the agent insisted on a higher than normal percent for the very hot market in addition to additional broker fees.  Agent removed the fees but 3 out of the 4 owners refused to insist on lowering the percent charged due to agent making them feel guilty about it.  Agent did no marketing to help sell property other than mls listing.  Multiple over list price no contingency offers the first weekend. Accepted offer was from same broker so he cleaned up on the transaction regardless.

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Russell Brazil
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Russell Brazil
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ModeratorReplied Nov 11 2022, 08:22

Pretty common. In my market they range from $300 to $700. We charge our clients $395 per transaction. We also charge a minimum gross commission, so om a cheap property our buyers and sellers are also paying that minimum.

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Caleb Brown
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Caleb Brown
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Replied Nov 11 2022, 08:27

It is common. I was with Remax and they charged a broker fee when you closed, it goes to the broker not the agent. I am with eXp and they charge a broker fee too. If the agent "waived it" then he would have to take a $500 hit to his commission. If the agent is awesome and will be able to get you deals along with making the process smooth then pay the $500. 

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Ash Hegde
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Ash Hegde
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Replied Nov 11 2022, 08:29

@Russell Brazil do you charge that at closing or when you go under contract? I think the timing is the issue here more than the fee itself. 

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Russell Brazil
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Russell Brazil
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ModeratorReplied Nov 11 2022, 09:05
Quote from @Ash Hegde:

@Russell Brazil do you charge that at closing or when you go under contract? I think the timing is the issue here more than the fee itself. 


 We charge it at closing.

However with out of state investors we collect a retainer fee up front. We do this to weed the time wasters.

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Patrick Britton
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Patrick Britton
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Replied Nov 11 2022, 11:21
Quote from @Russell Brazil:
Quote from @Ash Hegde:

@Russell Brazil do you charge that at closing or when you go under contract? I think the timing is the issue here more than the fee itself. 


 We charge it at closing.

However with out of state investors we collect a retainer fee up front. We do this to weed the time wasters.


Totally!  i've wasted tons of my life on deadbeats if i could have made some money or deterred others from wasting my time, i should have thought of it!  LOL

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Bob Stevens#3 Rehabbing & House Flipping Contributor
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Bob Stevens#3 Rehabbing & House Flipping Contributor
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Replied Nov 11 2022, 11:35
Quote from @Christopher Rucks:

Hey friends. I'm an NYC-based investor working on investing in the Philly market. I'm building my team in the area. An agent I've been working with said that her brokerage charges a $500 fee if I go under contract for a property. My mentor said that doesn't sound right and sounds like double-dipping. Any thoughts here?w

Why are you using, and agent is my 1st question, 2nd is why Philly ? 


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Erik Estrada
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Erik Estrada
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Replied Nov 11 2022, 11:50
Quote from @Russell Brazil:
Quote from @Ash Hegde:

@Russell Brazil do you charge that at closing or when you go under contract? I think the timing is the issue here more than the fee itself. 


 We charge it at closing.

However with out of state investors we collect a retainer fee up front. We do this to weed the time wasters.


 Smart haha

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Ray Johnson
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Ray Johnson
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Replied Nov 12 2022, 00:49

@Christopher Rucks Yes this happens. In my experiences, I've always said no. If you appear to be a committed investor and running a business, the agents will not charge you because the better option is the long-term business relationship.

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Christopher Rucks
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Replied Nov 12 2022, 06:22
Quote from @Ray Johnson:

@Christopher Rucks Yes this happens. In my experiences, I've always said no. If you appear to be a committed investor and running a business, the agents will not charge you because the better option is the long-term business relationship.


Got it. Thanks for the insight, Ray. The relationship is brand new and I haven't bought anything yet, so wondering if I should push back or just roll with it for the first time. 

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Christopher Rucks
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Replied Nov 12 2022, 06:27
Quote from @Bob Stevens:
Quote from @Christopher Rucks:

Hey friends. I'm an NYC-based investor working on investing in the Philly market. I'm building my team in the area. An agent I've been working with said that her brokerage charges a $500 fee if I go under contract for a property. My mentor said that doesn't sound right and sounds like double-dipping. Any thoughts here?w

Why are you using, and agent is my 1st question, 2nd is why Philly ? 



Hey Bob. I'm not local and I'm short on time, so opportunities from MLS and someone who knows the area is the best option for me. As far as Philly, it's one of the closest affordable markets in the NYC area. I also have family in south jersey, so I can get someone there if I need to.

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Bob Stevens#3 Rehabbing & House Flipping Contributor
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Bob Stevens#3 Rehabbing & House Flipping Contributor
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Replied Nov 12 2022, 06:33
Quote from @Christopher Rucks:
Quote from @Bob Stevens:
Quote from @Christopher Rucks:

Hey friends. I'm an NYC-based investor working on investing in the Philly market. I'm building my team in the area. An agent I've been working with said that her brokerage charges a $500 fee if I go under contract for a property. My mentor said that doesn't sound right and sounds like double-dipping. Any thoughts here?w

Why are you using, and agent is my 1st question, 2nd is why Philly ? 



Hey Bob. I'm not local and I'm short on time, so opportunities from MLS and someone who knows the area is the best option for me. As far as Philly, it's one of the closest affordable markets in the NYC area. I also have family in south jersey, so I can get someone there if I need to.


 Agents are not where the deals are, go to the local RE forums, you will get much more success 

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Basit Siddiqi
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Basit Siddiqi
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Replied Nov 12 2022, 09:59

Everything is negotiable.

You can reach out to her and request that she forgo the fee or ask her to reduce it and see what she says.

Is she a good agent? maybe paying her a fee on top of what she will receive from the seller will be worth it.

I normally see a fee request from the agent is low-cost markets to help compensate them for their time/work.
Philadelphia, from my perspective, does not appear to be a lost cost market where an additional fee of $500 would be considered normal.

Best of luck

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Christopher Rucks
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Replied Nov 13 2022, 13:04
Quote from @Basit Siddiqi:

Everything is negotiable.

You can reach out to her and request that she forgo the fee or ask her to reduce it and see what she says.

Is she a good agent? maybe paying her a fee on top of what she will receive from the seller will be worth it.

I normally see a fee request from the agent is low-cost markets to help compensate them for their time/work.
Philadelphia, from my perspective, does not appear to be a lost cost market where an additional fee of $500 would be considered normal.

Best of luck


 Great feedback. Thanks, Basit

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Christopher Rucks
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Replied Nov 13 2022, 13:04
Quote from @Bob Stevens:
Quote from @Christopher Rucks:
Quote from @Bob Stevens:
Quote from @Christopher Rucks:

Hey friends. I'm an NYC-based investor working on investing in the Philly market. I'm building my team in the area. An agent I've been working with said that her brokerage charges a $500 fee if I go under contract for a property. My mentor said that doesn't sound right and sounds like double-dipping. Any thoughts here?w

Why are you using, and agent is my 1st question, 2nd is why Philly ? 



Hey Bob. I'm not local and I'm short on time, so opportunities from MLS and someone who knows the area is the best option for me. As far as Philly, it's one of the closest affordable markets in the NYC area. I also have family in south jersey, so I can get someone there if I need to.


 Agents are not where the deals are, go to the local RE forums, you will get much more success 

Got it, thanks for sharing Bob!

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Stephen Kennedy
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Stephen Kennedy
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Replied Nov 14 2022, 08:14

Not normal, you are working with the wrong agent my friend. Would love to assist though! DM if youd like to discuss futher!

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Matt Szablowski
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Replied Dec 7 2022, 11:41
Quote from @Russell Brazil:
Quote from @Ash Hegde:

@Russell Brazil do you charge that at closing or when you go under contract? I think the timing is the issue here more than the fee itself. 


 We charge it at closing.

However with out of state investors we collect a retainer fee up front. We do this to weed the time wasters.

What is the amount for a common retainer fee ?

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Russell Brazil
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Russell Brazil
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ModeratorReplied Dec 7 2022, 12:33
Quote from @Matt Szablowski:
Quote from @Russell Brazil:
Quote from @Ash Hegde:

@Russell Brazil do you charge that at closing or when you go under contract? I think the timing is the issue here more than the fee itself. 


 We charge it at closing.

However with out of state investors we collect a retainer fee up front. We do this to weed the time wasters.

What is the amount for a common retainer fee ?
We retain $5k for Baltimore and $10k for DC. 

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Sara Frank
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Sara Frank
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Replied Dec 8 2022, 11:10

We charge $395 brokerage fee for buyers and sellers at closing. This covers record keeping etc, doesnt go to the agents. Sometimes there is a retainer for out of state clients and then in 2023 were introducing minimum commission for purchases under a certain price but thats a group policy not brokerage wide 

Real Estate Agent District of Columbia (#SP40001442) and Maryland (#5009910)

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Billy Daniel
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Billy Daniel
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Replied Dec 8 2022, 11:27

Ask the agent to explain why they are charging that fee.  It may be an upfront fee that would be credited to the commissions at closing.  It sounds odd to me, but not entirely shady.  If you don't like it, get another agent!  I have no problem with agents charging fees for their services as long as those fees are earned....

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Lucky Henderson
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Lucky Henderson
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Replied Dec 12 2022, 08:56

Each brokerage is different. I pay the brokerage fee myself as the agent, my investors don't pay that. I'd find out the ins and outs of how they do their transactions. Keep in mind each state is different also and NY has some specific regulations in different industries.