What would you do in this situation? Pay the fee or not?

Question

My wife holds her a real estate license and is in referral status, which means we get a nice little kickback from each property that we buy/sell.  My realtor has recently moved to a new company and we were loyal and followed her so long as we were still able to get the 6% commission and the aforementioned kickback once we moved my wife's license to the agency.

I just received a request from her that we begin paying a $206 "Agreement & Disclosure Fee charged to her at each closing.  We buy and sell several properties each year.  Most of the properties we buy are off market, but we sell them all through her.

I don't WANT to be greedy and say 'no, we won't pay that fee at each closing.  That's part of the job.', but I don't want to be foolish and just hand out money at every turn.  Again, I have been loyal and plan to continue to be loyal where it makes sense (ie, same market).

What would you do?

Enrique Huerta · Answer

Realtors often pass through expenses like Transaction Coordination fees, Disclosure fees, Administrative fees, etc. They are the "cost of doing business" at certain brokerages. She made the change to a new brokerage, hence she should pay the fee. It wasn't your decision to increase her overhead, it was hers.

I would push back, especially if you do provide multiple deals a year to her.

Just my 2 cents.

Jay Hinrichs · Answer

well 200 bucks is a cost of a decent dinner for you your wife and your real estate team..  although I don't like these fee's the bigger brokers are putting in these deals.. i closed one yesterday in Orlando and made them remove the 195.00 transaction fee.. i don't mind paying full commish .. and then i saw the buyer paid a 495.00 fee .. so they paid it I made them remove it from the HUD.  I don;t think is bad form to push back on this.. but don't burn a bridge if you have a great team

Chad Swinford · Answer

I like the Chris Voss reference, @Jack Medford.  Yes, I have read that. Thanks for the reminder.

My wife gets a 1/4% of our agent's commission, which is nice (that it's a %).  The last house we sold was for $200k, and she received a $1,400 days later.Thanks for your opinion on this.

Jack Medford · Answer

How much does your wife receive as the referral agent for each deal? Is it a cut of the overall commission or a flat fee?

If you are constantly bringing deals to the same agent, I don't see why you should agree to an additional fee. Especially if services and the overall agreement has not changed. It could be something her new brokerage is pressuring her to add.

It seems, from the way you laid it out, that the other agent is the one being greedy, not you. I would try to get more clarity from the other agent, and find out why exactly she is adding this fee after so many deals together. Even try hitting her with some of Chris Voss' techniques like "How am I supposed to do that?" **If you don't know what I'm talking about, check out the book Never Split The Difference. I highly recommend it. At the very least, listen to the podcast number 260.**

Theresa Harris · Answer

@Chad Swinford As others said it could be her new brokerage has different rules.  Ask her if it changes her commission.  If it does, it may affect the 0.25% that your wife gets as well.  Otherwise look at it from a $ amount comparing the new fee to the actual $ amount your wife gets per transaction.

Kelly Iannone · Answer

@Chad Swinford sounds like this should be considered the cost of doing business with her new brokerage. Perhaps she gets a higher split of her commission but has more a la carte fees. I’d be inclined to push back given moving agencies was her choice and you use her on both sides of the deal.

Russell Brazil · Answer

You might end up shooting yourself in the foot, because you might not find another agent that will give you the referral fee back. I dont pay referral fees when I represent other agents, nor do I ask for one back when other agents represent me.

Jack B. · Answer

So about a 14.7% cut for them based on that example sale if you had paid this fee then. That seems a bit high to me. If it was something like $206 when you  are making 10K in kick backs, I'd go for it. This, I'm not so sure.

I guess it depends. Do other places charge a fee and is it as high? If so, then I'd go for it, otherwise you are just leaving money on the table to avoid the fee.

Chad Swinford · Answer

I am certainly on the positive side, @Matthew Paul.  But I want to stay there as much as possible :)I also want to make sure I maintain a good, healthy relationship with my team members and be generous with them, but not where it isn't necessary. LOL

Jack Medford · Answer

My pleasure @Chad Swinford. I hope everything works out in your favor.

What would you do in this situation? Pay the fee or not?

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