Wednesday, February 20, 2013

Don't Pay Real Estate Processing Fees

As the value of homes decreased, the number of real estate agents charging buyers and sellers extra fees increased. In most cases, this is a total ripoff by greedy agents and brokers. Unless they are going above and beyond what is normally expected to earn a commission, don't pay them a dime extra. It is a disgraceful practice.

Mortgage companies legitimately charge a processing fee because there are usually reams of paperwork and hours of follow-up involved in obtaining a mortgage loan approval. In addition, it's the processor who may be speaking with the loan underwriter and even the applicant to resolve open issues.

This is not the case in real estate transactions. Some companies hire closing coordinators to make sure the process is a smooth one. However, there are usually very few benchmarks to track in a residential transaction. Deadlines to watch include home inspection, property appraisal, loan application and loan approval. Is that worth hundreds of dollars out of your pocket? Isn't that the job of the listing agent or her assistant? Why are you paying extra?

The one exception that comes to my mind is a short sale. The seller typically has no closing costs, so in those cases when the lender doesn't agree to pay for the seller's attorney or other fees, the buyer is asked to pay for it.

What do you think? If you are looking for a straight-shooting agent, send me an email at with the subject line "Help Me Find an Agent" and I will do my best to find you someone in your area who doesn't charge this nuisance fee.

If you're a real estate agent who doesn't charge a processing fee, send me an email at with the subject line "Available Agent", let me know the area you serve, and I will add you to my database of referral agents.

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