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Are you being overcharged - Real estate tips

Written by Posted On Tuesday, 26 September 2017 16:05

Ethics means many different things to different people.  Almost 20 years ago I was in the mortgage business.  Back in those days there were some real dirt bag mortgage loan officers.  They would pile on the junk fees and sell the client the highest rate possible.  I msyself never understood how they slept at night gouging the people the way they did.  They would use the line to explain themselves....."I have to feed my family".  Those guys were robbers just acting like a mortgage loan officer.  There are nothing ethical in my mind about it.  I always operate "treat people like you would want to be treated"  It is the same way with some fees in our industry.  I think I will make a few real estate agents upset with this blog. 

Many times prospective buyers and sellers do not know which real estate agent to chose. If you do not know an agent personally or get a referral it is tricky to find the right agent.   I am going to show you one way of finding out if the agent is right for you.  I want to ask you a few questions first to find out where your mind frame is.

1.)  Do you want to pay more than you have to when buying or selling a home?

2.)  Do you want to pay a real estate agent more because they decided to add a fee on to the transaction (Some fee that you really do not undersand) ?

3.)  Do you think it is ethical for the agent to add additional charges onto the transaction and blame it on their company?

I believe you  will answer "NO" to all these questions.   Let me explain.   In the real estate business brokers of the companies instituted a "transaction fee".  It may come under a "transaction coordination fee" or "document storage fee".   The fee comes with many explanations such as "costs incurred to store documents",  but the real estate company is covering overhead costs with transaction fees.  I do not know of any metro Detroit real estate company that does not charge a "transaction fee".  It varies from company to company.  I have seen them as low as $150 to $495.  I am not getting into transaction fee as a whole.  We will leave that for another day.

My question to you is would you knowingly hire a realtor that adds on an additional $100, $200, or $250 onto their companies tranaction fee so they can pocket the additional money?  Do you think that is fair to you?  Do you want to pay more than necessary?  Real estate agents do not have to disclose that they added more money onto their company's transaction fee.  I myself call that gouging the customer.  Some realtors feel that is no big deal for you to pay extra, so the real estate agent can cover marketing expenses or to take more money home.

Do you feel the real estate commission is a fair amount of pay?  I myself think the agent that adds extra money into the transaction fee on is taking advantage of the client.  It is no different than hiring a title company that has higher fees but offers the real estate agent a kickback.  (Yes, this goes on too.  They have figured out how to skirt the law.)   These agents figure that you do not know what the real estate companies fees are, so what's another $100 or $200 out of your pocket.

So if an agent will do that to you up front do you think they really have your best interests at heart or are they in it simply for the money?  So when choosing an agent go over the fees and then call the company's office and find out what the true fees are.  See if there is a difference between the companies transaction fee and the agent's transaction fee.  This will take an extra phone call, but it may be up to extra $2000 to you.  Picking a reputable agent is important.          

I hope this real estate tips helps you hire a real estate agent that will really look out for your best interest.  One that is not looking to put an extra $100 in their pocket and take it out of yours.  It doesn't matter whether you are buying an Lakefront home for sale in Oakland County MI or in a home in Novi......  being charged extra is never fun.  Hire a realtor that is honest and ethical.  One that is not going to nickel and dime you.

 

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Russ Ravary

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