No Buyers Agreement Prior to Offer...Now Realtor Seeks Admin Fee

[Matt Schelberg]

A question for foreclosure buyers from a novice: how common is it for a buyer's agent to charge the buyer a flat "office admin fee" for a foreclosure that closes? (fee is in addition to 3% commission). Purchase price is 64k.

Background: I first met the buyers agent several months ago when he was a listing agent for a HUD property. Did not buy that property, but I liked the agent and so called him recently when I found a HUD home I wanted to bid on. I asked if he wanted to represent me for this one, and he agreed. We saw the property together and submitted a bid on the same day. (He has not been working for me previously or sending listings). He did not provide me with a copy of the buyers representation agreement prior to submitting the bid, and I did not think to ask for the paper copy. When we discussed commission verbally he only mentioned the standard 3% commission paid by the seller. The bid was accepted and then he provided me with a copy of the representation agreement, asking me to sign. It includes a flat $200 "office admin fee" to be paid by the buyer at closing.

1) Is this standard?
2) If not, how do you recommend I handle it now that the bid has been accepted?

Lesson learned on this one. Identify the commission structure in advance and on paper.

Thanks,
Matt

[Joel Owens]

This is probably mainly seen on small deals where not much money is to be made.

60k you are talking 1,800 at 3% before expenses. I can see a brokerage with overhead doing this.

The problem I have with brokerages is when they charge this stuff touting they do not make enough money. If you want to make more money learn how to work on larger deals and make yourself more valuable. Don't accept doing contracts in a certain price range and then secretly try to charge buyers and sellers junk fees to make up for it. That's the problem I have is the non-disclosure and how they go about it.