Learn How To Start Investing In Real Estate
Learn How To Start Investing In Real Estate

How to Deal with Realtor ‘Admin Fees’

Written by Than Merrill

Should you fire your Realtor over their admin fees or is this a great opportunity to build loyalty?

The real estate investing community has been increasingly complaining about ‘admin fees’ being snuck into the paperwork after a deal to buy a home through an agent is struck. So what can you and should you do about it?

Obviously real estate agents do need to fully disclose everything, but in most cases this is a legitimate fee.

Of course for those real estate investing pros that can’t stomach them, it can normally be negotiated down or out, even if it has to come out of the agent’s commission. In fact savvy real estate investing veterans that still do work with Realtors normally negotiate a reduced rate anyway.

But pause for a second before you pick up the phone and start threatening that agent…

Remember that you need great partners in this business, partners that will go the extra mile for you day in and day out. You shouldn’t ever overpay for services but if you’re buying dirt cheap HUD homes many agents barely walk away with a few hundred dollars in their pocket after commission splits and taxes, not to mention expenses.

Most wouldn’t get out of bed for that. Would you do the deal only to make $1,000? Probably not. So shouldn’t they be compensated reasonably for doing a good job?

Next time they might not take your offers. There are plenty of other investors willing to buy those homes and real estate agents have long been notorious for holding out for higher pay checks. If this is your first deal with a Realtor or brokerage make sure you ask about all fees upfront and weigh the pros and cons before smashing them. If you plan to do many deals a month and give the agent the sell side too, then negotiate a special deal based on volume or take your business to one that will.

Have you run into these fees, do you think they are fair or do you refuse to pay them?