Service Fee
The definition of a service fee or brokers fee in real estate is a flat fee paid to a real estate agent or broker in addition to the commission for the sale or purchase. This is to cover the cost of several auxiliary services that the real estate agent or broker provides after the transaction has been completed between all parties.
The services provided vary but can include the procurance of title insurance, verifying that the title for the property is taken care of in a suitable manner, and other such matters. The fee usually reflects the cost that goes into resolving these matters, and as such is usually a fair charge for the completion of your transaction.
Example of a service fee in real estate
Sal is the owner of a very successful pizza parlor in the downtown area of his city. With hundreds of customers visiting daily to try his famous pizza recipe, Sal has managed to save a decent sum of money that he hopes to use to open another pizza restaurant at another location. After finding a suitable location and realtor, Sal is ready to go ahead with the purchase.
Sal goes ahead with inspecting the property to make sure it is suitable for his purposes and then happily agrees to close the deal and make the property his own. After some haggling on the price, the two parties settle on a mutually agreeable arrangement and go forward with the purchase. Papers are signed, and Sal is about to become the new owner.
Once all the necessary paperwork has been completed, the gross and net sales prices are calculated. In addition to the 5% commission charged by his real estate agent, Sal is informed that he must also pay his realtor an additional $400 service fee in order to ensure that everything is in order for the purchase.
Popular Real Estate Terms
The meaning of a guarantee covers a legal and financially-binding agreement signed between three parties involved in real estate or financial transactions. In this document, typically ...
Person or business that obtains mortgages for others by finding suitable lenders. The mortgage broker sometimes deals with collections and disbursements. Typically the mortgage broker ...
Unexpected increase in the price of property not due to any effort on the owner's part. An example is when the appraised value of a house increases because of a population increase in the ...
Same as term closing: legal process of transferring a piece of real estate to a buyer. Typically it occurs in the office of the lender, attorney, or an escrow company. ...
If escrow is the legal “moment” where assets are held by a third party (an escrow agent) hired by both the buyer and the seller of goods like real estate and insurance until the ...
Time it takes to drive to an outlying area form a major urban area. The driving time radius can radically affect real estate values in outlying areas of major metropolitan regions. Unless ...
Also called trust deed. A document that conveys title to a neutral third party during the period in which the mortgage loan is outstanding as collateral for a debt. ...
The direction in which a community is growing. Directional growth is measured over time, and its path strongly influences current and future market values of those properties clearly in ...
An adversary hearing allows both parties to an issue to present their views. A public procedure performed by an administrative or legislative body to investigate certain matters and ...
Have a question or comment?
We're here to help.