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
Latin term meaning legal capacity to act on behalf of oneself. ...
Main street having a divider either in the center or between the curb and sidewalk with trees, grass, or other shrubbery. ...
Threat of violence to obtain a contract. ...
The label American Land Title Association, also known as ALTA, is a trade association that helps in managing the title insurance industry. Another focus of ALTA is the abstract of title of ...
An oral will made by a testator/testatrix just prior to death before an insufficient number of witnesses. Nuncupative wills depend on the oral testimony of those witnesses present as proof. ...
Functional utility in real estate typically defines a property’s usefulness to the homeowner or lessee. The more purposes it can fulfill, the better. For instance, you can call a ...
Passageway providing public access from a building interior to an exit. Long interior passageway providing access to rooms. ...
Worth of the property part which is left subsequent to a condemnation action. ...
Marketing attractive space at the appropriate location at a good time in the correct square footage at a reasonable price or rental charge. An example is the renting out of space for retail ...
Have a question or comment?
We're here to help.