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
Street terminating at one end with only one outlet. A dead end street is not a through street. See also cul de sac. ...
A major factor in depreciation resulting from wear and tear from use and natural deterioration through interaction of weather elements may cause depreciation to a structure. ...
The net operating income definition is the total profit generated by a business or real estate development after the necessary operating expenses are taken out. In order to determine the ...
Legal abbreviation meaning with husband. ...
Evaluating a locality to determine its value and appropriateness for designated objectives. ...
Person or business that benefits from the work of another person or business. The recipient has not compensated the other party for this gain. In law, the one being enriched at the ...
Amount a manger of real estate receives for his efforts. For example, a manger is to receive 2% of rentals collected as compensation from the landlord to manage the property. If the ...
Span of time a rental agreement is free to the occupant. A landlord may offer this as an incentive to stimulate rentals. For example, an owner of an office building may provide a free ...
Relationship between individuals or entities whereby rights given to one are returned in kind to the other. An example is where one person has the right to use facilities of another with ...
Have a question or comment?
We're here to help.