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
Active photoelectric cell made of silicon and activated by electromagnetic energy in the form of light waves. They are now used in a wide range of electronic systems including ...
Form of lighting designed to have 90% to 100% of the emitted light directed upward so the principal illumination is reflected rather than direct. Indirect lighting is designed to have less ...
Pipe fitting shaped like the letter U permitting an intersecting pipe to be directed around another pipe. Plumbing connection between two water pipes in the same system. Passageway ...
A partition or wall that provides no support to the structure in which it is located. For example, a nonbearing partition or wall does not support any floors above it. A partition which ...
Work required as a court judgment because of a crime committed. ...
Agreement in which the contract price to build something is equal to the total costs incurred plus a predetermined profit. The profit may be based on a percentage of cost (e.g., 20% of ...
Clause in a percentage lease permitting the landlord to cancel a lease and recover the property if the tenant's sales fall below a specified level. Clause in a lease permitting the ...
Under law, a warranty in effect even if not expressly stated. It provides that real property sold is warranted to be appropriate for sale and is in proper condition even if not stated, ...
Measures looking at the past, current a future direction of the economy. They may have an impact on the real estate market. Each month government bodies, including the Federal Reserve ...
Have a question or comment?
We're here to help.