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
(1) The exposed trim and molding surrounding a door or window. (2) Woodwork which encases a pipe or structural member. (3) Method of creating a form for the pouring of concrete. ...
Similar property. Comparing like property. properties that are side by side but do not meet. They are in the same direction with a constant distance. ...
Transfer of personal property via a will as a gift to the recipient. ...
The concept of a release can define various meanings in the financial and real estate business. Typically, it establishes a discharge or literal escape from a loan borrower's economic ...
A reduction in structural value from all reasons except physical failure. For example, a commercial building having an outdated elevator or electrical wiring system is experiencing ...
In a broader sense, Full Disclosure means presenting all information (significant or not, classified or not) related to a certain matter. In Real Estate, the term “Full ...
Plywood whose surface is given parallel scratches or grooves in the manufacturing process. It provides, increased bond to adhesives, mortar, plaster, or stucco as well as giving a grain ...
Expenditures incurred to initially purchase property, including incidental costs necessary to put the property into existing use and location. This cost is then depreciated over the assets ...
A proposal to buy property at a specified price. The seller of the property has the options of accepting the offer, rejecting it, or making a counteroffer. For example, John signs a listing ...
Have a question or comment?
We're here to help.