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
A tender has several meanings in everyday discourse. Most generally, tender means a formal offer designed for acceptance with the anticipation of soliciting a response in return. Bidding ...
An idiomatic expression indicating the desire of an individual to understand new surroundings and all of its nuances including its quality and character. The derivation of the expression ...
The endorser stipulates something such as that the transferee cannot use the funds for six months. ...
A rectangular area bordered on all sides by buildings. Often, a quadrangle is grassy with decorative landscaping. A quadrangle can be found in a central business district or on the site ...
Member of a partnership whose liability for partnership debts is limited to the amount invested in the partnership. A limited partner is prohibited from taking active part in the management ...
Possession and use of a property estate by virtue of a lease. There are four types of leasehold estates: estate for years, periodic tenancy, tenancy at will, and tenant at sufferance. ...
A triangular shaped end of a building where a double sloped roof meets at the top of the triangle. A gable begins at the eaves of a roof and terminates at the roof ridge. ...
An agreement, debt, or low which can be operationalized, fulfilled, completed, or performed. ...
Voluntary giving up of a right of a lien, usually on a temporary basis. The waiver may be explicitly stated or implied. An example is when a lender waives its right of lien against ...
Have a question or comment?
We're here to help.