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No Administrative Fees at Closing
Learn About Real Estate Market - No Administrative Fees at Closing
Administrative fees tacked onto settlement charges violate a federal real estate settlement statutory ban against “unearned” fees, a U.S. District Court Judge in Birmingham, Ala., ruled recently.
The case involved RealtySouth, a unit of HomeServices of America Inc., the second-largest realty firm in the U.S. A buyer sued the company over a $149 administrative brokerage commission. The court found no evidence that the brokerage company performed any services beyond those covered by the commission and thus, violated the federal statutory ban.
The case achieved class-action status, and the class could include as many as 30,000 home buyers. But this ruling doesn’t necessarily settle the issue for good, as other federal courts have interpreted the statutory language differently.
To avoid getting caught in similar disputes, Laurie Janik of the NATIONAL ASSOCIATION OF REALTORS® says brokers may want to consider using a flat-fee-plus-commission compensation structure that is disclosed to all clients upfront.
Hipotecas Prestamos May 12, 2009 06:27 PM