Broker Admin Fee


There is no such thing as a “broker admin fee”  the fee still exists but laws changed and the fee was renamed.  The broker admin fee was a kind of non-specific junk fee.   The name was changed to ‘broker commission” a few years ago. 

The broker commission fee is charged by most brokerages to the buyer and the seller.  They run from about $200 to $500 dollars here in Minnesota.  

Here are some things that buyers and sellers are not told about the fee.  For one thing according to the Minnesota attorney generals office all commissions are negotiable.  That little extra fee is called a commission and is therefore negotiable.  Try negotiating for a lower rate.  

Most brokerages will make the agents pay the fee if the buyer or seller does not pay it.   Which is why most agents do what they can to make sure that the fee is collected from the buyers and sellers at the closing. 

Agents who find the fee missing from their checks because their clients did not pay it should make sure that they actually signed something agreeing to pay the fee. 

The contract with the buyer or seller is with the brokerage and any commissions are payable to the brokerage or broker not to the agent.  The only entity who can pay the agent is the broker and since the fee is owed to the brokerage not the agent the agent doesn’t  have any way to collect it.  We are independent contractors not employees and our contract with the buyers and sellers plainly states that the money is owed to the brokerage not the agent.  

Buyers and sellers should ask about the brokerage commission. In most cases it pays for overhead and administration.  The brokerage also gets up to half of the agents commission.  Some brokerages also charge agents an extra fee each time they have a real estate transaction.

I am not picking on the brokerages.  Those fees help keep them profitable and we are all in business to make a profit.  Our incomes and profits are tied to the price of housing which has gone down. 

Also see:  How do real estate agents get paid. 

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