DON’T PAY IT!
The Broker Administrative Commission (or whatever the broker decides to call it) – STRIKE IT from your contract. But you’ll need to read the fine print to find it.
These Broker Administrative junk fees have been around for a long time and have been criticized as junk fees since their inception. Over the years brokers have made up all sorts of reasons to try and rationalize this unnecessary and exhorbitant fee. Tell your broker that you’d rather buy a new piece of furniture – then thank him for going to all the trouble to bury this fee in the fine print.
When you hire a real estate broker to buy or sell your house, you are typically required to sign some sort of representation agreement. If you’re a buyer, this agreement is typically a called a Buyer Representation Agreement, and if you’re a seller it’s usually called a Listing Contract. Both of these contracts typically have this very expensive junk fee somewhere. Find it and strike it.
If your broker refuses to negotiate this term, that’s fine – there are a lot of brokers to choose from. If they wait until late in the transaction to present this form, that’s their problem not yours. In most states, they can’t sue you for a commission unless they have this agreement signed by you (do check your state laws on this).
In the below example, this fee was added into a so-called standard Realtor form. These forms can be and should be NEGOTIATED.