Comments on: Transaction Coordination Fees – The Ultimate Junk Fee

By: Marti Scott

Marti Scott — Tue, 18 Aug 2009 03:50:19 +0000

Hi,
Thought I would just mention that I have been a broker since 1990 and there are plenty of real estate agents that do not have any training or mentoring. Having a good TC on their side is a great way to keep your broker files in compliance. As a seasoned professional, I see “red flags” for the agent I am working for and for their client. I don’t give legal advice, however after closing hundreds an hundreds of files, I have a pretty good idea of what to look for.

As far as passing on the fees, if the banks are chewing into agents commissions, but want the paperwork to flow smoothing, a TC fee is not unlike a loan processing fee.

Definately worth the time and trouble!

Thank you!

By: Sterling

Sterling — Wed, 05 Nov 2008 22:30:24 +0000

I hear everyones opinions about transaction coordinators and the fees and how they are passed off to clients, although I do agree that passing off your fees to the client may be questionable TC’s truly serve a purpose for those who are the money makers in the industry. Agents(Top Producers) who spend more time and money marketing and being more productive are attracting more business into their front doors, these agents are the ones who do not have time to make phone calls and shuffle paper. Understand we are pushing towards 2009 who has time to sit and work on principalities because you want to physically touch and follow each transaction front to back. Its time to make money and i recognize that those who arent Top Producers have problems with paying the fees those who are Producers don’t complain. We have to remember although we are in this business to service our clients and to perform our fiduciary duties we are also in this to make money. These agents who are putting their time and efforts into shuffling paperwork are not using their full potential. So as a Business owner who is a third party TC company we pride ourselves in making sure your files meet DRE standards and we run a tight ship cause it is imparative that our customer and their clients are happy.

By: BawldGuy

BawldGuy — Mon, 03 Nov 2008 20:41:43 +0000

Moving along — and thanks for not hurting me.

By: Kris Berg

Kris Berg — Mon, 03 Nov 2008 20:20:42 +0000

Jeff (BawldGuy) – Fair enough. It’s hard to argue with reason, so I will amend my argument. Use a TC or don’t, but don’t delegate your responsibilities, and don’t charge the client. In doing so, aren’t you really charging them twice? (Rhetorical — Now move along to your other reading, mister. )

By: BawldGuy

BawldGuy — Mon, 03 Nov 2008 20:12:18 +0000

First, many thanks for the morning’s laugh. Sorry to be so late to the party, but I’m so far behind in my reading, it’s pathetic.

Since TC’s came into being, maybe 15 years ago, I’ve paid for maybe a handful of them, clients the remainder. They pay me for my expertise, not paper shuffling.

Both your approach and mine are legit.

We do business in several states, which necessitates the use of a TC more often than not. Our clients gladly pay, as we’re totally transparent about it. Of course, we still take ultimate responsibility for paperwork being correct and on time. Toward that end we demand close and constant feedback in real time from our various coordinators. I’ve had this policy before we left San Diego as a viable investment market — a decade before at least.

Our question to clients is this:

Do you want us spending time sweeping the sidewalk, or building your retirement? Take your time, no rush.

In the last 15+ years in which the TC as been the rule, I’ve yet to have a paperwork problem that either couldn’t be dealt with quickly, or that wouldn’t have arisen if I’d been doing it myself.

Frankly, I believe the real difference between us, is that I can delegate, where you prefer to retain control. Again, both approaches are legit from where I stand.

Seems to me, my accountant shouldn’t factor in the bookkeeper he hired to do the lower pay work, so he could do the high level work I hired him to do in the first place. Or, how ’bout lawyers and their paralegals? The bottom line is, we all have our way of doing things, and the free market, without exception, will tell us what it thinks.

Our clients use us for our expertise, and they view the TC fee as a cost of doing business. They also appreciate the countless annual hours it frees up for me to be spending time on what matters most to them.

So there.

By: Bob Wilson

Bob Wilson — Wed, 29 Oct 2008 12:15:28 +0000

TC? New one on me. We always track our own deals and keep due dates on target. I thought that was what my job is….. Seems to me too many agents think they are too important to work for their clients.

By: Steve Berg

Steve Berg — Tue, 28 Oct 2008 03:50:42 +0000

Phil – Agreed. But even if an agent is using a TC, it is still incumbant upon them to manage the transaction. It remains our job to chase, understand and manage the disclosures, the inspections, the request for repairs, the title reports, the contingency removal, the status of the loan, etc. Too many agents are getting their clients signatures on the purchase contract and are rarely to be seen again, while the poor TC gets blamed for the inevitable screw-ups and delays that occur as a result of the agents lack of attention and participation.

By: Phil Hoover

Phil Hoover — Tue, 28 Oct 2008 03:28:28 +0000

I doubt that there are very many agents so busy in our current market that they lack the time to do their own paperwork and escrow coordination.
It’s mostly a crutch for agents who lack the organizational skills to coordinate their own transactions.
I agree with Steve ~ if you’re doing 100 deals/year, you need one.
If you’re doing a dozen or two dozen deals a year (or less), you should be organized enough to set up your own files and coordinate your own paperwork.
From a legal liability standpoint, it’s best for the agent to personally supervise the transaction vs. entrusting it to someone else.

By: Steve Berg

Steve Berg — Mon, 27 Oct 2008 22:47:57 +0000

Josh – I completely agree with you. When I read this I sent Kris to her corner for a time out. Now that she has had time to think about it I believe she agrees with us and is remorseful. There is a solid place in the real estate process for TC’s. Many are excellent. We have made the decision to take care of these responsibilities ourselves primarily because we are Type A people. Of course, if we were handling 100 transactions a year I can guaranty we would have a TC. Having said that, we also agree that it’s a travesty that agents pass these fees through to the client. We’ve never done it and never will.

By: Josh Sparner

Josh Sparner — Mon, 27 Oct 2008 22:24:46 +0000

What a crock… because you had the wrong TC you tend to pick on all in of us in general? There are those of us out there who are quite good, very responsible and well worthe the money for what we do. On another note: Agents should be paying the TC fee. Why anyone would pass this on to their seller or buyer is beyond me. Don’t the seller and buyer have enough costs to pay?