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Brokerage fees cover the costs of a broker's involvement in the transaction (for the seller's broker, listing and marketing the property; for the buyer's broker
by bdhess 8y ago
Brokerage fees cover the costs of a broker's involvement in the transaction (for the seller's broker, listing and marketing the property; for the buyer's broker, finding and showing properties; for both brokers, "event managing" the transaction toward resolution). Points on the loan is money paid to the bank in exchange for a reduction in the interest rate over the life of the loan.
Both of those are different things than paying money to the government just for the privilege of consummating the transaction.
- lisper 8y agoIf I'm a seller, it doesn't matter to me one whit whether the money that I don't get ends up in the pocket of the bank or the broker or the government. I really don't care whether you call this lost money a tax or a commission or points. All I care about is that it's money that the seller was willing to pay that someone else gets to keep and not me.
- bdhess 8y agoCommissions are negotiable (it is even possible to complete a real estate transaction without a broker; i.e. 0% commission). And sellers don't pay points.