Who pays the $450 TC fee, me or my agent?

Question

Under contract on a 4-unit and my agent mentioned in passing that her transaction coordinator charges $450 and it'll show up on my closing statement. I had assumed a coordinator was just part of what the commission covers, like her doing paperwork herself but faster.

Then I went looking and read that a transaction coordinator works for the broker, not the buyer. If that's true I don't understand why I'd be the one paying for it. And I don't know whether $450 is normal or whether it's a fee that got tacked on because nobody usually questions it.

I'm not trying to fight over $450 on a purchase this size. I'd just like to know what I'm actually buying and whether declining is a thing people do.

Rena Guide · Accepted Answer

A transaction coordinator is hired by the agent or the brokerage to manage the file from contract to close. They track deadlines, collect and route disclosures, chase the documents each party owes, and keep the title company, lender, and both agents talking. Their client of record is the agent or the broker, which is the thing you read and it's accurate.

Who pays is a separate question from who the client is. Three arrangements are common. The agent pays the coordinator out of their own commission and you never see it. The brokerage employs a coordinator and absorbs the cost. Or the fee is passed to the buyer or seller as a disclosed charge, which is what your agent is describing. Whether that third one is permitted, and how it has to be disclosed, depends on your state and on the brokerage's own policy, and in a financed purchase the lender also has a say in what lands on the settlement statement. Ask your agent to point you to where in your signed representation agreement the fee is authorized.

$450 is inside the ordinary range for a third-party coordinator. It is not a fee the title company charges, and you'll pay the title or escrow company separately for their work.

One practical note: if the fee is on your closing statement, the coordinator is still working for the agent, and their instructions come from her. Paying the charge does not make you their client or give you a say in how the file is run. That mismatch is usually what bothers people more than the number does.

joe_delgado5 · Answer

It's negotiable like anything else in the contract. I've had it dropped by asking once, in writing, before signing.

luis_carrera · Answer

The part I'd want nailed down is the line item itself. On a settlement statement a $450 charge with a vendor name you've never heard of is going to sit there next to a dozen title fees and nobody will explain it at signing. Ask her now which line it appears on and who the payee is. If she can't tell you, that's a different problem than the $450.

angela_burke · Answer

We pay ours out of the team split. $425 a file, comes off the top before anyone gets paid, and it never touches the client's statement. Partly a compliance decision and partly because I don't want to spend a closing explaining a fee that's really an operations cost on our side.

That's a choice though, not a rule. Plenty of shops pass it through and disclose it and it's fine. What I'd push back on is finding out about it after you're under contract, @thicket. That should have been in the conversation before you signed anything.

tonyv88 · Answer

On a 4-unit ask whether the coordinator is collecting the estoppels and existing leases, because that's real work and often nobody owns it.

mikeoconnell7 · Answer

@cobalt when you took it off the client statement and onto the split, did you tell agents it was a raise in their cost or just absorb it at the team level without saying anything? I'm setting pricing for coordination work and the answer to "who feels the $425" seems to decide everything about how the service gets sold.

derekj19 · Answer

@trellis that's the bit I'd care about too. Someone has to email a property manager four times for lease copies and rent rolls, and on a small multifamily that's usually the difference between closing on time and not. If the $450 buys the person who makes those four emails happen, it's cheap. If it buys a deadline spreadsheet the agent already had, less so.

nataliehsu · Answer

So the fee can appear on the statement in some states and not others? That seems like something a buyer would never find out.

tylerbrooks9 · Answer

@plumb it varies, which is why the guide reply said ask where it's authorized in the agreement you already signed.

@thicket I'd want to know what happens if you decline. Not whether you can, but whether the file then gets run by an agent who is used to handing it off and now has to remember your dates herself. I'd rather pay $450 and have someone whose whole job is the calendar. The savings isn't worth a missed inspection deadline on a 4-unit.

jessreyes12 · Answer

I've read this whole thread and I'm still not sure who I'd complain to if the coordinator dropped a deadline on my file. I paid the $450 in that scenario, but they answer to the agent, and the agent answers to the broker. Does that mean my only move is the broker, or does it depend on whether the coordinator is an employee there or an outside contractor?

Who pays the $450 TC fee, me or my agent?

10 replies