Who should pay a $450 transaction coordinator fee, the buyer or the agent?

Question

Take a buyer under contract on a 4 unit whose agent mentions in passing that her transaction coordinator charges $450 and that it will appear on the closing statement. Most buyers assume the coordinator is part of what the commission already covers, the agent's paperwork done faster by someone else. Then they read that a transaction coordinator is engaged by the broker, and the buyer is never the coordinator's client. At that point the fee stops making sense. If the coordinator serves the brokerage, why is the buyer the one paying? There is also the question of whether $450 is a normal figure or a fee that gets tacked on because nobody usually questions it. Nobody sensible fights over $450 on a purchase of this size. The useful questions are what the buyer is actually paying for and whether declining the fee is something people do in practice.

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 piece worth nailing down is the line item itself. On a settlement statement, a $450 charge under a vendor name you have never heard of will sit beside 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 cannot tell you, that is a different problem from the $450.

angela_burke · Answer

Many teams absorb the coordinator fee inside the team split. Take a shop paying $425 a file: it comes off the top before anyone on the team gets paid and never touches the client's statement. That is partly a compliance decision and partly because nobody wants to spend a closing explaining a fee that is really an operations cost on the brokerage side. That is a choice, though, and no rule requires it. Plenty of shops pass it through, disclose it, and that is fine. What deserves pushback is learning about it after going under contract, @brandonlee36. That belongs in the conversation before anything is signed.

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

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

derekj19 · Answer

@tonyv88 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

@nataliehsu it varies, which is why the earlier reply said to ask where it is authorized in the agreement you already signed. @brandonlee36 the question worth asking is what happens if you decline. You almost certainly can. The practical issue is whether the file then gets run by an agent who is used to handing it off and now has to track your dates herself. Paying $450 for someone whose whole job is the calendar is usually the better trade. The savings is small next to 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 should pay a $450 transaction coordinator fee, the buyer or the agent?

10 replies