Real estate company charging buyers a fee?!? (sales, costs, sell a house)

[Tish Thompson]

Originally Posted by jimj

You know, at first my hair stood on end and caught fire! No way was I going to pay a fee after just paying a ton of commission. Then I read all the posts and thought about it and IF it was credited back when I bought I really wouldn't have a problem with it.
Home Depot and Lowes do the same thing when you want to buy cabinets,flooring,doors etc from them and they design or measure your house. This is for the same reasons y'all are charging, it stops the people who just want something for nothing draining the company of time and money. Gas and cars aren't cheap and neither is time! I wouldn't like someone to come to me and have me spend hours designing a computer sysyem or figuring out their network problems only to have them say "thanks, maybe later" then going somewhere else or doing it themselves. No one blinks when attorneys charge retainers do they? Or when companies charge a fuel surcharge?
I just look at it as a deposit to show I'm serious and not likely to walk away.

Jim,

Hope you were able to get that hair extinguished!! LOL that is absolutely hilarious!

To repeat what Shelly said, I greatly appreciate you taking the time to understand the way some of us run our businesses. Gas IS expensive, and most clients want the agent to drive. At some point, we're going to get hungry, and I usually buy lunch for all of us. Lately, I've been fortunate enough to work with people who pay my retainer AND offer to buy food and gas everytime we go out. I don't allow them to do it...just making the offer means so much more to me than the money.

[TerryRiddle]

Originally Posted by christina0001

Using a real estate agent is not free. The cost is built into the purchase price and is at least several thousand dollars.

Before I agree with you I have to disagree with this. This statement is absolutely not true. To build in commissions you would have to be selling above market value and if there is a buyer out there today paying above market then please call me when you find them so we can educate them to the extent they are being swindled.

Now, on the jest of your post, you are absolutly correct. Never should a buyer have to pay a agent a retainer. There is no need to elaborate on this because it just should never happen. I have been burned by some of the same buyers but you learn and don't make the same mistake again. Having buyers is gold in this business and some of my buyer/investors buy two and three times a year in this market and as many as 5 to 10 properties each time. I cannot imagine their reaction if I asked for $200 to help them look for property.

There are plenty of good buyer reps out there; just ask the right questions and make sure you are getting someone who truly specializes in working with buyers.

Good luck!

[rwally]

Originally Posted by olecapt

RE is local..

In our market in Las Vegas you would eliminate virtually all of the larger Brokerages. An administrative fee is charged by the Brokerage. The Agents only choice is to pay the fee themselves...so pretty much universally they pass it on to the customer. I ask for it pretty much describing it as a Company "junk" fee though not using the word "junk". One client in 20 rejects it.

Originally Posted by olecapt
“I would buy "in some states". Many is too strong unless you wish to develop the statistic.”

So, do you wish to develop the statistic to substantiate your claim of "One client in 20 rejects it"?

[Michelle DeRepentigny]

jimj - you get it! Just as you choose the agent who represents you, we choose our business model and this is a choice many brokerages are moving towards. Our office does not currently charge a retainer fee, but there has been much discussion about this issue. If you are a serious buyer who is going to purchase in a reasonable time frame, why would this be a sticking point? Just make sure the agent your choose is credible and professional, so they get the job done, and you are not out anything!

[christina0001]

Originally Posted by TerryRiddle

Originally Posted by christina0001
Using a real estate agent is not free. The cost is built into the purchase price and is at least several thousand dollars.

Before I agree with you I have to disagree with this. This statement is absolutely not true. To build in commissions you would have to be selling above market value and if there is a buyer out there today paying above market then please call me when you find them so we can educate them to the extent they are being swindled.

Oh, this is such a pet peeve of mine.

Say I am a seller. Homes in my neighborhood of similar size and style are selling between $200,000 - $220,000. I want to have at least $200,000 in my pocket after selling. My agent is charging a 6% commission, half for himself and half of which will be paid out to the buyer's agent. Knowing that I have to shell out that commission, I know I cannot sell for less than appx. $213,000, so I end up netting my $200,000. However, in the imaginary world of free buyer's agents, I would only be paying out a 3% commission, and would be able and willing to sell for appx. $207,000. Regardless of who cuts the check, guess whose pocket the $6,000 difference really comes out of?

[JinMS]

Originally Posted by christina0001

Oh, this is such a pet peeve of mine.

Say I am a seller. Homes in my neighborhood of similar size and style are selling between $200,000 - $220,000. I want to have at least $200,000 in my pocket after selling. My agent is charging a 6% commission, half for himself and half of which will be paid out to the buyer's agent. Knowing that I have to shell out that commission, I know I cannot sell for less than appx. $213,000, so I end up netting my $200,000. However, in the imaginary world of free buyer's agents, I would only be paying out a 3% commission, and would be able and willing to sell for appx. $207,000. Regardless of who cuts the check, guess whose pocket the $6,000 difference really comes out of?

The Buyer, IMO.

[TerryRiddle]

Originally Posted by christina0001

Oh, this is such a pet peeve of mine.

Say I am a seller. Homes in my neighborhood of similar size and style are selling between $200,000 - $220,000. I want to have at least $200,000 in my pocket after selling. My agent is charging a 6% commission, half for himself and half of which will be paid out to the buyer's agent. Knowing that I have to shell out that commission, I know I cannot sell for less than appx. $213,000, so I end up netting my $200,000. However, in the imaginary world of free buyer's agents, I would only be paying out a 3% commission, and would be able and willing to sell for appx. $207,000. Regardless of who cuts the check, guess whose pocket the $6,000 difference really comes out of?

I was on your side until the comment about imaginary world. Your original post was from a buyer's perspective not wanting to pay a retainer and now you don't want there to be any cost at all in the business transaction? I get that your example is elementary but if you are maxed out on the mortgage and having to net 90% in this market you will be real dissappointed. The buyer/investors I represent would be buying the same comp new from the builder down the street for 60 cents on the dollar against your 220k paying 132k and a 3% to me of $3960 and smile the entire time knowing I just put them in a 80k+ equity position.

There is cost involved in any business transaction and if you are opposed to the out of pocket cost in a real estate transaction then sell by owner and from the buyer's side represent yourself but please don't solicit the services of professionals and complain about the cost. You have a choice.

I still don't like the retainer fee but I earn every penny of a buyer's commission. I don't know how you are paid in life but don't talk to me about imaginary worlds until you own your company and get paid by "eating what you shoot".

Good luck

[magellan]

Originally Posted by christina0001

Oh, this is such a pet peeve of mine.

Say I am a seller. Homes in my neighborhood of similar size and style are selling between $200,000 - $220,000. I want to have at least $200,000 in my pocket after selling. My agent is charging a 6% commission, half for himself and half of which will be paid out to the buyer's agent. Knowing that I have to shell out that commission, I know I cannot sell for less than appx. $213,000, so I end up netting my $200,000. However, in the imaginary world of free buyer's agents, I would only be paying out a 3% commission, and would be able and willing to sell for appx. $207,000. Regardless of who cuts the check, guess whose pocket the $6,000 difference really comes out of?

A couple of things:

1) Just because you want to get $200,000, does not mean you are going to get it. You "net" what the market will let you gross minus costs.
2) You have to realize that selling your home is a business transaction. In business, they determine what the market says is "market price", and then they deduct costs and hopefully come out with a profit in the end. They don't figure out their costs, tack on the profit they want, and then hope to get that price. Paying a realtor to sell your home is the cost of doing business. If you don't want to pay it, then go it alone.

Saying that there is a hypothetical "free buyer's agent" is as silly as a business saying they wish there were hypothetical "free labor" to run their operations. If only we could employ slave labor, we'd be making a profit.

TerryRiddle, your situation sounds a bit different than most buyers agents. It sounds like you have a built up clientele of professional investors who buy multiple properties. Of course you wouldn't charge them an upfront fee. Most buyer agents deal with onesees twosees buyers who are very indecisive and don't always give you the straight up truth as to their motivations.

[MJinNC]

There is no arguing this point, it has been adressed sooo many times. The RE business has things just the way they want them and nothing is going to change, they will backstab, black list, steer do whatever to keep the minority models just that. the only bright spot for most of us is that we only have to deal with this business a few times in our life. So when those times come, you just have to take it like a man and get through with it. Hoping to have an offer this weekend, I cant wait to fork over that $30,000.00 commission, that sweat equity that I have put into my house, feels like paying the mob for protection.

[magellan]

Originally Posted by MJinNC

There is no arguing this point, it has been adressed sooo many times. The RE business has things just the way they want them and nothing is going to change, they will backstab, black list, steer do whatever to keep the minority models just that. the only bright spot for most of us is that we only have to deal with this business a few times in our life. So when those times come, you just have to take it like a man and get through with it. Hoping to have an offer this weekend, I cant wait to fork over that $30,000.00 commission, that sweat equity that I have put into my house, feels like paying the mob for protection.

So if you don't think the point should be argued anymore, why are you throwing insults and trying to get in the last word?

You're right. Some people will never change their perceptions of the world.