Unfortunately, real estate folks should not be answering this type of question in an open forum with specifics due to anti-trust laws.

Each brokerage has their own policies.

Talk to your friends who have bought to obtain names of agents who have delivered good service. Then interview these agents and find out their specific policies so you can make a decision you are comfortable with. Always remember - more times than not, you get what you pay for.

Gee, you get back the $295 at closing, whats the big deal??? It is a great way to enforce loyalty on a consumer that may want to use different agents to look at houses and then bring in a cousin from out of area. I do a lot of listings and every week I have disloyal buyers trying to buy a listing without representation and cut out the buyer side commission. As a buyer agent I like the idea but have a hard time putting it into practice. Why should we as licensee's count on getting lucky that the one house we show you is the one you will write an offer on, if in fact you will utilize that same agent to write it up? In practice it makes sense to put that in the buyer agency agreement and then agree to waive it on a case by case basis.

BTW, this is not a commission discussion, it is an activity fee discussion that is only not reimbursed by the agent if the buyer buys outside the buyer agency agreement. So dont get the high and mighty saying this should be off limits when it is not tied the transaction unless it is waived.

GA Buyer,

I didn't address the actual buyer's agreement in my earlier answer, but I guess I should since it looks like you are still asking about the agreement. Legally, in GA, if a Realtor uses the GAR contract they must have a Buyer's Brokerage Agreement Signed in order to legally represent the buyer. That's why there are two boxes that can be checked for the representation of a buyer, "is representing" or "is not representing". If "is representing" is marked, there has to be a signed buyer's brokerage agreement. If "is not representing" is marked then the buyer's information has to be completed within the contract with an email address or fax number so that the buyer can receive all the notices in writing.

With that said, it sounds like you are seeing a copy of the GAR Buyer's Brokerage agreement. There is a blank for retainer fee. Since Realtors are independent contractor's, we can charge retainer fees if we so choose as long as it is disclosed and all parties are in agreeance, but just because the retainer field is there doesn't mean that there has to be a retainer fee. In our case, we mark $0. We maintain that in a "normal" real estate transaction, there is really no good reason to charge a retainer fee to a buyer. It would be nice to make more money, but it just doesn't seem right (sorry to all those of you that do).

I hope this helps! Good luck!

Melissa Stephens
The Stephens & Stephens Group
Better Homes and Gardens Real Estate Metro Brokers
404-843-2500 Office
678-776-1895 Cell http://www.StephensandStephens.net - Website

Comment on our blog: http://www.TheScoopinRealEstate.com

I gave out three thumbs up - Scott Askew is always our voice of reason here, and he is 100% correct - each broker operates differently, their profit models are different and some make their clients pay up front fees.

I also like Mike and Hank's answers - they've both seen a lot, and their answers reveal that there is always more than one way to skin a cat...

"Reasonable" is incredibly subjective to define, don't you agree Gabuyer?

What are your reasons for asking the question?

Have you been asked to pay a Retainer Fee? How much?

What has been your experience with real estate agents in the past?

As far as I'm concerned, I balance these numbers in the context of probability and price point. Someone shows up a the office and says write a contract now, I'd do it for a flat fee. If my team would have to show 50 houses to a potential buyer on a chance they might pick one of them, then 3% of the sale may not be enough.

Of course the overall price point of the home plays a huge part in my decision too. After all, 8% sounds like a good commission until you find out the client wants a $12,000 house in a run-down neighborhood. Conversely, a 1.5% commission sounds bad until you realize it is a $3,000,000 warehouse.

Real Estate Brokers are one of the only professionals to perform a multitude of tasks on the Chance that they may get paid. The only others are attorneys who when they win the big case, they get upwards of 30-40%.

All that being said: If you do not trust the agent (that has supplied this agreement to you) enough to sign it; You may want to consider another Buyer's Agent.

Buyers don't typically pay for representation so there's not much to negotiate. I've never heard of a buyer retainer fee, at least I don't charge that. As for a term, could be a day long or a year long - or anything between.

The answer is that it's fully customizable depending on what buyer and broker agree to. They can also be cancelled at any time with writtn notice.

The single most important thing is to properly qualitry and scrutinize the agent that you'll work with. Done correctly you should have no reservations signing an agreement. http://hounddogrealestate.com/2010/10/14/questions-real-esta…

Hank

I'll answer this from two unique point of views, as a current buyer AND as someone who is currently taking the pre-license class at GIRE.

Because I do not yet have my license, I had to find an Agent myself, and I used HomeGain to do so. I picked someone with a very impressive resume, my husband and I met with him, and out of the blue he asks for a $295 retainer fee. I was very hesitant because I had never heard of this before, and even in talking with friends and family who have all been thru this home buying process many times before, NONE of them had ever heard of this either. I'm also a "no bs" kind of gal, and ALWAYS operate in full disclosure, so I was dumbfounded that this "retainer fee" information wasn't included in his HomeGain presentation, anywhere on his personal site, or his brokers site. Being blindsided by an additional fee, when you're already "fee'd" to death in the purchase of a home, didn't sit well with me, and looking back I FULLY regret doing business with this guy or ever giving him a retainer fee!

Needless to say, his impressive resume and continuous rhetoric of "I got my client the deal of a lifetime in Decatur.... a house listed for $120,000 for $30,000..." got to me so I went ahead and paid that $295 retainer fee (which I will get back at closing).

As a first time buyer, I now wish I would have listened to everyone around me. The only thing that you should have to sign is a buyer/brokerage agreement, which states that whomever your Realtor or Sales Person is, exclusively represents you! This protects their commission, and rightfully so. They are putting you in their car, wasting their gas money and their time, so it's the least we can all do as buyers, and I know once I have my license, I will certainly ask all buyers to sign one for me.

Simply do not use an agent who requests an up front retainer fee. But be prepared to sign the buyer/agent agreement, but remember too that if you get a few days or weeks into knowing your Realtor and you don't like the person professionally, you can cancel that agreement at any time without any penalty, you simply just go your separate ways. Now if you sign the agreement AND give the retainer fee, you will be out that retainer fee.

I do understand why some of these agents want to use a retainer fee, if they've ever been "burned" - but really, don't be shocked when you start losing business because of it. Because of what I have been thru, and it's a long story, I actually find it to be quite unprofessional to even ask for money up front. The first question out of my mouth before agreeing to meet with a broker to discuss coming on board with them will be about the retainer fee... if I speak to any of you and you tell me you have a retainer fee, expect to be hung up on!

And to Scott who points out you get what you pay for, you certainly do... AT CLOSING! =) There is a thing called "cost of doing business" - If you as a Realtor/Sales Person do your due diligence up front on a buyer (make sure they have all their documents in order for the loan to be closed, make sure they are dealing with a legit lender, make sure you speak directly with their loan officer, make sure they are approved etc.) then you should have enough confidence that the loan will close. And yes, I'm sure there are still deals that do fall apart, but that is the cost of doing business, AND if you have great agents with great attitudes, great sales techniques and who provide excellent customer service, if the deal doesn't close, that buyer should call your agency the second they get their ducks in a row and WANT to do business with you once they actually can, not to mention referrals that will be sent your way just because you were so awesome!

Retainer fees: YUCK... DON'T DO IT!

Thumbs up to the answer from Melissa, and thanks for your response, Gabuyer.

My broker does not charge an up front fee and I do not install a protected period when I strike an agreement with a buyer or a seller in writing.

Some may find that to be a little less than rigid, but hey, lets compare sales numbers...

I operate without a lot fear that some buyer "client" is going to screw me over...pre-qualification of a ready, willing and able buyer is a matter of common sense, most of the time...

This is actually one issue I wish we had a common front on. Why should we not talk about it, if the GAR allows and we discuss it "as waived" in all our presentations? I don't mean to enforce it as mandatory, but it could be part of the norm of real estate transactions. I am sure this will go a long way correcting some of the abuses of our professionals we see quite often. We can let buyers write off as their expense for taking 2 or more agents around metro Atlanta for 20 homes and not buy 1. It is just reality.
But we all chicken out "I waive it..." for all the reasons.
Then, if A, C, D are waiving, out of the goodness of their heart, who is B to charge a fee and not lose clients?

I am still thinking...

Thank you for your responses, very helpful.

Lee -

["Reasonable" is incredibly subjective to define, don't you agree Gabuyer?] By reasonable I was just looking for a ballpark range other buyers may have experienced as I have not previously dealt with a retainer fee.

[What are your reasons for asking the question?" ] It's one of the line items on what I thought was a standard GAR Exclusive Buyer Agreement. Since some responders haven't heard of a retainer fee maybe what I have isn't a standard agreement or is old. May end up being a non-issue, just trying to be prepared for what to expect.

[Have you been asked to pay a Retainer Fee? How much?] Not yet. I was made aware that a recommended broker requires a buyer's agreement and wanted to research what that entailed so I wouldn't be surprised at our meeting - I found a GAR agreement online and saw the Retainer Fee line item. I have no problem signing an agreement - I get it. Don't love the idea of a retainer fee (I'm a legit buyer and didn't want to be on the hook if someone is wasting my time), but would do for the right broker.

[What has been your experience with real estate agents in the past?] No buyer's agreements

GaBuyer,

We choose not to charge a retainer fee. Sellers almost always pay the commission in GA to both their listing agent and the buyer's agent. We're not saying all Realtors who charge retainer fees are bad, but we choose not to. We're just that confident in our service level. We don't get paid until we're at the closing table. Need some help?

Melissa Stephens
The Stephens & Stephens Group
Better Homes and Gardens Real Estate Metro Brokers
404-843-2500 Office
678-776-1895 Cell http://www.StephensandStephens.net - Website

Comment on our blog: http://www.TheScoopinRealEstate.com

It will depend on the buyer's agent, the fee may be waived or it can be rebated upon a purchase. I offer plans that would limit your cost depending on your plans in searching for real estate. I would be glad to speak with you and find a way to accomplish your real estate goals, with a limited to no fee at all. Contact me anytime.

Gabuyer,
Many agents I know have gone to a retainer fee to represent buyers, I am one of them. The purpose of it is mainly to recoup some of the cost of spending time and gas money driving a buyer around if a sale is never consummated. In my case, if there actually is a sale and a commission is earned, 100% of retainer fee collected up front is refunded to the buyer at closing.
Each brokerage is permitted to set whatever fees or commission structure they seem fit to support their individual business plan. What is a reasonable fee is for you and your agent to come to an agreement on.

Congratulations, you understand the need to have a buyer's agent. The seller pays all of the buyers agents commission at closing unless you have agreed to pay a higher rate. Retainer fees are unusual unless you are in the market for a very low priced property or rental.

Regarding what a reasonable fee is, here are some considerations.
1. Do you want a licensed real estate agent, or do you want a Realtor® who not only meets the minimum requirements to sell real estate, but who is also is trained in and held to the highest ethical standards.
2. Do you want your agent to be legally obligated to represent your interests?
3. How much authority do you want your agent to exercise on your behalf?
4. What level of service do you expect.
5. Do you want an agent who will ensure that your home inspection, attorney review, and assemblage and submittal of closing documents goes smoothly, just to name a few, or do you want all the responsibility?

Give careful consideration to these questions, then interview a few real estate agents to decide who will deliver the the service you expect as the price you are comfortable with. Call me at 404-425-4945 if you would like to discuss this further.

The term’s that you agree to. Most agents do not charge a fee to represent you; they make a % of the sales price according to what is ever in the listing agreement. Some agents do not require you to sign a buyers agency agreement and some do. Under Georgia Real Estate Law all agreements, to be binding, must be in writing and signed by all parties. Find someone that you are comfortable with and work with them. If you do not sign a contract and look at properties with more than one agent, and that agent finds you a property, then use him to buy the property. Anything else would be un-ethical.

Are you renting or buying. That will make a difference. 60 to 90 days is the norm. Retainer fees are more and more the norm.

Most reputable agents will not lock you into a long term, you may cancel the agreement at any time by providing written notice, but 3 months is about standard. As far as a fee goes, I have seen some charge an upfront fee in exchange for a rebate upon successfully closing a sale with you. Again, not that common. This tactic is done to generate loyalty....I prefer to show good service to gain loyalty with my customer however.

As Mr. Godzyk stated, most brokers don't charge retainers. By all means ask what they will give you for the money. Hold them to what they propose to do for the money. Terms very from 30-90 days. No agent can quote another agents fee. They usually have fees structured toward their service but, be sure. Consult more than one Agent to compare as well! Good Luck and Happy Hunting!

Tye

Most terms range from 3-6 months depending on your situation. Unless you have an unusual circumstance I would not pay a retainer fee. Hope this helps.



Best Regards,

Frank Brockway
Brockway Real Estate Consulting
Keller Williams - In Town Atlanta
Tel: (404) 787-2253 | Fax: (404) 974-2616
Email: frankbrockway@kw.com http://www.frankbrockway.com

Commission is always negotiable, most buyer brokers do not charge a retainer although some do. No realtor will be able to quote an exact commission online as it is against federal law. You can however ask individual agents what they charge and most important what you get for what you pay so you can compare them. Good luck with your purchase.