I am talking to a buyer agent who (1) wants 1500 retainer thats refundable at the end of sale, 1/2% of total

Asked by Theresa, Young, AZ Tue Feb 10, 2009

sale, and half of the brokers commission. He also said his total should be 10,000, I make up the difference. on a 250,000 purchase, I can end up paying quite a bit. I'm in PA, is this too high?

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13
Renee Porsia, Agent, Newtown, PA
Tue Feb 10, 2009
Hi Theresa,

If you decide to hire this buyer agent, and that is his fee then that is between you and him. Buyer agents can charge whatever they want to charge and as long as it's disclosed and written into the buyer broker agreement along with a start date and an ending date of the contract, then it is perfectly fine.

Traditionally, buyer agents usually get paid out of the fee for service at settlement. Can a buyer agent ask a buyer to make up the difference if a home owner is only offering out a 2.5% commission and the buyer agent usually gets paid 3% commission? Yes. Most buyer agents do not ask their clients to make up the difference though.

Do I think that this agent is being unreasonable? Yes. I do not know all of the facts though.

What do you know about this agent? Is this agent the agent for you? What type of experience does this agent have? These are questions you need to ask of the agent. If you feel that this is the best agent for you and who will fight for your rights no matter what, then perhaps his fee is worth it.

Please feel free to read my blog. I write a lot about buyer agency and you may find it helpful. http://www.reneeporsia.com

I do not charge my clients any up front fees. That is my personal policy.

I am a huge advocate of buyer agency. You should definitely hire a buyer agent no matter what.

I'd love to answer any questions you may still have. Feel free to email me.

Renee Porsia
Associate Broker
RE/MAX ACTION REALTY
(215) 669-0589 Direct
(215) 358-1100 Office Ask For Renee
http://www.reneeporsia.com
1 vote
Voices Member, , Benton County, OR
Tue Feb 10, 2009
Theresa, Let's not beat around the bush. The way the Market is and the number of good agents available if you take the time to look means my non-pro advice is this. Lose this agents number and get yourself an agent not suffering from insanity.

Good luck, Dunes
1 vote
Gita Bantwal, Agent, Jamison, PA
Sat Feb 14, 2009
Hi Theresa, If you have not signed with an agent you have time to interview other agents. I am an accredited buyers representative and hold the ABR designation . Visit my web site http://www.gitabantwal.com and read the testimonials. I will gladly give you references. I do not sign an exclusive contract for 30 days . I get paid at settlement which means I do not get paid if I do not help you find a home. and I get paid by the seller's agent from the commission the agent receives from seller. I will give you the option to cancel the contract if you are not satisfied .Call me any time 215-2758491 cell or 2153438200x124 or direct 2153438206
Web Reference:  http://www.gitabantwal.com
0 votes
Edmund Choi, Agent, Paoli, PA
Thu Feb 12, 2009
The beauty of capitalism is that you have choice. Move on.

Good hunting!
Web Reference:  http://MainLineandBeyond.com
0 votes
Jeremy S. Hi…, , Cherry Hill, NJ
Tue Feb 10, 2009
Theresa,

I recently did a promotion when I offered up to a $1000 rebate in the form of a gift card. Giving an incentive to test drive my services seems reasonable to me. Having a win-win situation seems best to me. I don't see the win for you in this situation.

So what happens if you do not find a home that suits your needs? What if by chance the agent does not live up to your expectations? I can say this is the first time I have heard of such. This scenario is highly unusual. If it is that you are a out ot town buyer maybe someone is trying to capitalize over your lack of familiarity with local customs. You've heard the voices of other Pros. Having a buyer pay a retainer maybe legal but is not customary practice.

Best Regards,

Jeremy S. Hill, Realtor Associate, Mortgage Consultant
Keller Williams Realty, Aurora Financial Group, Inc.
http://www.YourPhillyHomeSearch.com
http://www.SouthNewJerseyHomes.com
Office: 856.685.1651
Direct: 609.876.5817
Fax: 609.482.8235
Licensed PA, NJ
"Your Interest 1st Always"
0 votes
Mission Viejo…, , Mission Viejo, CA
Tue Feb 10, 2009
Theresa,
Most agents don't ask buyers to pay but we do ask that you sign a buyers agent form. That just states that if you buy a house you use them to do the deal for you or you will owe them commission. Tell the agent that you want to get to know them first and meet with them ,if possible a couple of time. Once you feel good with the agent then you could sign the buyers agent form.
0 votes
Carol Cei, Agent, Maple Glen, PA
Tue Feb 10, 2009
Hello, Theresa,

It appears that your agent is afraid of losing you so he/she has to tie you down by taking your money. Shame, shame! If your agent were confident that he/she could do a good job for you and earn your respect and loyalty, there would be any talk of retainers.

When I work with a buyer, the first 30 days with a non-exculsive buyer agency contract. I don't want anyone feeling like they are stuck with me. And...I don't want to work with people who are not going to be serious about their home search. At the end of 30 days, we have a chat about how we would like to move forward and then we modify the agency agreement so it works for all of us - but no $$$$$$ prior to closing. At that time, I typically accept what the seller is paying.

If this sounds interesting to you, why don't you reach out to me and we can have a more in-depth conversation about your plans.

Good luck with your home search!

Carol Murray Cei
ReMax Millennium
215-643-9661
carolcei@remax.net
0 votes
Chris & Step…, Agent, Philadelphia, PA
Tue Feb 10, 2009
Theresa,

Wow! So in general he is asking for a $10,000 commission on each transaction no matter what. That is a great business plan but does is work for you the consumer?

If you bought a $100,000 home and the commission was 3% to your buyers agent then his commission would be $3,000. Add the 1/2% he will charge you on the $100,000 which is another $500, totaling $3,500 to your buyer agent. You'd owe him $6,500 or $5,000 since he has your $1,500 refundable retainer fee. (I think I did my math right)

On a $250,000 home you'd have to let him keep the retaianer fee to meet your agreed upon commission structure.

Perhaps what he was subtly telling you was that he is a buyer agent for higher-end homes. That is great for him. Perhaps you will be better matched with a Realtor who sells homes for a more conventional commission.

As a Buyer you really have more important things to worry about than your agent's commission. Our suggestion is to keep your heart and mind focused on what you need to do which is: 1) get qualified to buy, 2) find one agent you like and trust and go shopping for homes, and 3) start packing because it will just be a matter of time before you find a great home !

I love this question because it shows that Realtors and Consumers have choices. God Bless America !
0 votes
Dallas Texas, Agent, Dallas, TN
Tue Feb 10, 2009
WOW, I would search for another buyers agent. However cant blame a realtor for a retainer. 99% of buyers agent obtain their full commissions are close. GREAT QUESTION
Web Reference:  http://www.lynn911.com
0 votes
Eric Funk, Agent, Morristown, NJ
Tue Feb 10, 2009
Unless this person is incredibly fabulous and is giving you something that you don't think that you can get elsewhere - shop around! Realtors generally are paid according to their broker split from the commission that is paid by the seller.
0 votes
Brian Douglas, , Philadelphia, PA
Tue Feb 10, 2009
While there are agents that charge a retainer, there are many that do not. I would suggest interviewing other buyer agents and making a decision based on the information you gather.

Brian Douglas - Realor, ABR, e-PRO
DiGennaro Real Estate
0 votes
Sheri Curci, Agent, Newtown, PA
Tue Feb 10, 2009
Hello Theresa,
We ( Sheri and I ) don’t take our clients money as a retainer. All we ask for is loyalty.... which is hard to find these days but there is a point in trust in one another and once that trust is developed than both Agent & Buyer (Client) feels comfortable in going forward in a business relationship.
Check out my testimonials on our site and you will see that trust is the key..... Not a retainer.
Well that's my opinion... hope that helps you.

Ask about a buyer’s agent contract that simply agrees to loyalty not retainers.


Thanks John & Sheri http://www.HomeCatch.com
Web Reference:  http://www.HomeCatch.com
0 votes
Barbara Silc…, Agent, Bensalem, PA
Tue Feb 10, 2009
Some buyer's agent will do that. I would find a new agent to represent you. He wants this so he can keep you as a client. The buyer's agent is paid a commission at settlement from the seller. Why tie up your money.
0 votes
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