Company Tries Charging House-Hunting Fee to Buyers
Koenig & Strey Real Living in Chicago started this week to charge potential home buyers a house-hunting fee for working with a real estate agent. The fees are common in some areas of the country and similar fee policies have been adopted by other HomeServices of America Inc. companies recently. But the fees are far less common in other areas, like in Chicago, and competitors are watching closely to see how the extra fees are embraced by home buyers.
"Agents invest a lot of time and money working with buyers and sellers and frequently don't get paid at all," notes one real estate agent.
The fee would be to help formalize the agent’s relationship with home buyers and ensure the agent gets compensated for the time spent in the search process, in case a transaction falls through or the buyer ends up abandoning their search altogether.
The upfront house-hunting retainer, for which the amount will be set by the agent, will be paid by the consumer. If the buyer ends up purchasing a home, the retainer will be returned to the home buyer as a credit at closing.
"If it's embraced, it's a great idea," Michael Golden, co-founder of @properties, commented to the Chicago Tribune about Koenig & Strey’s fee. "One of two things happens: Either it's like Bank of America charging a fee for an ATM, or everyone embraces it, and they're leading the way for a new fee. My guess is it's not going to go that way."
Koenig & Strey operates 17 offices in the Chicago area and has about 860 real estate professionals.
Comment
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Comment by Isabel Elsesser on April 15, 2012 at 6:19pm
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Yes! It is a good idea for all of us at the same time start charging upfront fees.
If only some do and the rest don't that will not help the new and diffentely needed change!
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Comment by Barbara B. Ruge on April 9, 2012 at 1:27pm -
Well, I think we already are. Except fees for services are a business decision one must make for their own business. Regional differences may influence what you need to charge. Picture traveling over mountains or to farm lands, etc. actual expenses could be higher than the typical suburban metros. My association, Greater Fort Lauderdale Realtors has a Buyer Broker Contract that's pretty simple to fill. Check with your local and state associations.
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Comment by Kathleen Koulouris on April 9, 2012 at 1:07pm -
Thanks for the explanation. I will refrain. How can we share our ideas, though, on working with buyers?
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Comment by Barbara B. Ruge on April 9, 2012 at 1:03pm
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The Anti-Trust laws exist because way back when, large industries would get together and decide what they would charge consumers, "price-fixing", and create a monopoly. There was no competition and the consumer was essentially held captive by that industry, whether it be electronics sales, real estate sales, banking services, insurance, airline fares, telephone service, you name it. Remember when Ma Bell was Ma Bell? Not any more; it was broken up. Companies, consumer choices, and competition now exist. Believe me, any industry participants who get together and discuss/decide/suggest a fee/charge for their services are in violation.
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Comment by Kathleen Koulouris on April 9, 2012 at 12:36pm
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Thanks for the info. I really don't understand, that by discussing any fee or amount of, we would be in violation. Can you please explain?
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Comment by Barbara B. Ruge on April 9, 2012 at 12:27pm
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wow, at the beginning of this discussion there were several proud agents very opposed to this idea. However, it appears that the proponents are coming out in force. Please be advised that any mention of actual fees, concurrance, and/or discussion of fee amounts, is called price fixing and in violation of Federal Anti-Trust laws, so please stop talking money.
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Comment by Kathleen Koulouris on April 8, 2012 at 11:56am
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I think $50.00 a home may be high. I think any number may work. As soon as they start parting with some money, they will buy a lot quicker.
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Comment by Larisa Kontur on April 8, 2012 at 11:53am -
$ 5.00 only? How about $ 50.00 ! This way we will know for sure if they're serious or just there to waste our time....I had a buyer once ...I showed him 18 apartments...at the end he did buy from me...I was lucky then..what if he didn't? This way I would've at least made $ 900.00 ! Guaranteed.
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Comment by Kathleen Koulouris on April 8, 2012 at 11:26am
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I love working with buyers, but I am also tired of working for freee. I think, also, that we should charge for each home we show. This will make buyers be more select in the homes they see. Sometimes buyers do not listen to my advise and still want to see a home that I know is not priced right, or has another flaw. All of this costs us time and money.
Let's charge a buyer's fee, refundable at settlement, and a $5.00 fee for each home we show our clients.
I think if we do that buyer's will listen to us more and be more discerning in the homes they want to see.
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Comment by Gayon Clarke on April 7, 2012 at 7:18pm -
It's long overdue fee. Everyone understand time is money and we are the only ones who don't! We do all the upfront work and expenditure, yet attorney are retained just to oversee the signing of the contract. This fee is more than justified for hardworking committed buyers agent. I have been fortunate to have buyers that voluntarily offer me gratuity for my time.
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