Buyers Agent....fee? - Posted by JD

Posted by phil fernandez on October 27, 2000 at 19:14:17:

Hi JD,

Welcome aboard. This is the best site on the net for real estate investing. How do I know. I’ve been here for four years.

Now to your question. I do not understand the $175 fee. Doesn’t your broker get a commission if you buy the property. I have never heard of this $175 fee. You mention the fee is for his trouble. Perhaps you should charge him a $175 fee for your trouble.

Getting back to your story. If you are planning to live in one side of the duplex, I think that’s great. Where else can you buy a property and have your tenant pay for you living in the other unit. Been preaching this for years.

Just make sure you review all of your numbers, taxes, utilities, rubbish, lawn care and up here snow removal plus a management fee and reservers for replacement. If the deal still makes sense to you go for it.

Buyers Agent…fee? - Posted by JD

Posted by JD on October 27, 2000 at 16:12:08:

Hello folks,
First off just want to say how great this forum is and how much a appreciate all the knowledge I am gaining from this site.

I am fairly new to REI, but have been doing tons of reading and feel like I have a good grasp of what I need to know to get started. I have decided to start with a duplex, basically so I can stop paying rent and have a part of the mortgage paid by renters.

My question is this…Is it normal for a buyers agent to charge a Non-Refundable Retainer Fee of $175. This seems a bit high condsidering he will get paid when I purchase a home. I understand that he is trying to cover his butt for all the work he will do if I finally decide not to purchase a home with him, but I can’t find info anywhere to legitimize this fee.

Being new to REI, I thought it would be benificial to have someone to show me the ropes at bit. This agent comes highly recommended. He is exrememly knowledgable in all aspects, including creative financing. Not only that but he is a structural engineer, so I figure he is a good person to have along on the initial walk throughs.

Just looking for opinions.

Thanks in Advance,

Re: Buyers Agent…fee? - Posted by Ed S.

Posted by Ed S. on October 28, 2000 at 20:47:08:

I sounds like that agent is trying to creatively cover his own rear end in much the same way others in REI do theirs. That’s fair.

But if he’s the only one on the block that does this, either he is the best at what he does, or he’s trying to gouge you.

But if he is good enough to require a retainer, that also implies that you could neither do better nor do anything at all elsewhere/elsewise. If, by chance, you are able to do so, he should then not claim any commission for work undone, for indeed under those terms a commission is undeserved.


THANKS - Posted by JD

Posted by JD on October 27, 2000 at 21:44:55:

You all just reassured what I thought I already knew. Thanks! I will make sure any retainer, if he insists on one, is credited toward the commission. First impressions are that he is good, so I will try and work a deal here…


Re: Buyers Agent…fee? - Posted by Tom

Posted by Tom on October 27, 2000 at 20:52:18:

As was stated below some would like to bind you to them. What if you don’t like the agent? Go find an agent you like that will do the job for you and take his commission at the end of the deal. NO DEAL:NO PAY.
Having said that be fair, if you like the agent, don’t jack him around, buy though him/her, but DON’T pay a retainer.

Re: Buyers Agent…fee? - Posted by dewCO

Posted by dewCO on October 27, 2000 at 20:21:04:

Bob H has the best answer. It may be the custom where you are, or it may be this agent or company is trying to start their own custom. If you don’t like it, find another one who doesn’t charge. But if you’ve “tried the agent out” and like 'em as long as the $175 is going to be credited to you in the end, it shouldn’t be a big deal. But nonrefundable and you haven’t even worked with them, it’s still a gamble. There are tons of duds out there.

Retainer - Posted by Bob H

Posted by Bob H on October 27, 2000 at 20:10:51:

There should be a provision in the Buyer Agency Agreement that covers retainers. In my state (CO), a retainer is optional, non-refundable, and usually credited against the broker’s commission. Many brokers advocate the use of retainers as a means to gauge the motivation and sincerity of a buyer. $175 seems more than reasonable to me.

Re: Buyers Agent…fee? - Posted by Jim (Alaska)

Posted by Jim (Alaska) on October 27, 2000 at 20:05:20:


No, this is not normal for a buyers agent. One of the features that they promote is the fact that if you go to them, you pay no fee, because they collect their fee from the seller. This agent may be good, but personally I would not pay a fee like this when there are so many buyers agents that charge no fee.

Just remember, any Realtor wants to sell the property and collect a commission, no one will inspect as well as you yourself will, with your interest at heart.

I bought my duplex the same way you are buying yours, with a buyers agent, and even though I know her well, I did all the inspection and baragining myself. Having someone pay most of the mortgage payment is an excellent way to get started. Just be careful of your numbers and your actual costs, it is easy to talk yourself into a place because you want it for yourself.

Good luck,