We need to create some legislation that allows a buyer's agent to acquire a retainer, much like attorneys.....seriously!

It would be nice to get a retainer but unless every agent in your MLS do it, it is not going to work.  The reason it works for other profession is they banded together and they gain respect.  We don't do that so buyers take advantage of us.  FREE SERVICE, why not.  It is frustrating for me to work very hard with a buyer and later find out he bbought from another agent.

Why not charge a retainer now and have them sign a broker buyer agreement?

In my humble opinion, how can an agent ask for a retainer that can't even get an exclusive buyer agency contract signed. 

Granted I will admit there are times that I am disappointed with the lack of respect that some of my clients have shown, but generally speaking I would say that respect is something that is earned. Keep in mind that in many cases, we are not selling real estate, but selling the services that we each provide, as well as our expertise. 

Yes, indeed there are those agents that just open doors and hope to write an offer and collect a check. It boils done to selling yourself and what you have to offer to the client. 

Remember you, as an agent, have the choice to work with a buyer or seller...it is not a one way street. If you don't believe in your abilities, and respect yourself, how can you expect someone else to? 

Value added service, sell yourself first, the property sale will follow.

I agree with you that a shift towards retainers refunded at closing would be nice. Then buyers would have some skin in the game. It would weed out the looky-loos, that's for sure.  And we can do that now, though it's difficult since not many are practicing it.

Some of the comments that allude to agents not being good at their job if they don't make that "connection" with a buyer made me wonder.  No matter who you are, you will run into people every now and then who, no matter how nice, warm or caring you are, couldn't care less about you.  They just want to get into a house.  They don't care if you're missing your kid's game, they don't care if it's your birthday, they don't care if it's your day off, and they don't care if you're wasting your time, gas and energy trying to help them.  They know we'll work for free in hopes of a sale, and they take advantage.  I've decided that I won't work with buyers for a while because I'm burnt out on them(My fault in large part for being to chicken about using a BBA).  When I start again, ti will be with the BBA and maybe even the retainer.

Ralph,

I'm working noe on a pay-for-service plan. I'm tired of giving it all away for free. Timely post.

Good post and interesting arguments on both sides....  I think we do need to do something, but not sure what that answer might be..

I know it really isn't the same but when gas hit $4 I know a lot of people that would charge several hundred dollars to a buyer in advance of taking them out to show homes. It was credited at closing  when they purchased but at least they had some insurance.

Personally most of my clients are either referrals or past clients so I never really worry too much about it. I've usually built a pretty close relationship with most of my clients by the time I get them in the car.

I agree 100%. In fact this has been a recent blog topic lately stirring quite a range of emotion. As I understand, CA is the only state that prevents this practice.

Ralph:

I don't think we need to pass legislation to do this.  I have been taking a small retainer fee for years. It is written into my contract that I give it back to the client at closing. It is only $100 but that and the buyer agency agreement gives me more of a commitment from the buyer.  

There is not a law in MIchigan against this, if you want to go for it. Are you saying across the board? In every State and Office? Nope not in favor of that one.

I would prefer to stick withe the current commission model we already have. Doing work for leads that go nowhere, while irritating,  is part of the package.

Interesting idea, better yet are all the comments.  Rainers are so insightful.

Ralph, 

As with Richard, above, our Georgia BBA has a retainer fee built in (as does the listing agreement).  You can either charge one or not.  It's up to the agent with no RESPA implications.  For investors, I charge a retainer fee.  For tenant clients, I charge a retainer fee.  Once they go to closing or rent a property, the retainer is credited against the commission.  For the renters, the retainer fee is spelled out right on my website with the geographical limitations that I impose when working with prospective tenants. 

Simple.  And no, I haven't had a problem asking for and receiving the retainer.  For those agents who do not want to charge a retainer fee, that's their choice.  Everyone runs their business as they see fit within the parameters of the licensing law. 

Thanks for posting this topic, Ralph. It's created a lot of comments with varied perspectives on this subject... Very interesting reading.

It seems to me what you want to accomplish is to be paid for your time. That's certainly reasonable. But in a sales position where you're only rewarded via commission, the risk is high for not being paid. (Conversely, the reward should also be high to offset the risk.) To increase my odds of successfully closing a transaction (reducing risk and earning my reward), I interview the potential buyer to make sure that they're serious about buying (have their pre-approval letter, down payment, good credit, what their time frame to buy is, etc.) and are willing to commit to me. If I'm convinced that they're truly serious and are willing to commit to me, then I work with them. It doesn't guarantee that I'll get paid for my efforts, but I think it increases the likelihood that I will.

We know this varies from state to state.  In Anne Arundel County, Maryland, our standard REALTOR contract provides a blank for filling in a retainer amount.  In one of my previous companies, therefore, charging a retainer was a common practice - but my current company does not use the local Association listing form and the company form doesn't mention retainer. 

I so agree with YOU!    There are buyers (and sellers) that suck everything out, and still want more.    If they had to work for free until something happened, they would NOT do this!    GREAT POST!

Ralph ... Your suggestion that REALTORs get together and lobby at Sacramento or Washington DC for some new legislative protection for buyers agents is interesting.

While it's true that some of us have been dumped on by proposed buyers and not respected through the process, I believe there is still room for professional REALTORs to make a name for themselves, gain and keep respect, and move forward.

Buyers agents should ask each prospect to sign an agency disclosure AD-11 form in California almost at the beginning.  When more information and showings are requested, the buyers agent should have a heart-to-heart talk with the prospect about the REALTOR expectations involving loyalty.  When things get more demanding, the agent should ask prospects to sign a buyer broker representaton agreement. 

I don't like the current CAR form for broker broker agreement and probably suggest something easier to read that would get the same result.  If a prospect won't sign such an agreement, the REALTOR agent should move on and find better clients.

So you want legislation that dictates that agents should be paid a retainer. You want your pay set in legal cement? Do you want the amount legislated, also? Have you ever heard of the concept of Capitalism?

Dumb idea!