She/He Who Finds The First House We Like Gets The Commission

You answered Chris right on the money...  You can cut me loose... unless I have found the house.  But you need to give me a commitment, or I can't give a commitment to you. 

Excellent points, now just make sure every home buyer in America reads this and takes it to heart.

How many of you work in areas where a retainer fee is common for a buyer's agent?

Ralph in # 115:  I have been an agent in the Fort Worth area for nine years... and I have never heard of an agent getting a retainer fee for being a buyer's agent.  It sounds like a great idea, but I cannot think of any buyer who would go for it.  Perhaps commercial buyers... but I don't know anything, really, about commercial real estate.

No one does it here in Birmingham, either, but there are some places where it is done.

I do not transport buyers in my car.  There are several reasons for that, but an added benefit is that those who are just looking or working with someone else seem to only want to use my gas

From talking to agents from those areas, it all depends.  For the most part, it is treated like earnest money.  If they do not buy a home through no fault of their own, they get it back.  That said, there is some sort of reasonable effort expected. 

I had a client last year that I helped forever.  FOREVER.  We started in one part of town and ended up on the other.  We viewed around 200 houses.  We did write offers, four of which were accepted.  Of those four, three failed the home inspection in ways that cannot be described here (and were not visible to the untrained eye).  On the last one, he had a change in job description that messed up his financing.  Now, had he paid a retainer, in my opinion, he would get it back.  We both made great efforts to find him a home. 

Three years ago, I had another client who wanted to view homes every weekend.  Before we set foot in the field, I did a major interview.  They were able to buy, had money to cover the cost of closings and moving, and needed more space.  They did not have a home to sell, as they were renting from some of their family.  Anyway, after we looked at about 20 houses, some leading questions turned up information that I had missed before (and have since changed my interview).  They had been looking for about a year, and had no real intention of buying, unless that perfect house appeared.  Now, they would lose that money.

In the end, if they had a chance to lose money in the process, the game-playing would end.  It would never work here, though.  The second one person asked for it, everyone else would advertise no fee buyer agency

That has become the third thing that I ask.  First, I ask why they want to buy a home.  Second, I ask if they have had any contact with any other real estate agent.  THEN I check on a loan.

You are dead on it about the loan, though.  Unless they are  a cash buyer (in which case most sellers will still want a statement from their bank to proove it), if they will not start there, they will not start with me.

I personally do not work for free and I don't advocate anyone else working for free either.  I always use a Buyer Agency Agreement......especially with friends.

It looks like this thread is moving towards a discussion of  retainer fees for buyers.

The buyer broker agreement that I use in Florida has a paragraph addressing that as well as minimum commissions. I have routinely used the minimum commission paragraph when a customer is looking for low priced property. I have encountered little opposition. I have just started to use the retainer with customers that insist on making lo-ball offers that have little chance of success. I have a two strikes and you are out policy, ie Ill make two lo-ball offers for a client without a retainer. (Ive been surprised before when one of these is accepted) but the third offer will either be at the price I suggest or I want a $1000 non refundable retainer.

Ron,

That sounds like a good plan.

Hi Jackie-

I loved your post! I am serious about my business and if buyers are serious about working with me, they are someone else's customer! There are plenty of uncommitted "buyers" out there. let others share in the excitement!

--Sara in San Antonio

I was reading your top ten post list.  This was a great post I see why it was in your top ten.  I think it would also be interesting to post your top ten favorite posts of the year.