I have been pondering the question of “SHOWING FEES” ever since I received my REAL ESTATE license. I remember telling my mother “eons ago” that I wanted to become a real estate agent. I also remember how concerned she was that if I couldn’t close a deal that would starve.
I remember her asking me the following questions:
Mom: Do you charge a fee when you drive people around to show them an apartment?
Me: No
Mom: What happens if the person does not rent from you?
Me: Nothing happens – I don’t get paid
Mom: What are you - some kind of free taxi service?
As real estate agents, the most valuable asset we have is our time. There is no biweekly paycheck to expect. All our pay is strictly commission based; therefore we have to be accountable for how we utilize our time. That said, why not charge clients a showing fee? I can understand not charging a fee when you have an exclusive relationship with a prospective renter or buyer. In the case when exclusivity does not exist, it might make more sense to charge a fee.
Look at it this way, requesting a showing fee from a client can be seen as a form of pre-qualification in that if a prospective renter/buyer is willing to pay a fee, it can indicate how motivated the person is to finalize a transaction. I have seen this happen many times whereby an agent runs around showing multiple apartments to a client and later on the client decides not to move. This can be extremely discouraging to new agents.
In order to conduct a showing, an agent might have to drive 35 minutes to a management company’s office in order to pick up keys to a unit and then drive another 30 minutes to show an apartment. After showing the apartment, the same agent might have to drive back to the management company’s office to drop off the keys and finally back to their office or home. In all, a showing can take up to 2 hours of an agent’s time. To have absolutely nothing to show for after all that *labor* can have a cumulative effect on a new agent. In contrast to other professions, this past winter, I called a plumber to look into a plumbing situation and one of the first things mentioned was that they charge $80 just to come out to look at the problem. The similar quote was given to me a few years ago when I called an Electrician to fix a circuit problem.
Obviously, if you decide to start charging a showing fee, you do not want to scare clients away by charging too much. The amount to charge should be dependent on your market. You have to always keep in mind that you are competing with other agents. If you charge too much, you might not get their business.
The number one hindrance for agents when it comes to requesting a showing fee is Fear! Fear that they will lose business to their competition. That is simply not true – people inherently want to save money, however they also want to get something of value. That said, if an agent is offering quality service in addition to quality product then the showing fee becomes an acceptable cost of doing business. Quality service includes the simple act of driving a client around to see apartments and quality product is “not wasting a client’s time by showing them crappy apartments.”
I experimented with charging clients a showing fee and I was pleasantly surprised as to how willing people were to paying it. If you’d like to learn more about my experience charging a showing fee, please drop me a line at: ike@realtywarp.com
Thank you for reading.
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