This is a follow up blog to a Michael Setunsky AR Q&A post earlier this week that created a great buzz!
Having been my own boss, an entrepreneur, (the ultimate career-path on this planet), since I was 13 (e.g. a door to door car wash business, a wood splitting & firewood business, a house painting business, my pride & joy: 25 years a Wedding Mobile DJ, and now a Realtor)...I've always questioned why we don't get paid for our time; only our “results”.
However, our time, our automobiles, our fuel/maintenance, staff fees, subscriptions, etc. cost us money whether ‘they” buy or not. (And it ain’t always our fault when they don’t).
I’ve always felt as Realtors, we give away too much of our time, our energy & our boundaries. The public doesn’t have the sense of value of our time the way they respect a doctor’s or attorney’s time.
So when Michael Setunsky posted in our AR Q&A: Do you ask for a retainer fee? Why or why not? I was all over it. (http://activerain.com/questions/show/33500/do-you-ask-for-a-retainer-fee-why-or-why-not-#102452)
I have been told by management for years it violates RESPA to require a retainer fee. (Real Estate Settlement Procedures Act) yeah, you know you always wondered what that stood for.J LOL we say it a lot, but who knew?
OK, so I finally spoke with Ron Chin, attorney with (C.A.R.) California Association of Realtors. He explained to me why this is…to date…never done…legally.
(Not that it can’t be done). But why to date, it has not been done.
#1. Who wants to pioneer it? While the “competition” is FREE, your for fee-retainer fee.
#2. You have to create a retainer fee form, which you will use “from now on, with EVERY client”.
#3. That form has to be approved by the BRE. In my case the CA BRE.
#4. That retainer fee needs to list out all you will do for that fee.
#5. You have to demonstrate (prove) you have completed each of those tasks.
Ah ha, see hear is where the Free-Spirits loose interest. (That’s me too by the way).
#6 Only when you’ve completed all itemized tasks in your BRE approved document (& closed escrow or cancelled services), can you received your retainer fee.
#7 Meantime, your fee sits in an escrow account.
#8 Attorneys are subject to a different set of laws than Realtors. Why you ask?
(So did I) The best answer was Ron Chin’s answer: “Attorneys have better lobbyists”.
#9. So, you need to be willing to pioneer the Retainer Form, get it BRE approved, use it consistently “from now on” and weather the storm of “you charge a fee” when others don’t.
#10. OK...Who’s in?!?
Footnote: by the way (at least CA) agents, (I see many violate this) DO NOT PUT “Buyer to pay TC FEE” in your contract nor your Buyer/Broker Agreement. It’s an “additional commission”.
Or it’s a RESPA violation.