Should you pay some costs to be the boss of your real estate sale or purchase?

What up front costs should a real estate consumer incur to sell or buy a house?

In today's real estate market, there are many costs that a real estate agent incurs when they are listing a house for a seller or helping a buyer find the right place to call home. These costs diminish the profit of a real estate agent's commission and in today's market might put a strain on how effectively a real estate agent can help you buy or sell a house.

If you are purchasing a house, have you considered the costs that a real estate agent spends in gas alone to drive around touring houses? Sometimes a home buyer can view 15-20 houses that can be spread throughout a 30-mile radius. 

Should a home buyer pay a gas fee to a real estate agent to tour houses outside of a certain area? Should a home buyer pay a gas fee after a real estate agent has shown that buyer a certain number of houses?

If you are relocating from another area and are seeking in-depth community and school information, should a real estate agent provide this information to you at no charge? Typically a real estate agent will mail relocating home buyers a relocation package. These packages, depending on the content, can cost anywhere from $5-10 to send. Sometimes home buyers who seek this information will not make a move for 6-18 months from the time they request it. 

Should the real estate agent incur this fee or should there be a charge? I have noticed that many Chambers of Commerce are now charging a fee for relocation information, some to the tune of $30 or more, depending on the information they provide to a home buyer.

If you are a home seller, certainly there are several up front costs incurred by a real estate agent. There is a cost for a real estate agent to belong to their local Multiple Listing Service. This same service is where your house will gain exposure to many agents in the area. 

Should your agent charge a fee to list your house with his/her Multiple Listing Service?

How about advertising? If you are a home seller, you want to get as much exposure for your house as possible. Should you pay your real estate agent to advertise in certain magazines that might be outside of their normal marketing venues?

I have a friend named Stacey who has her house listed in a northern Illinois suburb. She realized her local market was a bit sluggish and houses were sitting on the market for more than 90-120 days. She wanted her house to get maximum exposure on the market. 

She gave her real estate agent $300 when she listed her house because she wanted it to appear in certain publications. Stacey's bottom line was that she wanted to lessen her days on market. A bonafide offer to her was worth the up front money she spent, because it would save her money to have a buyer due to the advertising effort.

What if you are a seller and your offer to purchase falls through at the time of closing? Should you pay a certain fee to reimburse your real estate agent for some of his/her expenses to market your house? Should this be dependent on how long your house has been marketed and what costs were spent to market it?

How do you feel about paying up front fees to a real estate agent to help you buy or sell a house? Please share your experience or thoughts by commenting.

Posted by Rebecca D. Levinson

Comments

[Fran Horton]

Upfront fees are charged to cover the costs of time and money that your Agent will spend to help in the search of a property. Also, Flat-fee Brokers charge their fees upfront. As the cost of gas and time go up, it becomes more and more necessary to charge buyers for time and money spent. Otherwise, buyers call many Agents for the same reason and the Agents see no return on their effort to help the customer. You want and need someone who is willing to put the time and effort into your real estate needs.

I have my buyers sign that they want me as their personal broker and that I am paid by the listing broker or seller for my effort. The Buyer places a deposit that will be returned as a credit when the closing takes place and the Buyer isn't getting charged for services not rendered. It is a win, win.