While I have not done this I know a very successful commercial REALTOR that charges a $2,000 deposit before helping a buyer or tenant find a property. She provides incredible service, works with doctors and lawyers and other professionals as clients, and does extremely well. I was once one of her clients prior to getting my RE license. Yes, I paid her $2,000 deposit and never regreted it.

It's a good idea in theory, but I think any prospective buyer I floated it by would just find another agent, one who didn't require a deposit. Unless everyone did it, or unless you're so well-respected that everyone wants to work with you, I don't think you could get away with it. And if you're so well-respected that everyone wants to work with you, you shouldn't need a deposit, anyway. I don't know about the rest of you, but with all the competition in my neck of the woods - and from agents with a lot more experience than me - I'm just happy to take a chance on anyone who'll let me, and if it doesn't work out - if I waste my time and gas-money - I chalk it up to experience.

Bente, That is my impression also. I doubt this would work well with residential RE. The REALTOR I wrote about was commercial.

Actually, what I do in  residential RE is ask the prospective buyer to get pre-approval before I invest too much of my time. This weeds out a lot of the "tire kickers".

Great Idea but it'll fall in the "nice try category", I think.

Unless your a sought after agent they'll just go with someone else.

This whole business is based on contingent payment (usually) and you need to be careful who you take on as buyers and sellers, it can cost a lot of your money if your not careful.

http://realestatetorrington.com

Megan, I would never even consider charging a fee like that, refundable or not. I think I would get a terrible reputation pretty quick. I don't want people to think it is all about the money. They have wasted their time too if they didn't see anything they wanted. Sometimes people just need to get out there and shop and see what is available in their price range. I don't always consider it a waste of time, sometimes it is building rapport with people who may come back when they are ready.

Megan, just close the deal !!!!

Megan, do you know where Tin Lizzys is?

Depends on what type of transaction and the services required. There may be situations where additional efforts, time etc will be required. At that point, a retainer may be appropriate. Case by case basis.

Yeah, my office is next door so I can crawl back and forth.  Today is big day though cuz do lots of prospecting on Fridays.

Radley close the deal!

Yes Bill, it is time to sign !!!!!  Megan, I have you down for 3:00 today.

On paper, Pet Rocks weren't supposed to work either

Radley, You make me so proud to be your father, I mean big brother!

ABR course was probably the biggest eye opener for me. What I learned in there shaped my business ever since. I don't know how much the instructors get around, but ours was one of the first EBAs in AZ and was blacklisted by the local agents at first, not even 15 years ago. They tried to freeze him out, thinking buyer representation would never catch on.

I agree with Megan -- IF we as an industry could get to the place where buyer relationships were all formalized as seller relationships usually are, our professional worlds would be transformed.

Of course, with the way things currently are, it's a pipe dream . . . still, hope springs eternal . . .

Instead of "Deposit".... let's call it a "Retainer"..... after that, you want a salary too?  

I will show you how to close deals at 3:00 today.

I agree with many of the thoughts here. The ABR class I took a few years ago was an eye opener for me too. The most interesting part was the difference between the way city agents worked compared to suburban agents. There were quite a few suburban agents that took retainers at time of signing the contract. I also believe that until it becomes the norm that not too many of us will do it.

I agree with Mary about going out anyway. I use the buyers just like they may be using me. The more property I see the more I am able to potentially sell to another client. It gives me an education on all of the properties that are out there that I haven't seen yet and the excuse to see them.

Last year I had a young investor who came from REIT land--never had purchased a 'single' property. Super cerebral type who wanted charts and graphs for EVERYTHING. That was the language he understood.

We agreed on a 500.00 upfront fee to cover my resources and custodial work, which would apply toward DP on his purchase or forfeit. Nothing made sense to him and he happily went back into REITs again. It was the 'reit' place for him . . . LOL

On RT this past few days, a super post by Chris Newell--a brilliant agent north of our border, about how our knowledge, resources and connections are what we are paid for.  Which we should be paid for one way or another.

Like I said, pipe dream and I'm nowhere near all the way there yet. But part of our skill is in calculating what we will need to earn to make what we do worth our time. Y'all do it each year, hopefully when doing your business plan.   :)

Sometimes the value is not in the commission earned but in less-immediate, tangible or 'sidereal' benefit, such as Joe's gaining market knowledge from showing properties or Mary's rapport building. I call it good PR for my office. Or a reconnaissance mission for 'not there yet' buyers who will remember our kindness. An investment into our future.

Everything counts in large amounts (DePechemode) LOL

Megan, I am going to gym to work on my pecs but I will be at the secret place at 3:00 !!!!

Do some 12 ounce curls for me Rad . . . LOL

Speaking of retainers, make sure that goes to your broker and not Megan.

The food is excellent........ quesadillas are the bomb.... okay fine, let's go all the way downtown for the business meeting.  I'll rent a conference room and put my shirt back on.

Actually my office is right next door and I will give you a tour.  You will not believe the office.  Molly decorated it with pots and pans and stuff.  Instead of "inboxes" we have pottery bowls.  Is ridiculous but we have jukebox !!!!

FREE PARKING

Not a problem, are you gonna sell me a house too?  I need one.

Can you find me a swimming pool within ten minutes of Tin Lizzys?

"Nothing made sense to him and he happily went back into REITs again. It was the 'reit' place for him . . . LOL"

You should be pun-ished for that one Candice! PUNished... get it? I just crack myself up sometimes...

LOL, Jay . . . there is a gun to my head as we speak . . .

Candice, have things gotten that bad that you are now packing heat. Or is it like Barney and you don't have a bullet?

ROFL!

"Gimme Back My Bullets"  (Lynyrd Skynyrd)

No deposit.  This goes with the territory.   maybe they got cold feet.  Make sure you pre-qual people before you waste anyone's time.  I learned this the hard way.

Buyer flake for SO many reasons.  Some people are just looking b/c they are lonely.

If you made me pay $250 for a buyers service when ANYTHING can happen in a transaction I would just move next door to the next agent who is willing to take the chance.

Another question???  What if you guys just don't work well together.  what if you have a personality clash.  They should be able to exit the agreement if they want.  They are not sure how things are going to go when you 1st start working together.  I have had clients who would not sign till the 2nd and 3rd time out.  I don't push the agreement.  I read the person and if we work well together then they will sign it when the time is right.  If I pushed a fee on them before we even started forming a bond then they may go to the next person.

Love the post.  Don't think I am being cruel here.  Another issue may be b/c you are young.  I get that a TON (i guess I could have a worse problem).  Many people just look me in the eye and tell me if I wanted to buy a home from my daughter then I would have called her.  Thankfully I just usually laugh and bring  my bald husband to the next meeting.  If they only knew he is only 5 years older then me.

Megan-I notice you told Radley, "I will meet you there but I charge a retainer." Considering the title of this thread "Tire Kickers and Deposits" I can only assume you are concerned that our boy Rad may be a "Tire Kicker". You are a wise young woman. I know he's a player ;)

Christina and Megan-Enjoy all those comments about how young you are. I remember (just barely) getting those comments in a previous career, I hated it then but would love to hear it now ;)

Me too! I remember when I pretended to be older in my previous career! (Those were the days!)

Megan - I am 51 but earned my doctorate in Optometry at age 25 (about 3 years before normal) and heard those "how old are you anyway" comments like crazy and hated it. I would love to hear it now...I guess you said that didn't you...Thank you soooo much. You made my week!

Uh, Bill, now is the time to stop living vicariously through Radley...

Megan - In fact there is a funny story there. Do you remember when Tom Selleck was on the TV show friends? He played the part of an eye doctor and then ended up in a relationship with one of the young ladies on Friends. I had not seen that episode, but a young girl about 18 or 19 was sitting in my exam chair giggling and looking up at me. I said "what's wrong?" (wondering if I had food in my teeth or something) and she asked if I watched Friends and I said I had not seen it for a while. She finally told me she thought I looked like him and it was so funny that I was her eye doctor, etc.

Megan, you read my mind -------> Bill looks like Tom Selleck !!!

Radley - How was the "prospecting"?

Hey Bill, well Megan did not show up so I had to stick with bizness..... totally wiped and exhuasted.  Listed some serious stuff today but too wiped to figure it all out and have to show property tomorrow (Sat) in the heat and then be fresh for a "wingman party" .... Sorry for the rant but I am worn.

In terms of Blog Advice -----> you newbies write this down.... Friday's are THE days to make sales calls cuz everybody is in a good mood !!

How was your day Bill, you got called Tom Selleck today !!!!  That's good reason to put the kilt back on.

Radley - Megan made my whole week today!

Hmmm, with 1,800 agents around here I don't think I could get away with charging up front.  It would be nice though :))

What I have started doing is having the buyers FOLLOW ME in their car to look at homes.  Around here, we can easily drive 100 miles in an afternoon looking at homes.... from one side of town to another.

This really does seem to cut down on the number of homes my buyers want to look at.

My first partners swore she was going to get a motorcycle so clients HAD to follow her, lol!!

LOL . . . I have had my eye on this white Vette . . . thinking the same thing . . .

Candice, just think how great you will look in the Vette.  Go for it.  Buyers can follow you.

Candice - Yes, and if they seem flakey and haven't been pre-approved you can lose them in traffic ;)

LOL you guys are not helping me resist temptation!

Candice - Take a risk, go for it!

"Little White Corvette" (singing Prince) LOL . . .