Koenig & Strey Real Living in Chicago started this week to charge potential home buyers a house-hunting fee for working with a real estate agent. The fees are common in some areas of the country and similar fee policies have been adopted by other HomeServices of America Inc. companies recently. But the fees are far less common in other areas, like in Chicago, and competitors are watching closely to see how the extra fees are embraced by home buyers.
“Agents invest a lot of time and money working with buyers and sellers and frequently don’t get paid at all,” notes one real estate agent.
The fee would be to help formalize the agent’s relationship with home buyers and ensure the agent gets compensated for the time spent in the search process, in case a transaction falls through or the buyer ends up abandoning their search altogether.
The upfront house-hunting retainer, for which the amount will be set by the agent, will be paid by the consumer. If the buyer ends up purchasing a home, the retainer will be returned to the home buyer as a credit at closing.
“If it’s embraced, it’s a great idea,” Michael Golden, co-founder of @properties, commented to the Chicago Tribune about Koenig & Strey’s fee. “One of two things happens: Either it’s like Bank of America charging a fee for an ATM, or everyone embraces it, and they’re leading the way for a new fee. My guess is it’s not going to go that way.”
Koenig & Strey operates 17 offices in the Chicago area and has about 860 real estate professionals.