Real Estate Cafe: Menu of Fees & Rebates
View in outline form (click on arrows in margin to expand outline)
Last update: 04/21/08
Addendum to Exclusive Buyer Agency contract
III. COMPENSATION
A. Authorization to request compensation
The Client shall authorize TREC to request payment of the buyer agent fee (typically 2 - 3.5% of sale price) in the offer and purchase price negotiated with the seller. TREC shall insert the appropriate contingencies into the Client’s offer to secure its compensation out of the proceeds of the real estate transaction. However, the client understands that failure to comply with "Client Duties" in Section IB of TREC's exclusive buyer agency contract may undermine TREC's ability to collect and rebate a buyer agency fee.
The Payment Option chosen by the Client shall determine the buyer agency fee collected and rebated. Each Payment Option entitles Client to varying degrees of TREC’s professional services as described below and in any subsequent scope of work.
B. Payment Options: Menu of Fees & Rebates
The Client must choose one of the following payment option plans from the working draft below:
TWO COMMISSION / REBATE OPTIONS
Option 1.1: Traditional Commission / 25% rebate
- TREC will collect a 2% - 3.5% buyer agency fee from the proceeds of that transaction at closing
- Rebate: 25% of buyer agency fee
- Retainer: None ($500 retainer is waived)
- Hourly fees: None
- Minimum fee: $5,000 (may reduce rebate)
- Minimum donation: None
- FSBO fees:
- If a "For Sale By Owner" (FSBO) property offers a 2 - 3.5% buyer agency fee, the full amount will be collected by TREC and 25% will be rebated to the Client.
- If the FSBO sales price does not include a buyer agency fee, a $3,000 minimum fee will be due to TREC regardless of whether 20 hours of service are rendered. Services rendered beyond 20 hours will be compensated at $100 per hour and due at closing.
Option 1.2: 1% commission / balance rebated
- Limited availability:
- TREC may limit the number of clients using this payment option at anytime without notice
- Limited to properties originally asking over $1 million
- TREC will collect a 2% - 3.5% buyer agency fee from the proceeds of that transaction at closing
- Rebate: Buyer agency fee above 1%
- Retainer: None ($500 retainer is waived)
- Hourly fees: None
- Minimum fee: $10,000
- Minimum donation: None
- FSBO fees:
- If a "For Sale By Owner" (FSBO) property offers a 2 - 3.5% buyer agency fee, the full amount will be collected by TREC and any fee above 1% will be rebated to the Client.
- If the FSBO sales price does not include a buyer agency fee, a $5,000 minimum fee will be due to TREC regardless of whether 20 hours of service are rendered. Services rendered beyond 20 hours will be compensated at $150 per hour and due at closing.
FOUR HOURLY FEE OPTIONS
Option 2.1: Fee-for-service: $150 per hour / 100% rebate
- TREC will collect a 2% - 3.5% buyer agency fee from the proceeds of that transaction at closing
- Rebate: 100%. Any Buyer Agent fee collected will be rebated, in it's entirety, to Client.
- Retainer: $500 retainer is waived
- Hourly fees: $150 per hour
- Minimum fee: None
- Minimum donation: None
- Billing policies:
- Professional and administrative time is billed in 15-minute increments, for a minimum charge of $37.50 for professional or administrative task.
- All professional and administrative tasks, including but not limited to the following, are billed at the blended hourly fee of $150 per hour: price negotiations and other due diligence efforts, MLS research and market analysis, showing properties, travel to showings and appointments, e-mail and intranet posts, telephone calls, faxes, internet searches, making appointments, preparation of bills and invoices.
- Client may pay invoices, which are due upon receipt, by check, credit card using PayPal, or via electronic transfer to TREC's Bank of America account.
- FSBO fees:
- If a "For Sale By Owner" (FSBO) property offers a 2 - 3.5% buyer agency fee, the full amount will be collected by TREC and rebated to the Client.
- If the FSBO sales price does not include a buyer agency fee, there will be no rebate to Client at closing and no minimum fee.
Option 2.2: Fee-for-service: $125 per hour / $500 retainer / 100% rebate
- Same as 2.1 above; however, if Client pays $500 retainer and agrees to prepay for professional services in four hour increments, TREC's hourly fee will be reduced from $150 to $125 per hour.
- TREC will collect a 2% - 3.5% buyer agency fee from the proceeds of that transaction at closing
- Retainer: A $500 retainer is payable to TREC before services are rendered
- Prepayment policy:
- Additional installments of $500 must be prepaid in advance of services which will be billed in four hour increments (e.g hours 5 through 8 must be prepaid after receiving the first four hours of services.)
- Billing policies:
- Client may may pay invoices, which are due upon receipt, by check, credit card using PayPal, or electronic transfer to TREC's Bank of America account.
- Professional and administrative time is billed in 15-minute increments, for a minimum charge of $31.25 for professional or administrative task.
- FSBO fees:
- If a "For Sale By Owner" (FSBO) property offers a 2 - 3.5% buyer agency fee, the full amount will be collected by TREC and rebated to the Client less a minimum fee of $2,500 will be due to TREC for the first 20 hours, regardless of whether 20 hours of service are rendered.
- If the FSBO sales price does not include a buyer agency fee, there will be no rebate to Client at closing but a minimum fee of $2,500 will be due to TREC for the first 20 hours, regardless of whether 20 hours of service are rendered.
Option 2.3: Fee-for-Service: $100 per hour / $500 retainer / donation / 100% rebate
- Same as 2.1 above; however, if Client pays $500 retainer and agrees to prepay for professional services in five hour increments, TREC's hourly fee will be reduced from $150 to $100 per hour if Client and meets donation requirements below.
- TREC will collect a 2% - 3.5% buyer agency fee from the proceeds of that transaction at closing
- Retainer: A $500 retainer is payable to TREC before services are rendered
- Prepayment policy:
- Additional installments of $500 must be prepaid in advance of services which will be billed in five hour increments (e.g hours 6 through 10 must be prepaid after receiving the first five hours of services.)
- Billing policies:
- Client may pay invoices, which are due upon receipt, by check, credit card using PayPal, or electronic transfer to TREC's Bank of America account.
- Professional and administrative time is billed in 15-minute increments, for a minimum charge of $25 for professional or administrative task.
- Minimum donation:
- Client agrees to donate 10% or more of the rebate to one of more charitable purposes, as documented in the attached donation pledge.
- Regardless of rebate size, a minimum donation of $1,000 MUST be distributed to one or more non-profit organizations participating in the ASAP: AIDS Shelter Alliance Partnership. The buyer may distribute the balance of their donation to others via the "community commission."
- FSBO fees:
- If a "For Sale By Owner" (FSBO) property offers a 2 - 3.5% buyer agency fee, the full amount will be collected by TREC and rebated to the Client less a minimum fee of $2,000 will be due to TREC for the first 20 hours, regardless of whether 20 hours of service are rendered.
- If the FSBO sales price does not include a buyer agency fee, there will be no rebate to Client at closing but a minimum fee of $2,000 will be due to TREC for the first 20 hours, regardless of whether 20 hours of service are rendered. Further, Client agrees to make a minimum donation of $1,000 to a non-profit organization participating in the ASAP: AIDS Shelter Alliance Partners campaign.
Option 2.4: Hybrid Plan: Choose your own hourly fee / rebate / donation
- TREC will collect a 2% - 3.5% buyer agency fee from the proceeds of that transaction at closing
- Similar to other hourly fee options, however:
- Client chooses hourly rate for TREC services: $_____ instead of $100 per hour
- Buyer Agent fee rebated: _____% based on client's hourly fee
- Retainer: A $500 retainer is payable to TREC before services are rendered
- Minimum donation:
- TREC and Client agree to donate 10% or more of the buyer agency fee they receive to one of more charitable purposes, as agreed in the attached donation pledge. (Example: If client receives a $7,500 rebate on a $10,000 commission, the client shall donate at least $750 and TREC will donate $250.)
- FSBO fees:
- If a "For Sale By Owner" (FSBO) property offers a 2 - 3.5% buyer agency fee, the full amount will be collected by TREC and rebated to the Client, according to the agreed upon hybrid plan, provided a minimum fee of $2,000 will be due to TREC for the first 20 hours, regardless of whether 20 hours of service are rendered.
- If the FSBO sales price does not include a buyer agency fee, there will be no rebate to Client at closing but a minimum fee of $2,000 will be due to TREC for the first 20 hours, regardless of whether 20 hours of service are rendered. Further, Client agrees to make a minimum donation of $1,000 to a non-profit organization participating in the ASAP: AIDS Shelter Alliance Partners campaign.
THREE FLAT FEE OPTIONS
Option 3.1: $5,000 fee / $1,000 donation / 100% rebate
- Limited availability:
- Client must own property, not currently for sale, with at least $5,500 equity
- TREC will collect a 2% - 3.5% buyer agency fee from the proceeds of that transaction at closing
- Rebate: 100%. Any Buyer Agent fee collected will be rebated to Client, subject to conditions below
- Line of credit
- Client agrees to sign $5,000 line of credit from Rate1Mortgage.com before services are rendered
- Retainer: $500 retainer is paid from line of credit before services rendered
- Hourly rate: Covers first 40 hours (effective rate of $125 per hour)
- Payment policy: TREC draws $500 per month from line of credit, or hours worked whichever higher
- Additional hours: Beyond 40 hours, hours are billed at $125 per hour
- Minimum fee: $5,000 regardless of whether 40 hours are worked
- FSBO fees: $5,000 regardless of whether 40 hours are worked
- Closing cost repayment
- TREC will request a $5,500 closing cost credit from the seller in any offer submitted so the Client may repay the line of credit and receive a 100% buyer agency fee rebate.
- If seller rejects some or all of the closing cost credit, TREC may reduce the rebate by up to $5,500 to repay the line of credit and any interest.
- Performance bonus: None
- Minimum donation:
- Regardless of rebate size, Client must distribute a minimum donation of $1,000 to one or more non-profit organizations participating in the ASAP: AIDS Shelter Alliance Partnership.
Option 3.2: $3,000 fee plus performance bonus / $1,000 donation / 100% rebate less bonus
- Limited availability:
- Client must own property, not currently for sale, with at least $3,300 equity
- TREC will collect a 2% - 3.5% buyer agency fee from the proceeds of that transaction at closing
- Rebate: 100% less performance bonus. Any Buyer Agent fee collected will be rebated to Client subject to conditions below
- Line of credit
- Client agrees to sign $3,000 line of credit from Rate1Mortgage.com before services are rendered
- Retainer: $500 retainer is paid from line of credit before services rendered
- Hourly rate: Line of credit covers first 40 hours (effective rate of $75 per hour)
- Payment policy: TREC draws $500 per month from line of credit, or hours worked whichever higher
- Additional hours: Beyond 40 hours, hours are billed at $100 per hour
- Minimum fee: $3,000 regardless of whether 40 hours are worked
- FSBO fees: $3,000 regardless of whether 40 hours are worked
- Closing cost repayment
- TREC will request a $3,300 closing cost credit from the seller in any offer submitted so the Client may repay the line of credit and receive a 100% buyer agency fee rebate.
- If seller rejects some or all of the closing cost credit, TREC may reduce the rebate by up to $3,300 to repay the line of credit and any interest.
- Performance bonus:
- Pre-negotiated based on savings not to exceed 2% of sales price, will reduce rebate from commission
- Minimum donation:
- Regardless of rebate size, Client must distribute a minimum donation of $1,000 to one or more non-profit organizations participating in the ASAP: AIDS Shelter Alliance Partnership.
Option 3.3: $3,000 retainer plus bonus / $1,000 donation / 100% rebate less bonus
- Limited availability:
- TREC may limit the number of clients using this payment option at anytime without notice
- Not available on properties originally asking over $1 million
- TREC will collect a 2% - 3.5% buyer agency fee from the proceeds of that transaction at closing
- Rebate: 100% less performance bonus. Any Buyer Agent fee collected will be rebated to Client, subject to conditions below
- Retainer: $3,000 prepaid by buyer
- Hourly rate: Covers first 40 hours (effective rate of $75 per hour)
- Additional hours: Beyond 40 hours, hours are billed at $125 per hour
- Minimum fee: $3,000 regardless of whether 40 hours are worked
- FSBO fees: $3,000 regardless of whether 40 hours are worked
- Performance bonus:
- Pre-negotiated based on savings not to exceed 1% of sales price, will reduce rebate from commission
- Minimum donation:
- Regardless of rebate size, Client must distribute a minimum donation of $1,000 to one or more non-profit organizations participating in the ASAP: AIDS Shelter Alliance Partnership.
MAKE YOUR OWN PAYMENT PLAN
Option 4: Make your own compensation plan / rebate
- TREC will collect a 2% - 3.5% buyer agency fee from the proceeds of that transaction at closing
- Propose any hourly fee, flat fee, retainer, rebate, and donation, or some combination of all, and TREC will consider your proposed payment plan.
- Minimum donation:
- Regardless of proposed terms, Client must distribute a minimum donation of $1,000 to one or more non-profit organizations participating in the ASAP: AIDS Shelter Alliance Partnership.
Minimum fee on For Sale by Owner properties
Minimum fees may apply, see each compensation option above for details.
Minimum donations to ASAP (AIDS Shelter Alliance Partners) & Community Commission
Minimum donations may apply, see each compensation option above for details.
Payment Option Chosen: _________ Client Initials: _________
VIII. TERM OF CONTRACT
The term of this agreement shall commence on _________ and terminate on ___________.
Signatures
__________________________
Client Date
__________________________
TREC Buyer Agent
__________________________
Date
__________________________