Entry by Carole Helwig

Fee Schedule

  1 Comment

Ok, here is my first official post.

I have my fees mostly in ink. Now, for the payment. If it's a service, for example a CMA, I get it. Invoice, payment.If it's for a longer term agreement, do you have the seller pay 1/3, 1/3 and 1/3?

If not, then do you have the seller pay a retainer and get the rest at closing from proceeds? What happens if it doesn't close? What happens if, for another example, it's a FSBO and part of your "job" is to troubleshoot an offer. It doesn't go together, and then the seller takes the house off the market?

Actually, now that I'm writing this, I'm getting more questions around this in my head. But, one at a time.

I will appreciate hearing how others have made this determination and what kind of outcomes you have had as a result.

Thank you.
Carole Helwig

1 Comment

There are many variations on this theme but I'll offer two that I use:
1) Time Is Money Plan:
25% of the total as a retainer. The next 50% in 25% installments per month. The final 25% at closing. Don't forget to add Any unpaid balance at closing if you get a quick sale. Of course, the client needs some incentive to pay 75% before closing. Pay me as we go and you get a lower total cost! And, the last 25% at closing ensures I have an incentive to keep working the listing.

2) Shared Risk Plan:
ALL my listing setup and marketing costs as a retainer and the balance at closing. I get paid for the work I have done even if it never goes to contract or the client withdraws for whatever reason. The client incentive to do this is my marketing materials and plan are superior and they want it. I also REQUIRE this approach if I feel the client is going to be unreasonable with their price. If they don't want it, I don't take the listing.

3) Client Assumes All Risk Plan:
Time and materials (I said two but I'll offer one more):
A retainer fee of some good faith amount (any amount you feel comfortable with, $500?, $1,000?) Then, a monthly invoice for time spent, out of pocket costs and your overhead fee. Of course all this has to be documented with your invoice (like lawyers and accountants). Clients have a hard time swallowing this one but it potentially could save them significant $$$'s.

One last point: there is no standard and there are as many ways to define your financial terms as your imagination will allow. Whatever it is, it has to be seen as a win-win business proposition. Herein lies the beauty of consulting!

This page contains a single entry by Carole Helwig published on June 7, 2007 5:25 PM.

Consulting with past terrific clients: How do you approach it? was the previous entry in this blog.

Working With Buyers, Part 2 - GRRRR is the next entry in this blog.

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