A Real Estate Retainer Agreement is a legal contract between a real estate agent and a client. The agreement includes a retainer fee to secure and maintain the services of the real estate agent or their company for an extended time.
A real estate professional may use a real estate retainer agreement if a client wishes to obtain the agent’s services to buy or sell real property. The scope of work the retainer covers may differ depending on the agent’s specialties and the client’s needs. A real estate agent may use a retainer agreement to secure funding for a real estate project in advance.
A retainer fee in real estate allows the client to hire a real estate agent or agency to assist with real estate transactions.
Unlike a standard service agreement, provisions in a real estate retainer agreement ensure that the agent receives a retainer in advance for services to be provided rather than retroactively billing for their services.
When a real estate agent or agency agrees to help someone sell property, they typically receive a commission. A real estate agent retainer is often non-refundable but may be applied to commission if they complete the sale.
A real estate agent typically asks for an upfront retainer fee to cover the costs of services associated with real estate sales, such as correspondence, walkthroughs, inspections, driving to properties, and completing real estate paperwork.
They may calculate their services hourly and deduct them from the retainer or provide complete services for a non-refundable flat fee retainer. Sometimes, the real estate agent will deduct the retainer from their commission once a property sells.
Real estate retainer pricing varies depending on your services and the client’s needs. You need a retainer that covers your operating costs while ensuring competitive pricing. To price your real estate retainer, consider the following factors:
A quality real estate retainer agreement can ensure a good relationship with the client. By clearly delineating the scope of work, the client will understand what the retainer is used for. Document your hours and services throughout the real estate process to ensure transparency, and outline the payment terms for retainer refunds and replenishment.
Make the contracting process more efficient by downloading a real estate retainer agreement template, available in Word and PDF formats:
