Flat Fee FAQ – Jamie Coates Realty

[headline h=”1″]Frequently Asked Questions concerning the Flat Fee Business Model[/headline]

[callout]It’s important to stress that to ensure the full savings available to you, you must take charge early. Only those properties in which it is clear I am your representative are you guaranteed the greatest savings. That is, have a buyer’s agency agreement in place sooner than later and advise other agents you have representation. A small contract fee confirms a buyer’s seriousness while ensuring appropriate attention and due diligence is extended to them as my mission is to provide each client stellar service.[/callout]

Below are questions frequently asked concerning the realty services I offer and for which I’m compensated a standard flat fee. You can read the whole enchilada here. The answers below provide what you need to know in a nutshell.

Click the questions to reveal the answers.

[toggle_content title=”Can I really save thousands of dollars?”]Yes, indeed, except it’s probably more correct to say you keep thousands of dollars since it’s less money you’re putting on the table. The amount of savings varies on the purchase price as well as the commission offered by the seller. The average sales price for a condo in Puerto Vallarta is about $300,000 and the typical savings based on that price is $7,000.[/toggle_content]

[toggle_content title=”How much does it cost to use your services?”]Initially, only a small $500 contract fee secures my services. This fee is typically reimbursed later from the seller’s commission upon a sale.

For any property purchased up to $500,000, the full flat fee charge is $5,000 and for any purchases greater than that, I charge a flat 1% fee of the purchase price. Again, this charge is typically paid through the commission offered by the seller for selling his or her place and virtually all sellers offer a commission equal to or greater than my fee.

Greater savings are available as the difference between my fee and the commission offered is credited back to the buyer as a rebate towards closing costs or other purchasing expenses. Hence, on a $300,000 purchase the commission offered to the agency representing the buyer is typically 4%, or $12,000. After deducting my $5,000 fee the buyer is credited the $7,000 difference towards closing costs.

The better question to ask is, “How much does it cost to not use my services?” Review the various savings available at different price points with this graph.[/toggle_content]

[toggle_content title=”I saw this condo I really like. Can I use you as my buying agent?”]Depends. If you saw it online and haven’t communicated with another agent or agency concerning it, then yes, you sure can use me. If you’ve been in town and visited the property with another agent or met a representative there, then the answer isn’t so easy.

If you’ve been working with another agent chances are he or she is legally bound only to the seller as there likely isn’t an agency agreement between you and that agent. So, officially, you’re not bound to anyone without such an agreement. But it’s a small town and we all work together and keeping cordial relationships between agencies is only good business. If your relationship with another agent is established and they’re making a gallant effort at winning your business, I’d suggest you stay with them.

But without an agency agreement in place, it’s still your decision who you use. The longer it has been since you last saw a property with another agent the less of an issue one can make of it. 180 days is a reasonable time span that no one can argue with. But this leads to the next question, when should you contract my services?[/toggle_content]

[toggle_content title=”When is the best time to contract your services?”]Before you look at any property is the best time to contract my services. If you choose me as your representative it’s best to ensure there will be no conflict between agencies later which could have an effect on your savings. If when in town you go from real estate shop to real estate shop investigating what each has to offer where in one you discover a specific property you like and arrange to see it without me, they’ll likely argue procurement rights should you not use them in putting together the offer and likely expect some portion of the commission offered, lessening your savings.

There’s nothing wrong venturing out on your own after we have an agreement in place. You may walk pass an agency with a listing in the window that grabs your interest. Just be sure to tell them upfront you have an agent representing you so they’re not inadvertently misled in anyway.[/toggle_content]

[toggle_content title=”Is it true you charge an upfront fee?”]Yes, I do. I request a nominal $500 contract fee that’s later deducted from the total fee payable at point of closing on a sale. This contract fee, though, is ultimately to the buyer’s best advantage for a variety of reasons.

First, it ensures good service to active buyers, that is, those that really want to buy and are more or less ready to. It doesn’t mean only those who are ready to buy this week or this month. Some buyers need more time than others before finding their dream home. But the contract fee says you want to buy when the right property comes along at the right price, that is, one matching your preferences and price range.

At the same time, it weeds out those that can’t make a decision to buy or not, or at least know deep inside the time for them just isn’t right. I can only handle a handful of active clients at any one time, therefore I focus on those most ready. So again, it ensures active buyers good service and attention.

Furthermore, the fact buyers have paid a contract fee informs selling agents (and therefore the sellers they represent) my clients are well qualified with whom they can make a deal and who should be taken seriously. In other words, the contract fee puts you in the driver’s seat to negotiate a good deal.

Last, but not least, if after a lengthy process of visits and home tours you conclude purchasing property in the Puerto Vallarta region of Mexico is not in your best interest, and therefore not buy anything, then it would the the wisest $500 consultancy fee you ever invested. Smarter than discovering it after a purchase.[/toggle_content]

[toggle_content title=”How am I legally protected you’ll provide the services and savings as advertised?”]Through an exclusive buyer’s representation agreement. This is a legal agreement between us that clearly states what each of our expectations are to the other including my fees as well as your rebated savings from commissions paid by sellers.[/toggle_content]

[toggle_content title=”Can I review your buyer’s representation agreement?”]Absolutely! Email or call me and I’ll send it to you. You’ll discover it is written in plain English without trickery or mumble jumble legalese. Naturally, we won’t sign an agreement until after we’ve had an opportunity to meet in person or online as it’s important I first understand your requirements and desires and that we’re comfortable with one another.[/toggle_content]

[toggle_content title=”For how long does the agreement last?”]Probably up to the time you make a purchase but to be a binding contract it must specify an actual end date, just like an exclusive listing agreement requires. That date can be for whenever you’re most comfortable. Six months, one year, end of the current year, or longer.[/toggle_content]

[toggle_content title=”Can the agreement be extended?”]Yes! Some people need more time than others to find the right property. To be a legal contract, there needs to be a fixed end date; however, if you need more time we can simply renew it, inserting a new date, and, no, an additional contract fee is not required.[/toggle_content]

[toggle_content title=”Are your fees fixed?”]The $5,000 flat fee is the set price for most purchases. Regardless of the price of the property the workload remains much the same.

Should you have a property in sight that requires substantially less research or work on my part because you’ve narrowed it down, perhaps a FSBO and you want professional guidance putting an offer together, then, yes, I’d be willing to negotiate a smaller fee.

Conversely, should your needs be beyond the norm in effort, I could potentially ask for a greater fee. If you’re not familiar with the area and really uncertain where you’d like to settle and would like me to play tour guide, for example, I could do that. Taking a bus to Sayulita and touring it on your own would be cheaper but I’d be happy to spend the time it takes for you to get a feel for various communities, a mix of fun and facts along with some property showings to boot.[/toggle_content]

[toggle_content title=”Why do you offer so much of your commission back to the buyer when no one else does? How can you afford to do that?”]Honestly and simply, I want a steady flow of business throughout the year than rely on the occasional “big sale” where each commission means everything. Consumers today demand good value and service and I believe my offering such will be made up through increased sales. I prefer to earn a more frequent ongoing income working for a variety of clients. It’s that simple.[/toggle_content]

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[headline h=”3″]Introducing the flat-fee business model to Puerto Vallarta Real Estate[/headline]

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