According to a breaking report from the Chicago Tribune, potential buyers and renters will have to deal with new fees from Koenig & Strey Real Living starting April 2.
Reported by Mary Ellen Podmolik, the fees would charge potential buyers a fee for working with Koenig & Strey Real Living agents and renters with commissions. Though such fees exist elsewhere in the U.S. (most likely to aid struggling company’s bottom lines), they are “virtually unheard of,” in Podmolik’s words, among Chicago area brokerages.
“This is part of a larger effort to improve our buyer processes,” said Mark Pullinger, a Koenig & Strey vice president, in Podmolik’s article. “We believe in being completely upfront with our clients, and want them to fully understand how our business works and how a buyer’s agent represents their interests.”
The fees will work at follows: Koenig & Strey clients will pay their buying agent an upfront retainer fee, the amount of which is set by the agent, but if the agent receives a commission from a purchase, the retainer is returned. Even if no retainer is set, though, the buyer still pays Koenig & Strey a $250 commission plus 2.5 percent of the purchase price. The company said that in most cases, that 2.5 percent will be covered by the listing agent’s co-op commission agreement, Podmolik wrote.
However, if no purchase is made under the original agreement, or the buyer makes an independent purchase, the agent keeps the retainer.
Also, for renters (because so many agents handle leases), a commission will be paid for the first year equal to one-half of one mont’s rent, and one-quarter of one month’s rent for the subsequent years on the lease.
Podmolik also writes that the next few weeks will be an observational period for Chicago real estate, as the fees are instituted. Will the fees become a new standard in the industry, as fees on bags did for airlines? Or will consumer backlash quash the measure, as what happened with debit card transaction fees?
What reception do you anticipate for the fees?