FEATURE Set up fees Words | Francine Carrel
You want a what up fee?
Increasingly, agents are asking developers for set up fees when taking on a new project. A fair practice to help with initial marketing, or are they having a laugh?
he basic developer/ agent relationship is well established. An agent will take on a development and, with a varying amount of back-up from the developer, sell the real estate on to a buyer. The agent will then collect their commission, however much that may be, and everybody leaves happy. Right?
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Well, apparently not everyone is satisfied with the status quo. Increasingly, agents are asking developers for set up fees, also known as ‘marketing fees’. Put simply, this is a lump sum of money
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to cover costs such as admin and sales work – and, perhaps more importantly, to give the agent a little security in the event that the development simply won’t sell. The impetus for the new charges has come from China, where they are common, but their use in the rest of the world is controversial. We spoke to three experts coming at the subject from different angles, who were happy to offer their views on set up fees.
Justin Field, Senior Partner of agent Amazing Austria Property (
www.amazingaustria.com), thinks
Our thanks to the three contributors who all happily and openly gave OPP information for this article. If you’d like to contact any of them, their details are below – or for more information contact
editor@opp-connect.com
Justin Field: Amazing Austria Tel: +44 1626 770419
Garrett Kenny: Feltrim International Tel: +1 877 968 7221
Robert Gavin: Property Horizons Tel: +44 208 144 5957
that the practice is entirely sensible. “I feel that to get the best possibility of sales, a developer needs to make a contract with an agent and pay set up fees,” he said. “It is no different for the developer and possibly cheaper than him having to employ a sales and marketing manager... and that route gives you no guarantee of sales either!” Robert Gavin, CEO of Property Horizons (www.
propertyhorizonsgroup.com), holds a different view: “As both an agent
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