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Negotiating Agency Shooting Contracts

Published: 17/08/2017
By: larry

Eric in Southern California says:

I have been discussing possibly being a preferred vendor photographer for the local Keller Williams office and they proposed a $20 fee for every client they send my way. Is this sort of thing normal? Also should I expect to be signing a non-compete agreement where I would not be able to offer my services to other agents?

No, you DO NOT sign a non-compete agreement with such an agency! Never sign non-complete agreements!

A number of years ago, Thomas Grubba in Oakland and Mike Miriello in Virginia negotiated agency contracts with real estate offices in their area and did a post on what to consider when setting up such a relationship. Here is their advice:

What Is an Agency Shooting Contract?
This is where a real estate photographer enters into a contract with a real estate company to shoot some number of listings per year. In return for a guaranteed level of business from the agency, the photographer gives the agency a discount on the price of each shoot. This kind of arrangement is a win for all parties. The photographer gets a guaranteed level of business, the agency raises the level of their marketing and the agents get a price break on good photography for their listings.

Agency Shooting Contracts Are Not for Everyone
I think before you try getting an agency contract, you need to be in demand by top agents. Your demand in the office you are negotiating with will help you in the negotiation. On the other hand, if you already have a large customer base and you are already shooting 400 or more properties a year, then an agency contract may not for you. With these kind of accounts, you probably need someone to back you up so you can take time off now and then.

Key Items to Negotiate

  1. Price: The agency is going to expect a discount of between 10% and 15% off of your established shoot price in exchange for a guaranteed number of shoots.
  2. Minimum Shoots Per Year: Look for agencies that are going to give you a minimum of  250 to 300 listings a year
  3. Exclusivity: Some agencies may want you to shoot only for them. This consideration should decrease the discount you give them.
  4. Permissions: Don't give away your copyright. Make sure it's clear that any use of the photos outside the contract needs to be approved by you. That is, if the agent wants to give the architect, builder, stager or home buyer photos, they have to come through you and should expect a licensing fee charged to the appropriate party.
  5. What's Expected of Agents: Thomas says, "The hardest part of a contract is managing the agents and scheduling. Having a well though out plan in advance is key to making it work.
  6. How Billing and Payment Works: Set the contract up so you don't have to nag agents to get paid. One way is to collect upfront. Another way is to bill the agency once a month and they pay you directly. The agency can then bill the agents directly and take care of collecting from them.
  7. How Photos Are Delivered: You need a fast efficient way to electronically deliver photos because of the high volume you will likely shooting for in a contracted situation.
  8. Scheduled Rate Increase: Once you establish your rates, it's difficult to raise your rates. Thomas recommends specifying Cost of Living Adjustment plus 5% or a rate increase per year that you are comfortable with. If this is not agreed upon in the initial contract, it will be difficult, if not impossible to raise your rates without jeopardizing the contract.

General Negotiating Advice

  • Mike's Advice:
    • Negotiating a contract has less to do with you, and more to do with external variables than you would think.
    • Small agencies will have the money to contract with you, but they may not have enough volume. Look for agencies that will give you 250-300+ listings a year.
    • You are in the driver's seat when it comes to writing a contract. If you write one from scratch with the broker/general manager, you're better off for it.
    • While negotiating price. be sure to give examples of costs like professional camera gear, lighting equipment, a reliable computer, specialized software, and travel. By doing this, it highlights the fact that you aren't being paid just for your "eye" or "creativity"; you're producing a product.
  • Thomas's Advice:

The ideal contract is where there is a compulsory aspect that every property over a certain price will be photographed. That will depend on the area, but let’s say over $1 million. Everything under that price, the agent has the choice to have it photographed or not. The agent will need to give at least 3 days notice to set up a shoot, and the images will be turned around the next business day by 12 noon. A standard shoot is $xxx and generates up to 12 images and an estate shoot is $xxx (double the standard shoot rate) for up to 24 images. These designations are based upon a) How big the property is, and b) How many images an agent wants. For example, a 4,000 sq. ft. house automatically falls into the estate category even if the agent only wants 12 images. If an agent wants the 24 images, even for a 2,000 sq. ft. house, that also goes into the estate category.

Thanks to Thomas and Mike for sharing all their insights in this area.

7 comments on “Negotiating Agency Shooting Contracts”

  1. If the KW office wants you to pay them $20 for each booking, NO. It's a pay to play scheme that's just lining the broker's pockets in addition to their cut of commissions and desk rent. Get to know some agents in that office and see if they are contractually obligated to only use those on the "Preferred Vendor" list. Also find out if the preferred list is limited at all or just a kick back machine. Some offices I've heard want a periodic payment to be on their list. Chances are that the agent is allowed to hire whomever they please for marketing materials. A good broker will know that if their agent's listings look great, it reflects back on their brand and reputation in the area.

    If you get approached to be exclusive to the broker's office, definitely schedule the time to sit down with them and see what their goals are and if those goals dovetail with yours. I would suggest not talking just about the amount of annual business, but monthly so you aren't at the end of the year with no jobs coming in and working 7 days a week in the spring and summer. You can also suggest a probationary period where you set minimum guaranteed bookings by the week or two weeks. You want to keep from boxing yourself in with a client that talks big but doesn't have the number of homes to sell that would keep you earning enough money. You also don't want to get down to the last couple of months of an annual contract and find that given what you have been shooting, there is no way that they are going to make the agreed upon minimum. If they are way under, you could wind up having a fight to get them to make up the balance.

    If you are working for an entire office, nail down payment terms. Agree on who is allowed to call and book your services and what limits they have before they need to go through the agent manager/broker. Create a policy on cancellations, missed appointments, if you are going to move furniture or not, what to do if a home is in really bad shape (make sure you have a stated default if you can't get through to the agent or broker in a short amount of time). The above is really just standard Terms and Condition items, but now you may be doing a lot more business and more money is on the table. You don't want a check held up because there was a misunderstanding about something.

    If you are negotiating a discounted price, make sure you place limits on travel and create a clause that allows you to raise your prices if something like gas rises above a certain amount or a city suddenly requires you to hold a business license and wants a stack of money. Renegotiate your pricing each year.

    Anticipate the office getting much busier. Exclusivity works both ways so make sure you are the only photographer they are using or maybe just the only one in your preferred area if it's a big office. If you can get to every job within a week when it's busy, you get the work. Lots of agents I work with wind up with Thursday or Friday appointments that they want a fast turnaround on to have the listing up on the weekend. You could wind up completely out of time slots on those days and be totally dead on Monday and Tuesday. You don't want the Broker bringing in competition. Think about how you will formally write that up and if you want an out on the contract if they sign up an additional photographer when you feel that aren't being used to your limit. Thomas bring up a good point in making sure you are getting the premium homes. While they should be good money since they will generally take more attention to detail and should take more time to completely nail, they are often where you are going to get your portfolio material. Not always as even rich people can be right slobs, but most of the time they are decorated much nicer.

    Exclusive is only one way to go, but if an office wants a good rate without enough work to keep you busy full time, perhaps they can pay you a weekly retainer and you agree to photograph at least X homes for the money during that week and if they don't use up those slots, you keep the money. If they schedule more jobs, maybe you discount a little more.

  2. All great points above but the first and most important question to ask the broker is who pays for the photos, you or the agents? If the answer is the agents, then how can a broker guaranty any volume since it's the agents money and if they are paying, they are likely the ones who decide who they use.

    In an agent paid scenario, the broker can have some influence by promoting your services but it's still not a guaranty of volume. What you have is a license to market your preferred vendor status but agents still make the decision. So, you are actually discounting your services or providing back end incentives to the broker in return for a what? The ability to say you are a preferred vendor?

    If on the other hand the broker is paying for the photos or subsidizing the cost in some way shape or form, then the broker has some control. Agents could save money by using you as apposed to some other photographer the broker isn't paying for. Even in this scenario there will be some agents who have their preferred photographer and will continue to use them and pay out of their own pocket. It is however a much better arrangement for you since the agents have a financial incentive to use you and as we all know, agents are very cost conscious (trying to being kind here 🙂

    As far as exclusivity, if they want you to be exclusive to them it would only stand to reason you'd want them to be exclusive to you... Here again, the only way they can give you exclusivity is if they are paying for the photos, right? Even if the broker is paying and as mentioned above, they still can't guaranty exclusivity on their end because there will always be agents who want to use someone else even though their are financial incentives to use you. Further, if you are going to give them an exclusive deal, what about your other clients in the exclusive market you are doing business with now??

    Based on what you've said above "preferred vendor", I'd bet the agents are paying for the photos and therefore the broker can't commit to any volume or being exclusive to you so why would you commit to be exclusive to them? If anything you could give them the same preferred vendor status and tell them that means they get preferred scheduling 🙂

    As far as the $20 kick back, that's up to you but it goes against every moral fabric in my body yet it is somewhat common ask. Either that or paying some amount annually to be a preferred vendor. In either case, what are you getting in exchange for the $20 since they can't commit to volume?? If you decide to go the kick back route I would demand that you get something tangible in exchange for it like being invited to office meetings to be introduced to agents and present your services or them sending emails to their agents on your behalf etc.

    Bottom line is price, quality and availability is what is going to earn you the agents business, with or without the brokers help. Yes the brokers help can be influential but is it worth $20 to you??

  3. In California, a real estate broker is a bit limited by what they can require of their independent agents. With just a few exceptions, agents are not employees of the broker and must be allowed freedom to act on their own. Of course, if the agent is not representing the brokerage professionally and appropriately, the broker may end the relationship. I do not believe a brokerage can require an agent to use a certain photographer. The broker may incentivize the agent or subsidize the cost of the photography though.

    Side note - I am sure a lot of the photographers who post here have been hired to re-shoot properties originally shot by the broker's "preferred" or "in-house" photographer. I have as well.

  4. The three questions posed here are somewhat vaguely worded and really lack some important details. Without more, I wouldn't even attempt giving Eric an answer.

    I will say that it all seems suspiciously slanted, with little to no benefit for Eric. More details please.

  5. @Gerry Zagorski - absolutely right on! Your points are very well made. Keller Williams, or KW as they like to be known, is the only outfit that has stipulations for RE Photographers. They've been offering preferred status to photographers for years with a $500 upfront fee which entitles the photographer to listings in their bulletins, access to their card-exchanges/meetings, and in-office referrals. They also refuse to accept office solicitations from photographers ( ie: dropping off literature for agents, etc) who aren't on their preferred list.

    Last year we had an interesting conversation with a KW agent at her open house. She expressed an interest in our photo services but indicated that we would have to sign a waver that turns all rights to all photos we shoot over to the agent and KW. In which case, we would not be able to use "our" photos in our website or anywhere else, and who knows where they would wind up. We've shot numerous jobs for other KW agents and never encountered this before. According to this agent it was a new rule put in place by all KW offices. We still shoot for KW agents and never encountered this with any of them. Go figure.

    As for agency shooting contracts, they're fine if the photographer is a KW agent. We've run into this on numerous occasions, office photographers who shoot for "the office" at a very reasonable price. However, if you are a professional real estate photographer and value your business DON'T get involved in any of this nonsense. There are plenty of agents out there, KW or otherwise, who welcome the opportunity to hire a professional photographer on his/her terms without any ridiculous stipulations. Afterall, you are the professional and you set the standards for your clientele. If you do good work and offer personalized service you should have plenty of business.

  6. In addition to the other good reasons for not signing anything with an agency: In my experience, I work with individual agents not companies. It is very common for agents to "jump ship" and switch brokerages at will. This happens constantly in my market. And when they do, they are still my clients at what ever brokerage they decide to hang their license on. So what value does an agency contract really provide to a photographer? Ignorant Rights grabs, reduced fees and a path to being a low paid employee with no benefits. Sounds awesome! Or you can run your own business and decide how profitable you want to be and possibly grow your business well beyond the strange world of Real Estate!

    Being on a list of preferred vendors can help get your name out there, but that can be done by yourself by doing good work and pounding the pavement every once in a while. The good agents will seek you out when they see good work and the real players in the real estate world will not let their brokerage dictate who they work with or the terms of photography. I prefer to have 20 great clients that respect my business and appreciate the service I provide than a having my name on a list so every low baller in the ever-growing conglomerate is directed to call me. Seriously, if you do good work, who has time to service all of those people anyway? Quality over quantity

    More Importantly:
    Copyright and licensing in the professional photography world has been well established long before the real estate world needed the quality imagery that a professional provides. Like every other business that works with photographers and other artists, they have to learn and understand the terms and established practices of the photography industry. It should not be the other way around. They are the new ones at the table, not photography. I don't imagine a brokerage dictates how every other contractor in their business sphere does business. (Builders, plumbers, architects, stagers etc.) Photographers should not have to compromise the fundamentals of running a profitable photography business to accommodate this "new" client and their lack of understanding.

    Instead, photographers who intend to be in business in whatever aspect have a huge responsibility to understand their own business and industry practices. This is far more important and valuable than being able to take pretty pictures. It is up to the photographers to educate themselves so they can then educate their clients so these ridiculous "contracts" don't get foolishly signed or the idea of them perpetuated.

    The brokerage is not your client.

  7. An exclusive contract with a brokerage works when the broker is paying for the images. There is an office near me that provides the photos for their agents listings, but they are getting what they pay for. I have not been able to crack that nut as the agents are as cheap as they come and would rather have free than something better than they are getting.

    How does a brokerage guaranty the number of jobs? Simple, they pay you for the difference between the number of jobs you perform and the minimum that they guarantee to get the discounted price you are offer them or to keep you out of the hands of their competition. Get it in writing and don't go more than a month or two out before settling up. If they are 50 jobs short at the end of the year, they aren't going to want to pay up or they will pay up while trying to ignore the sting. If you settle up on a monthly basis, the same miss is a couple of jobs most of the time and that is easier for them to take. It's like getting coffee at Starbucks. A few bucks each morning is something you can ignore, if you had to settle a tab for all of your coffee at the end of the month, it might really hurt and cause you to start brewing your own coffee instead.

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