Because real estate listing agents don't get paid until a sale closes, the deferred payment option keeps coming up. Keith recently ask the following:
I've read lots of posts about business models...pay up front, pay at close, pricing, etc. None of the pay at close really seems to address a combo - pay a bit when I shoot...remainder when it closes. There were posts about premium pricing but nothing about pay both. I'd propose $50 or 75 up front + $200 - 300 at close. Providing my adequate compensation. I still get 'something' up front to pay part of expenses. Paying at close is the same as home warranty - pay a small application fee...when home sells, $300 fee comes out of proceeds and new owner has 18 mo warranty policy with 3rd party. Thoughts about this?
We've discussed deferred payment here a number of times and the overwhelming majority believe it is a bad idea. I don't think that partial payment up front changes anything about this apporach. Here are some points that you should consider:
- Successful agents have enough income that that can pay for their marketing costs up front. In the long run, photographers are better off working for successful agents that pay up front.
- Any photographer doing this kind of closing payment type of arrangement should get the contract in B&W and even have the payment listed on the closing documents so your fee must legally and automatically be paid. The problem is, the photographer doesn't communicate with the Escrow officer who sets up the closing documents. It has to be left up to the listing agent.
- Typical listing agents close far less than 100% of the properties they list, so the payment on closing arrangement is extremely risky for the photographer.
- Doing this kind of thing means you have to take time, to track the sale of the home. Not something that most photographers want to spend their time on.
This kind of risky arrangement and a lot more work than is necessary. In the long run I doubt it is worth the extra work it requires. The photographers shoot price is small in the overall scheme of selling a property. It is not unreasonable to expect to get paid up front. Has anyone had a positive experience deferring photo shoot fees this way?