Why would an agent pay a monthly fee when listings come in lumps?

Question

I'm mostly on the notes and paper side and understand almost none of this, but a thread here mentioned agents on monthly retainers for marketing and I stalled on it.

An agent's income shows up when a deal closes. Could be three closings in a month, could be none for two months. So why would they agree to a fixed monthly marketing bill instead of paying per listing, where the cost lands at the same time as the work and roughly tracks the revenue?

I can see the provider's reason for wanting monthly. I can't see the agent's. Unless the answer is that monthly buys something per-listing doesn't, like the brand stuff that happens between listings, and that's the part that actually gets you the next listing.

renee_dubois · Answer

You landed on it yourself in the last paragraph. Per-listing work is spend that follows a listing you already won. Monthly is spend aimed at winning the next one, and it can't be per-listing because there's no listing yet to attach it to.

I think of it like my buildings. Turn costs are per-unit and they show up when a tenant leaves. The reason my units lease in nine days instead of thirty is stuff I paid for on a schedule with no vacancy in sight. Different budget line, different logic.

The uneven income is real though and it's why a lot of these retainers die. An agent signs in a good quarter and cancels in a slow one, and the provider gets churn that has nothing to do with their work quality. Any provider selling monthly to solo agents is underwriting the agent's cash flow whether they meant to or not.

Why would an agent pay a monthly fee when listings come in lumps?

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