Retainer fee to start working with an agent?

[Alexandra Q.]

Hi there

So I signed up with DCReia (real investors) as a newbie investor because I wanted to learn how to get started and they seemed to have a good reputation in the area. I was told to pay a retainer fee because they wanted to make sure I’m serious.

So they were going to help me submit offers on properties in the MLS, ( which I wrote and emailed) and help me negotiate. They also offer a 21 day course to get you started with wholesaling. They have a 30 day money back guarantee which I used, as I didn't feel like their wholesaling program is worth the monthly basic membership of $150.

In all fairness though their courses and programs are really interesting if you want to learn how to do rehabs and commercial real estate. I would’ve definitely come back and worked directly with the owner, who seems like he knows what he’s talking about. But I don’t think that’ll happen after this experience!

In any case, I had to pay $500 to start working with an agent. I was told that the fee would be refunded back to me at closing, after we close our 1st transaction.

My first question is how common is it for agents to charge a retainer fee before they start working with you? Especially that I feel like they did not really do much since I was the one writing and sending the offers? Whenever I went out to view properties, they asked that I took a contractor with me so they could give him the code to enter the property.

They had me do my own comps and send it to them for review, as I was in “training mode”. They never went out to see a property with me except in one instance, when I was scheduled to view a property one morning and received a call from the agent an hour before, saying that he’d meet me at the property. Unfortunately the contractor was late and the agent got upset and left.

I needed to respond to a counter offer that day so I just called another agent who was available and we viewed the property together. This agent actually told me it was illegal for agents to require a retainer fee before they start working with you.

I’ve been reading different things online so is it actually legal to charge this fee, especially when I don’t feel like the service that was provided was satisfactory? They had me sign a release form the very next day after I paid the retainer, so the brokerage could release the funds to the agents. I think I should’ve signed that form at the very end of our first deal.

I really didn’t know what I was getting myself into when I signed that buyers agreement which mentioned this fee that was non refundable. And I didn’t even know what it was!

I spoke with the brokerage owner who kept telling me I will get the fee back, but that’s not what I was told when I contacted their customer service.

Is a retainer fee legal in real estate? If not, can I file some kind of complaint to try and get it back in this case?