"TOM FEE" - A Real Estate Tool You Didn't Know You Needed, Enchanted Circle Home Seller Tip!
Are you selling your home in the Enchanted Circle area and worried about a deal falling through, forcing you back to square one after weeks of being under contract? There is a tool you may want to consider, and not a lot of sellers know about it. It's called a Time Off Market fee, or TOM fee for short.
What Is a TOM Fee?
A TOM fee is money paid directly to the seller when a buyer goes under contract. While it can be structured as refundable if both parties negotiate it that way, it is typically non-refundable. Think of it as a way for the buyer to have real skin in the game from day one.
How Is a TOM Fee Different From Earnest Money?
This is where a lot of people get confused, and the difference matters. Earnest money goes to the title company after the purchase agreement is signed and is applied toward the purchase price at closing. If the deal falls through, earnest money is distributed according to the contract, which can sometimes lead to disputes or even arbitration. In practice, buyers often get their earnest money back even after a property has been off the market for an extended period of time.
A TOM fee is a different animal entirely. It goes straight to the seller, not to a title company. That non-refundable structure gives Enchanted Circle home sellers a level of protection that earnest money simply does not provide.
How Much Is a TOM Fee?
The amount is negotiable. In practice, TOM fees typically range from $1,000 to $5,000, though the right number depends on the specific situation. Whether the fee is credited back to the buyer at closing is also negotiable and can be structured either way.
When Does a TOM Fee Make Sense for Enchanted Circle Sellers?
TOM fees can be a smart move in several situations:
- Longer closing timelines where the property will be off the market for an extended period
- Out-of-area buyers who need time to travel and inspect the property in person before fully committing, which is common in the Red River, Angel Fire, and Eagle Nest markets
- Competitive multiple-offer situations where a buyer wants to strengthen their offer and stand out from the crowd
Those are some of the most common applications, but there are likely many other strategic uses depending on the specific deal and what both parties are trying to accomplish.
One More Tool in a Good Realtor's Toolkit
A TOM fee is exactly the kind of thing a solid, experienced Realtor should know about and know when to use. It is not a magic solution for every transaction, but in the right situation, it can help protect your position as a seller and keep a deal moving toward the finish line.
If you have questions about TOM fees or anything else related to buying or selling in the Enchanted Circle area, give us a call. We love questions.
Swan Realty Inc. Red River: 112 West Main St. Angel Fire: 27585 Hwy 64 swanrealtyinc.com 575-613-4243