Understanding Time Off Market (TOM) Fees in Real Estate

-Rob Swan, Qualifying Broker

What Is A TOM Fee Graphic with Swan Realty Logo

When navigating a real estate transaction, you may come across something called a Time Off Market Fee (TOM Fee). While not as common as earnest money or inspection

 contingencies, TOM fees play a specific role in fast-paced housing markets. Here’s what you need to know.

What Is a Time Off Market Fee?

A Time Off Market Fee (TOM Fee) is a payment made by the buyer directly to the seller. This fee compensates the seller for taking their property off the market while moving toward closing with a buyer’s offer.

Unlike earnest money, which is deposited into escrow, TOM fees are paid directly to the seller, often by personal check delivered to the seller’s home address.

When Is the TOM Fee Paid?

TOM fees are typically paid:

  • At the time of agreement, once the buyer and seller have signed a purchase contract.

  • After the inspection contingency is met, ensuring the deal is progressing toward closing.

This fee is usually non-refundable, meaning if the buyer backs out of the transaction, the seller keeps the money.

Why Do Sellers Ask for TOM Fees?

Sellers take on risk when they remove their property from the market. In competitive seller’s markets, multiple buyers may be interested, and the seller wants assurance that taking the property off the market won’t leave them empty-handed if the deal falls apart.

A TOM fee provides that security.

Do TOM Fees Apply Toward Closing Costs?

This part is negotiable. Sometimes, the TOM fee may be credited toward the buyer’s costs at closing, but in other cases, it’s simply kept by the seller. Buyers and sellers should work this out as part of their purchase agreement.

Key Takeaways About TOM Fees

  • A TOM fee is not escrow money.

  • It’s non-refundable and paid directly to the seller.

  • It protects the seller in a fast-paced, competitive market.

  • Whether it is credited to the buyer at closing is negotiable.

For more information about TOM fees or real estate in the Red River and Angel fire New Mexico feel free to contact us at any time and visit our YouTube channel for additional explainer videos and home tours. 

Swan Realty 575-613-4243