Which statement about retainer fees is TRUE?

Retainer fees are typically paid upfront as a way to secure a service or representation, often in the context of real estate transactions or other contractual agreements. This upfront payment ensures that the service provider, such as a real estate agent or attorney, is compensated for their expertise and availability, regardless of the outcome of the transaction. Paying a retainer fee can also signify a commitment between the client and the service provider.

In real estate scenarios, rather than being contingent upon a successful transaction or taking a portion out of the proceeds of a sale, the expectation is that the retainer fee covers initial services rendered and guarantees the availability of the professional's time and resources. The timing of these payments contrasts with other types of fees that may only come into play after a successful transaction has occurred. Understanding this structure helps clients plan financially for the services they intend to engage.