Every seller is a "For Sale by Owner." Every buyer is a "do it yourselfer." It is simply a matter of how much of the work in a real estate transaction is contracted to a real estate professional. From none to the entire transaction. Or in industry speak, from the stereotypical FSBO for a seller to a "full service" listing.
There are inherent issues with these extremes. A FSBO may be able to do the bulk of the work but, requires help with contract matters and getting their buyers to the closing table. The full service brokers and their sales associates want all or nothing; the way they have always done business. FSBO's are constantly preyed upon by full service sales associates waiting for them to fail in hopes of getting the listing. The full service brokers essentially offer a one size fits all sales commission approach without regard to the actual work required to meet a seller's objective. A typical agent's objective is to get the commission.
For buyers, the tremendous Internet resources available allow them to search neighborhoods for homes, check out schools, crime, weather, lenders and the like. Buyers using these resources to find their dream home make it pretty easy for a buyer's real estate agent to essentially close the deal. What is the financial benefit to the buyer for all the up front work? The buyer broker/agent typically takes what the seller is willing to pay.
Both of these may be oversimplifications, but not by much. Enter real estate consulting and the consultant. Here are great definitions:
CONSULTING:
A consultant is a professional that provides expert advice in a particular domain or area of expertise such as accountancy, information technology, the law, human resources, marketing, medicine, finance, real estate (1) or more esoteric areas of knowledge. (Wikipedia)
CONSULTANT:
Often a consultant provides expertise to clients who require a particular type of knowledge or service for a specific period of time, thus providing an economy to the client. (Wikipedia)
The key words are: professional, expert, knowledge, and advice.
The professional real estate consultant's first and foremost responsibility to a client is to use their experience and knowledge to give expert advice on real estate matters. A consultant isn't trying to "sell" a client anything. Just like in other consulting professions, a real estate consultant only expects to be paid for their time and expense. And, consumers can hire a real estate consultant to do as little or as much as needed and/or desired. For example, if a consumer can do the marketing for selling their home, maybe they just need help with the contract negotiations and working through contingencies to get to the settlement table. Or, a consumer can hire a consultant for marketing their home and hire a real estate attorney for the contract issues. A buyer can do their own home search and only engage a real estate consultant to assist with the purchase contract and closing details. There are an infinite number of possibilities in between.
Again, real estate consultants are experts in their field using their knowledge and experience to provide services and advice to clients on how best to realize the clients objectives.
What it really boils down to is empowering consumers with the ability to choose. Choose the professional you want to work with and the choice of what services you can buy and the way you pay for them. There is total transparency in the engagement that is typically lacking with other real estate business models. Consumers want what they want and want to know what they are paying for.
Real estate consulting is simply a better way to do business.
(1) Inserted for emphasis
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Interesting article. It's interesting to see how real estate professionals are adapting to the changes in the business -- consulting is one way to compete with the Internet.