The Consulting Times

This post arises from a letter I wrote to the facilitator of an excellent seminar I attended in December. On reflection, I thought parts of it might be useful to ACRE® colleagues (or others interested in Consulting) in helping to refine their articulation of the consulting mindset and value proposition.

An ACRE® can offer you both the traditional system of real estate services by commission as well a variety of other compensation models, so the most obvious answer to 'when' is always.  It's always ideal to work with an ACRE® as your real estate professional because with an ACRE® you'll have far more choices in how to receive the services you want and need!

To elaborate on the 'why', an Accredited Consultant in Real Estate (ACRE®) can offer some more cost effective solutions as you only pay for what you need, and ACRE®s understand that real estate is not a "one size fits all" business. It's like going to a car dealership to buy a new car, but if all they had were red sedans of the same make and model, you'd go to another dealership where they had more choices, right?

Sometimes you need to get some real estate help, you know it is going to take some time and effort for the real estate agent to do the job, and you'd actually feel better about it if you could simply pay for the service. Often, though, realty professionals are only paid by commission.  You can ask one to do you the "favor" but in turn your business (or referrals) will be expected down the road.  Not what you had in mind?  Time to find an ACRE, who will consult with you on your special project, charge you appropriately, and there will be no lingering sense of obligation for a favor done.

At the end of this month, we'll be embarking on a laboratory experiment: teaching the entire ACRE® course...to a live class.

I've taught consulting before ACRE® was born and have had several requests over the last three years which I've always put aside, mostly for lack of time. However, I received a request two months ago that changed my mind.

A couple of months ago, I posted on the members-only Coaching Exchange that it was our intention to upgrade the ACRE® course. Counsel Member Tom Pickering (our education guru) is working on this project; taking my "prose" and making it into a true course book, both because it needs to be, and because it will better ACRE®'s chances of being picked up for CE credits.

Once the new course book is completed, it is our intention to raise the bar in terms of the requirements to become an ACRE®. Clearly, in order to become a successful consultant, one needs to not just understand the model, but also have developed a strategic focus (I don't want to use the phrase "business plan" as it makes most agents' eyes glaze over) and most importantly, have calculated your hourly rates and any fee packages that you want to offer. Without this practical work complete, the theory is useless.

We are busy putting together a new, expanded, and more user friendly Consulting Times. Here are just two of the changes (that I know about!)

First, a new course site will be integrated right here on The Consulting Times. The current course site was set up before the TCT was envisioned and the two sites have never talked with each other, not only providing conflicting information, but making for a lot of extra work behind the scenes.

Well, the lazy summer is over and if you're like me and observe the Jewish holidays, autumn signals a new year and time for new beginnings. And we have huge changes coming to the ACRE® program. The Council members have been putting our heads together and I have been speaking with many of our ACRE® grads regarding what works, what doesn't, what needs to be changed, and what needs to be adapted.

Frankly, my goal has always been, not just to have an organization that promotes, teaches, and supports real estate consulting, but eventually have ACRE® become the BEST training program in real estate, bar none. But to reach that goal, we need to make some major changes and we have quite a few that will be coming over the next few months into the beginning of 2010. I'll be posting them in the next days and weeks.

If you've been thinking about registering for the ACRE® Program, please do not use these upcoming changes as a reason for putting it off. All new materials will be available through our Resource Library so you won't "miss" anything.

Remember, the changes we are seeing in real estate are not going to go away once the market recovers - rather, the changes are systemic in nature and if we are to survive, we need to heed their call. "On the road of life, there are drivers and there are passengers." It's time to become a driver!

ACRE® Jennifer Allen, author of "Sell with Soul" and (just out) "If You're Not Having Fun Selling Real Estate, You're Not Doing it Right!" recently sent out a fantastic email to her mailing list. I asked her if I could share it because:

1. It makes one think.
   
   
2. Jennifer's thoughts are at the heart of consulting where the fundamental question when dealing with clients should be "Is this in my client's interest or in mine?"

Hope you find it as thought provoking as I (and other ACRE®s) did:

...whether they are dealing with Health Care or Real Estate Services.

I was chatting with a friend of mine last week when he admitted that he had been without health insurance since he got out of college. Given that he's a real estate agent, that's not so surprising: as an independent contractor he's on his own regarding health insurance and many in our industry have simply taken their chances, especially when they are young and healthy like my friend Jack.

But as part of the approximately 15% of Americans who are uninsured, Jack has a window on a phenomenon that few of the rest of us ever see: what health services actually cost. You see, Jack was playing softball one Saturday a couple of weeks ago and sprained his ankle. As luck would have it, a member of the team was a physician and offered to take a look at the ankle at his office. After his ankle was wrapped up, Jack offered to pay him.

As I write this, the US government is embroiled in wrangling over how to overhaul our health care system. It seems to me that the system is not so much broken as it is hopelessly dated because as times changed, it never adapted. Our health care system was designed in years past, when you would hold a job for a lifetime. In that world, it made perfect sense to have your health care as a benefit of that job. But how many of us today stay in one job for our entire lives? And what about the growing legions of independent contractors and self employed entrepreneurs who have no access to a "company" plan? Health care tied to one's employment makes about as much sense in today's world as using a typewriter to write a letter.

I'm not in the book review business but I have to tell you that I just got through reading World Wide Rave by David Meerman Scott and it is an amazing book!

As I posted on Facebook last night:

I've been struggling with how to get my book and company more noticed without much in the way of funds, and after reading this book, I feel like I have a new lease on life and work. If you know me at all, you know I don't swoon over much but this book is incredible.

Like many of us ACRE®s, David challenges the conventional wisdom on how to bring online eyeballs to whatever you do. I found myself nodding my head and saying YES! out loud.

AND...if you want to get a taste of what I'm "raving" about, you can go to his site and download his free e-book that started it all: The New Rules of Viral Marketing: How Word of Mouse Spreads Your Ideas for Free.

But, it gets better...

Does consulting tend to impact commission-based business in a positive way - or does it stay fairly level, but with added income from the consulting side and in that way does it help with cash flow and smooth out the highs and lows of commission-based income?

AP - New York

Let's say I earn $450 in consuting fees. Would I receive the same agreed upon % that I receive in a commissioned base transaction? I am assuming that the check would be made out to my Brokerage firm.

DJ - Illinois

Did you have an attorney draw up your forms and documentation? What part of this does the broker of record play in the process? If any? What pitfalls do you recomment that we watch out for? What are the absolute "must steps" that are to be taken?

LH - Texas

What if you like your brokerage but want to do the ACRE concept?

GC - Washington

I've been going back and forth now on your business model. I was discussing it with my brokers. They claim that If I do a CMA, a consultation, etc.. on a fee based per service model, its considered a transaction and has to go through my brokerage? Is this the case with you ACREs? I'm still being charged the transaction fees, E&0, etc.. which would put me upside down on such a model.

Can you shed some light?

AS - Washington

There has been a lot of discussion of late on real estate blogs regarding buyer agency and the plusses and minuses of working in a buyer agency-only firm (Exclusive Buyer Agency) versus practicing buyer agency in a brokerage that also includes seller agency.

The main theme around these threads is how to get the consumer to trust, and thus demand, their own representation. The proponents of Exclusive Buyer Agency argue that the problem of trust would be eliminated if the public could understand the advantages of having an entire office that just practices buyer agency. Practitioners of buyer agency in traditional brokerages (those that have both buyer and seller agents in the same firm) argue that with the advent of designated agency, practicing buyer agency in a traditional firm no longer presents a conflict of interest.

I would like to know your thoughts about working as a consultant in a traditional brokerage. Does this course help brokerages to adapt to these new businesses practices? As for myself, I am completely sold on consulting, but would like to know more about how other real estate firms are adopting the new models.

HL - Texas

The consulting business interests me greatly but I have a question: how is the ACRE course different than the C-CREC course that is a NAR recognized designation?

MB - Hawaii

Despite years of advertising by the National Association of REALTORS® and an increasing number of required ethics courses, most recent polls continue to show real estate agents at the bottom of the consumer trust list behind insurance agents and barely beating out stockbrokers. When asked in the most recent Harris Poll "If you were getting professional help or advice from each of the following, how much would you trust them to give you advice which was best for you?", only 20% of respondents indicated that they trusted the advice of real estate agents completely.

But why in the world should this surprise us? As long as we insist on being paid exclusively by commission, what we are asking the consumer to believe is that we can provide objective counsel that is in THEIR best interest when our compensation is wholly dependent on an outcome that we're advising them on!

The news out there for real estate continues to be bleak. Falling home prices, long market times, falling sales, credit issues for buyers, the list goes on. If you've been in the business awhile, seeing the ups and downs, you might be trying to hang in there while the "newbies" who jumped into the market in the last five years are steadily abandoning real estate for greener pastures.

But sometimes, even for us veterans, it's hard to keep up our confidence. Our industry is going through tremendous challenges with changes that aren't going to disappear once the current market recovers. That's because the changes we are seeing are systemic in nature, challenging our most basic real estate assumptions and practices.

I was introduced to ACRE® while in FL by Paula Bean. I was with Keller Williams in Cape Coral, FL but they were not supportive of Real Estate Consulting, so I never pursued your program. I am now in MA and interested in moving forward with it. My question is--who do I hang my license with? Once again I'm finding resistance with the local Keller Williams. Do you know of anywhere in the area that will let me work for them as a Real Estate Consultant?

GB - Massachusetts

This past week, a real estate agent opined in her blog that when agents make a practice of asking a buyer for a pre-approval, or even request that they sign a buyer agency agreement to show a commitment on their part, that this is a sign of "disrespect" to the consumer.

She further went on to say that she herself has used the services of real estate agents in the past and if any of them had asked upfront for evidence of her financial qualifications or willingness to make a commitment, she'd have found someone else who showed her the respect she believed she deserved as a consumer. I read her post and was frankly, speechless. And when I found at least two dozen comments from other agents on her blog exclaiming what a great post she made and how they agreed with her a hundred percent, I was even more so.

Recently on the ACRE® Coaching Exchange, our coaching platform for ACRE® graduates, we had a very interesting discussion about where our value today lies as agents. It seems that in the tough market that we are working in, many agents are competing for listings by charging less than the competition and requiring less commitment in the way of an exclusive agency contracts with buyers.

This is so sad because you can never compete on price and stay in business. No matter how low you go, there will always be some desperate soul who will charge less. And when you don't require a commitment from those you work with, you only underscore that your time, experience, and expertise has no value.

If you are out in the market trying to make a living in real estate, I don't need to tell you that our industry continues to go through tremendous changes that are challenging our most basic of real estate practices and assumptions:

• Revolutionary growth in technology which continues to transform our industry.

• A huge consumer backlash that, contrary to conventional wisdom, is not just challenging our commissions but challenging our very value as professionals.

• A growing bewilderment by both the consumer and ourselves over what exactly our role as real estate professionals today is supposed to be.

Yet, in the midst of all of this, when we clearly need some new direction, it seems like all we're getting is the same old advice from the same pundits that have been around forever saying the same things like: