http://www.theconsultingtimes.com/blog/ The Times Community provides consumers and real estate professionals a forum to exchange views and gain vital perspectives on an alternative to buying/providing real estate services. en Copyright 2010 Mon, 15 Feb 2010 15:12:54 -0500 http://www.sixapart.com/movabletype/ http://blogs.law.harvard.edu/tech/rss Randy Carson says: Truly a well-thought, articulated and GREAT post Ron. Thanks, Randy Carson Topic is "Paradigm shift" http://www.theconsultingtimes.com/blog/archives/2010/01/beware-of-the-elephants.html http://randyworksforyou.com Paradigm shift Thu, 14 Jan 2010 08:30:59 -0500 Mollie Wasserman says: I couldn't have said it better Paula. Folks, Paula doesn't just call herself a consultant, she's been doing it for years and it shows in this post. That's why we say, "You now have a Choice... Choose an ACRE®. Topic is "Now you have choices" http://www.theconsultingtimes.com/blog/archives/2010/01/why-when-would-a-consumer-pref.html Now you have choices Wed, 13 Jan 2010 09:27:30 -0500 Paula Bean says: Awesome post MPH! I particularly like the part about foreclosure. In Florida we are flooded with peole trying to do loan mods, short sales - ANYTHING to avoid foreclosure. It makes up about 80% of my consulting work because why would an agent help you with a loan modification? There is no sale involved. Stay tuned for more news on this from us. The consumer needs to be informed of the many choices they have when needing anything real estate related. Topic is "Now you have choices" http://www.theconsultingtimes.com/blog/archives/2009/11/sometimes-you-need-to-get.html Now you have choices ACRE consulting fee valuation Sun, 29 Nov 2009 11:45:11 -0500 Randy Carson says: Looking forward to seeing the new course and content Topic is "The ACRE course" http://www.theconsultingtimes.com/blog/archives/2009/10/change-2-new-course.html The ACRE course Mon, 19 Oct 2009 10:51:30 -0500 Randy Carson says: All the best on your upcoming LIVE training! Topic is "The ACRE course" http://www.theconsultingtimes.com/blog/archives/2009/10/change-3-the-acre-coursetaught.html The ACRE course Mon, 19 Oct 2009 10:47:50 -0500 Paula Bean says: I have sold real estate since 1979 and never once have I thought we should charge for our services by a percentage amount. If you think about it, unless you have a unique property that will cost more to market, there is nothing else that matters when selling a house for a specific price. It costs me the same to market a $200,000 house as it does a $500,000. house, so why should the consumer pay me more? I like the idea of total transparency. It is a little like going to the grocery store. You can buy brand name items or you can buy generic. Now Advil is still ibuprofen, so is the generic less costly brand. The difference is the price. When selling or buying a house, each situation is unique. No house sale is the same. You have people who have to sell quickly for reasons such as foreclosure or perhaps relocation. You have people who are retiring, and want to downsize or families who've had more children and need a bigger house. No situation is the same. I like to be able to consult with these people and based on their unique and specific needs, advise and consult with them what I think their best options for the least amount of money would be. One day in the near future, I see real estate being conducted soley in this fashion. If I were going to buy or sell a house, there is no reason to pay a percentage of the sale when the marketing costs on my end are basically the same no matter what the price of the house is (with certain exceptions as mentioned above). Real estate has changed much in the last 30 years and I feel that if I am representing a client I owe allegiance to that person. Why is it that we get paid by commission then? Why is it that commissions have to be so high? Because of all the houses we try to sell that don't. It's risk aversion. Some people might like that, others not, but at least if you use an Accredited Consultant in Real Estate, you'll know what is your best option and you'll feel more comfortable that you have someone looking out for your best interest without the money being a factor. CPA's charge a fee for their service, and it does not depend on how much you get back from Uncle Sam. The same thing with Doctors, they don't get paid only IF they cure you. Why should real estate services be any different? Topic is "News" http://www.theconsultingtimes.com/blog/archives/2009/08/when-a-model-no-longer-worksit.html News commission fiduciary sales model Mon, 10 Aug 2009 14:39:11 -0500 Judi Bryan says: By offering the consumers CHOICE in which services they receive and how they are paid for, the true real estate consultant is providing the transparency in the process that has been sorely lacking. It's that very transparency that will, in my opinion, be at the core really elevating our industry in the consumer's mind! Great article, Mollie. And great book, by the way. After reading it myself it occurred to me that "Ripping the Roof Off Real Estate" should be required reading for consumers and agents alike! While very "easy reading", it gives consumers and agents alike great insight into our industry and public perceptions. I highly recommend it!]]> Topic is "News" http://www.theconsultingtimes.com/blog/archives/2009/08/when-a-model-no-longer-worksit.html News commission fiduciary sales model Tue, 04 Aug 2009 08:25:59 -0500 Sherry Lynn Bell says: Mollie, this is a great article and so true. I agree with you about the payable only commission doesn't fit in today's reality. I am currently trying to get my new agents into training so they can see that consulting is a huge benefit. My clients are becoming so appreciative and I'm starting to see referrals. I'm proud to be a consultant and even prouder that it helps make everything ethical. As more clients and the general public see this model and realize that the consultant doesn't have conflicts it will become the way people go. Topic is "News" http://www.theconsultingtimes.com/blog/archives/2009/08/when-a-model-no-longer-worksit.html News commission fiduciary sales model Tue, 04 Aug 2009 07:54:22 -0500 Paula Bean says: Great comments above. I'd like to add to Brent's comment about the referrals you get from offering consulting. I've been doing consulting for 10 years, and sometimes the clients choose commission over consulting. I've had people take their credit cards and get a cash advance to pay me. Another benefit in this particular market are short sales and foreclosures. I am in the process right now of doing a short sale and the lender agreed to the consulting method since their loss would be lower, and they pay all of their other vendors up front, so why not me in order to not take so much of a loss? I am going to be approaching many lenders with this idea to see if they would like to do the same. I am looking for a great negotiator to use as well so I don't have to spend the time it takes to process a short sale transaction. This means than if I can get several lenders who will use me for consulting I could dramatically increase my bottom line and help clients who would otherwise be foreclosed on. As Brent says, they will then need help finding a house, and the referrals that come after because you helped them in a way that a commission only agent could not. If you give options and choices, have the best interest of the client at heart, you'll never lose business. My personal motto has always been 'if you put the people first, the money will follow' and for 10 years, this has been true for me. Best wishes! Paula Bean Topic is "Ask the ACRE Council" http://www.theconsultingtimes.com/blog/archives/2009/04/how-does-commissionbased-busin.html Ask the ACRE Council Fri, 24 Apr 2009 16:37:17 -0500 Brent Fraizer says: Hi AP, Good question. In my experience, using the Consulting approach versus the one size fits all approach, you accomplish a few things: 1.) Multiple avenues of income 2.) You offer more choice, flexibility and value than your competitors 3.) You have the ability, if you choose, to be paid for actual work performed vs being paid based on an outcome. For example, many of my clients opt to pay me either up front (I provide a discount if they choose this option) or in installments (I charge a slight premium over the up front payment plan but in BOTH scenarios, they save more than they would if they chose a traditional commission approach) I always show them the cost of services provided compared to typical commission rates. Some clients don't have the ability to pay up front or in installments. That's fine, we can do a traditional commission plan. Some don't have enough equity to use a traditional approach. That's fine too, we puruse the options mentioned above. However, the majority of my clients prefer to pay up front in exchange for the savings they achieve. Now, to your question about bottom line impact. I typically get paid up front or in installments for my services. My client in return receives a discount over typical commission rates. Would my bottom line be higher if I only used a traditional approach? I don't think so, because I have a larger client pool due to my flexibility. Ex. One recent client in foreclosure needed assistance finding a rental property. I charged a fair price to assist with the search. She then asked me to assist with the sale of her home in foreclosure. She then referred me to other clients because of my flexibility. This couldn't have happened if I was a traditional, commission only agent. You have to also consider the time value of money. (A dollar today is worth more than a dollar tomorrow) I'm fine receiving less than the typical commission when I'm paid up front or in installments. Bottom line, again, I have a larger potential client pool. I have the ability to help those who can't or don't want to use a traditional approach. I have the ability to use a commission only approach. This creates a strong USP. All of this has a positive impact on the bottom line. If we think long term, how long can the traditional approach survive as it looks now? We're already seeing a demand for reduced commissions. In addition, public perception of Realtors is low. (A recent Harris Online Interactive Poll of the publics perception of prestigue of 23 professions and occupations showed that Realtors ranked last under actors, business executives and stock brokers, dead last) Combine this with stagnating or declining home values and the consumer's demand for change, and the need to rethink our approach is obvious. Our bottom line will certainly be impacted if we don't find new ways of doing business. All the best, Brent Topic is "Ask the ACRE Council" http://www.theconsultingtimes.com/blog/archives/2009/04/how-does-commissionbased-busin.html Ask the ACRE Council Fri, 24 Apr 2009 13:32:51 -0500 Judi Bryan says: A Tale of Two Seafood Shops - and I invite you to read it. It very clearly puts the challenge of offering only a single option to the consumer versus offering choices into perspective. On the one hand, if you only offer "full service full commission" to the consumer, yes, you're guaranteed that IF they hire you and IF their property sells (or IF they purchase a property through you) you'll receive that commission. However, there are certainly other consequences to offering the consumer only one way of working with you. For example, if a consumer "believes" that they either don't want (or can't afford) a full service, full commission transaction, and if that's all you offer, they simply take their business elsewhere. You never have the opportunity to talk with them in the first place. And there certainly is a certain percentage of people who would never, under any circumstances agree to "full service, full commission". However, what often happens is that consumers who think they want an alternative to "full service, full commission" ... and that alternative could be any of a number of options, like MLS-only, or fee for service, or a limited bundle of services for a particular fee, etc. ... when they are truly informed as to why commissions are what they are, in great part because of deferred risk, and they are given the opportunity to reduce that risk by sharing in the up front fees, they often decide the commission approach may in fact be best for them. In the past they've had very few options that have afforded them the potential of avoiding that commission ... and for the most part those options have fallen gravely short of what's in the consumer's best interest. You and I both know that what a consumer "pays" is not necessarily what it "costs" them! Does it happen sometimes that, by offering choices to someone, they opt for a fee for service alternative rather than full commission, when they would, if they had no choice, have paid that commission? Of course it does - sometimes! But think about this ... the agent is BEING PAID FOR SERVICES PROVIDED more or less as they are providing them! As long as you've priced your services to cover your costs and provide a good profit, how can that be a bad thing for anyone? I hope this helped to answer your question. From what we've heard from our ACRE agents, being able to provide additional services for a fee does bring in some additional income. Being able to OFFER alternatives to consumers also brings in consumer's that likely would have never contacted them in the first place. Both of these are good for their business.]]> Topic is "Ask the ACRE Council" http://www.theconsultingtimes.com/blog/archives/2009/04/how-does-commissionbased-busin.html http://www.TheConsultingTimes.com Ask the ACRE Council Fri, 24 Apr 2009 11:49:54 -0500 Judi Bryan says: These are great questions! First of all, none of us are attorneys, and certainly we would recommend that whatever you use, it should be run past your own broker and their legal counsel. That being said, what the majority of our members who have shared their experience on this subject have said is that they use their regular listing agreements, buyer representation agreements, etc., as their foundation, and then add an addendum to it that spells out anything they will be doing that differs from what is included in their regular brokerage agreements. For example, if the agent and the client decide that the client will be providing a good "up front" fee which reduces the risk to the agent, and in exchange would ultimately be responsible for a reduced commission, an addendum spelling out that agreement would be created in easy to understand language, and on the brokerage agreement, where the commission would normally appear, they could place a simple "see Addendum A attached". One of the wonderful things about the ACRE program is that upon completion of the course and subsequent test, our members have free online access to our very robust (and growing) library which includes samples of such things. We have all sorts of tools available for marketing your consulting services, we have webinars designed to help with dialogue (it's one thing to understand the concept...for some people, putting the concept and how it all works into words for their prospects and clients is a different matter altogether...these dialogues help with that). Regarding the "must dos"...the library helps with that as well. One of the first items on the list is to decide how you want to package your services and which services you want to provide, as well has how much you want to charge for them. We also have tools to help in that department. As far as pitfalls are concerned, I'd say this likely varies from state to state depending on local custom. Remember that the services you provide the consumer with are the same services you are already licensed to provide. Topic is "Ask the ACRE Council" http://www.theconsultingtimes.com/blog/archives/2009/04/how-did-you-go-about-developin.html http://www.TheConsultingTimes.com Ask the ACRE Council Thu, 23 Apr 2009 11:33:58 -0500 Judi Bryan says: First, just as with a regular commission check, you are absolutely right...ALL fees for your services would be paid to your broker, who in turn would pay you. Although what you are paid and how you are paid it is between you and your broker, it's not uncommon for, if you work for a company that "splits" commissions, your split would be the same whether it was a fee for a service or a regular commission. It would be just like, for example, a rental transaction...sometimes those fees are quite small, but they are still "split" with the brokerage. Topic is "Ask the ACRE Council" http://www.theconsultingtimes.com/blog/archives/2009/04/how-do-fees-work-with-brokerag.html http://www.TheConsultingTimes.com Ask the ACRE Council Thu, 23 Apr 2009 11:30:45 -0500 Judi Bryan says: The Consulting Times Our Video Series for Real Estate Professional My RE Consultant: Our Consulting Site for the Consumer]]> Topic is "Ask the ACRE Council" http://www.theconsultingtimes.com/blog/archives/2009/04/what-if-you-like-your-brokerag.html http://www.TheConsultingTimes.com Ask the ACRE Council Thu, 23 Apr 2009 11:27:13 -0500 Judi Bryan says: Stop Working for FREE! We find brokers have varying approaches on how compensation will be delivered to the agent (after each transaction...even if the fee is small...or on some other basis), but that's up to the agent and their broker. In addition, several of our members have joined our ACRE Ambassador program which provides additional resources for discussing consulting and ACRE with colleagues, brokers, local associations, etc.]]> Topic is "Ask the ACRE Council" http://www.theconsultingtimes.com/blog/archives/2009/02/does-the-acre-program-help-bro.html http://www.TheConsultingTimes.com Ask the ACRE Council Thu, 23 Apr 2009 10:19:34 -0500