Recently by Mollie Wasserman

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. 

But here's the interesting phenomenon: the doctor-teammate didn't have a clue as to what to charge him because he had no clue as to what his services were worth! As any doctor today will tell you: their charges are handled by insurance. And the truth is that if the good doctor had not been playing softball with him, Jack's lack of insurance would have dictated that he wouldn't be going to a doctor's office at all - rather he would have to go to the ER if he wanted his ankle looked at and the cost of his care at the ER would have been absorbed by the insured.

Meanwhile, most of us who have health insurance never ask a doctor what they charge because we don't pay for the lion's share of our care - insurance does, so we have been quietly oblivious until the last few years.

So, what does this have to do with real estate?

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.

Likewise, in the real estate industry, we continue to practice in a way that is not so much broken but hopelessly outdated. The traditional sales model was conceived in years past when we, as real estate practitioners had a very different role. If you think about it, real estate as a sales profession, paid by commission, made total sense when the agent's only job was to "move the merchandise". But in the 1990's our national and state associations expanded our role - it was no longer enough to simply sell the product, we now were asked to act as fiduciaries: working in the best interest of our client and putting their needs above all others, including, and most especially our own. In fact, our responsibilities as a fiduciary became a part of the NAR's (National Association of Realtors®) code of ethics that we are obliged to adhere to.

Yet, when our role was expanded and fundamentally changed, when we were asked to provide objective counsel that was in the client's best interest, no attention was given to how this new role fit with a compensation system that is geared toward salespeople who are free to work in their own best interest. Consequently, real estate professionals today are put in an impossible bind that no amount of "ethics training" can address: we are being asked to provide objective counsel that is in the best interest of our client when how much we are paid, (or whether we are paid at all) is wholly dependent on the client's decisions which we are advising them on!

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...

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.

The problem with this discussion is that both sides miss the larger issue. The true disconnect for the buyer in understanding, and thus demanding, representation dates back to the mid 90's when our boards and associations started asking us to shift from a sales role (move the product) to a fiduciary role (represent the client). While they asked us to change our role with the client, they failed to examine our traditional compensation model which by it's very nature sets up an inherent conflict of interest: how in the world can you act as a fiduciary and give truly objective counsel when you are being paid contingent on the client's actions that you're advising them on?

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.

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.

Sheesh! Is there any profession other than real estate that considers it "disrespectful" to ask that their time and expertise be valued? Is it so outlandish to have the expectation that if you do your job well and help the client to achieve their goals that you have the right (horror of horrors) to get paid? And why pray tell, in an industry that traditionally asks for no upfront fees and where one is required to pay all expenses such as (hmm, I don't know, maybe GAS!) out of pocket, it is somehow "disrespectful" to actually ask for some kind of a commitment to work exclusively so that when the consumer actually finds their home, that you can get paid for your efforts?!?!

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.

In my book Ripping the Roof off Real Estate, I talk about the difference between a commodity, which can and should be shopped by price and a service where the quality, level of expertise, talent or experience makes a big difference in the outcome. When an agent or brokerage competes on price, they reinforce the perception by the public that agents are all the same, a commodity, and therefore they should be shopped by price. However, when a real estate professional understands and articulates their value, the consumer will beat a path to their door and the competition will be left in the dust.

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:

The Republican primary in the state of Michigan was held this past January and the way that the two leading candidates approached this primary provides a fascinating primer on how real estate will fare in the next few years, depending on our reaction to the systemic changes that confront us.

I've noticed that during the last few months of every year, agent list-serves and forums begin popping with posts regarding the newest and greatest software, tools, and must-have cool gadgets to buy for their businesses. This crazy rush to purchase the newest and greatest is in full swing by the NAR® (National Association of Realtors®) Convention in November and only seems to slow down when the realities of holiday shopping hit home - usually when the bills begin arriving in January.

Last week, in "Broker proposes new real estate marketing platform: Universal MLS", Inman News Writer Glenn Roberts discussed a "Universal MLS" that is the brainchild of Colorado real estate broker Creed Smith, a specialist in bank-owned foreclosure properties. A real estate broker since 1987 who has a master's degree in marketing, Smith said his vision for a new breed of MLS is based on his belief that real estate agents and brokers will inevitably play a lesser role in real estate transactions as Web-based services become increasingly popular with consumers.

A few years back when I was teaching "Introduction to Real Estate Consulting" at boards and associations, it was common for agents, brokers, and managers who didn't understand consulting to dismiss it as "discounting". This type of comment was always amusing to me because in fact, I developed my consulting model as an antidote to discounting.

In the 1995 movie, The American President, there is a scene where President Andrew Shepherd, played by Michael Douglas, is in a heated discussion with his domestic policy advisor, Lewis Rothschild, played by Michael J. Fox, about the President's falling poll numbers.

In this scene Rothschild pleads: "People want leadership, Mr. President, and in the absence of genuine leadership, they'll listen to anyone who steps up to the microphone. They want leadership. They're so thirsty for it they'll crawl through the desert toward a mirage, and when they discover there's no water, they'll drink the sand."

To which President Shepherd responds: "People don't drink the sand because they're thirsty, Lewis. They drink the sand because they don't know the difference."

Below is a response from one of the ACRE graduates and coach, Judi Bryan, to a post on a list-serv regarding programs that teach fee-for-service type models.

There is a program available which gives the "availability" of fee for services, but goes, I believe, a whole lot further. It's the ACRE® program for Accredited Consultant in Real Estate. Since the program is designed around a "consulting" model where the seller has options with what services they want and how they want to pay for them, and the agent has the opportunity to get compensated for time and expertise, whether a transaction ensues or not, it offers a real win/win. And there is no need to sell a prospect on anything. All it is meant to be is an option...an option that gives us "transparency" in how we are being paid and does not require that the seller take an "all or nothing" package.

In real estate today, large numbers of agents are competing for a shrinking market. With unlimited real estate information available online and multitudes of sites competing with, and seeking to replace the agent, the public increasingly looks at the agent (and brokerage), who only offers the traditional full-service package payable only by commission, as a commodity to be shopped by price. Limiting themselves to the traditional commission model, agents and brokerages are indeed swimming in a bloody red ocean of cutthroat competition.

By contrast, real estate consulting, which provides the consumer responsible choices in the services they can obtain and how they can pay for them, while paying the professional fairly for their time, experience, and expertise, creates an "uncontested market space, ripe for growth that makes the competition irrelevant."

In the article, "Discount Brokerages Band Together" Matt Carter of Inman News wrote that Virginia-based RebateReps.com helps agents who want to dabble in discounting without alienating full-commission customers, or work for a discount broker full time. "Most Realtors® don't want to advertise themselves as rebate agents because it cannibalizes their other business," said RebateReps founder and owner Daniel Rubén Odio-Páez. "RebateReps connects buyers to local agents who are willing to rebate part of their commission but don't necessarily want to advertise that fact." Odio said. "RebateReps allows agents to have their full-service brokerage and to service our (discount commission) leads."

One of the ACRE® Grads on our Graduate Coaching Exchange recently posted the following: "I have been talking up this whole consulting idea within my office and the other agents are so critical, suggesting that I am advocating limited service brokerage. And while I am saying no way, I am having trouble defending my position. HELP!"

My colleague and good friend Allyson Hoffman, like many of us, was dismayed by the incredible slant and half-truths that filled this past Sunday's 60 minutes segment Chipping Away At Realtors' Six Percent. But, in her blog, she focused on something that I also believe needs some clarification - the issue of the minimum service requirements that some states, including Ally's home state of Illinois, require. There was so much misinformation and lack of full reporting in this story that I could easily blog on different aspects for weeks, but like Ally, I would like to focus on the concept of minimum service requirements.

A couple of days ago in an article for Inman News entitled "Realtor® Ranks Swell but their Pocketbooks Don't", Glen Roberts reported what we agents already knew: that despite the huge increase in housing prices over the last ten years with the accompanying public perception that agents are making gobs of money, the truth is quite different.

In actuality, Realtor®'s median income was down 3.2% in 2006 compared to 2004, while their 2004 median income had dropped 5.6% from 2002. Roberts quoted Chang-Tai Hsieh, an associate professor of economics at University of California, Berkeley, who said that the median-income drop for Realtors®

"is clearly driven by the fact that there has been excessive entry in the last two years. You would expect to see some exit in the near future, but as soon as housing prices pick up we're going to see more entry and then that's going to drive down (income)."

WHY CAN'T THE CONSUMER HAVE BOTH?

In a recent article in RIS Magazine, Brian Buffini, founder and chairman of Buffini & Company made a very interesting observation: despite the fact that 80-90% of real estate buyers start their home search online, how many, when browsing homes online and finding one that they like, would actually go to the next step and click "Add to Shopping Cart?"

Zillow is now offering a "great deal" to agents: you can post your listings for FREE! What great exposure, and how kind of Zillow to offer such a wonderful service to agents without taking a dime-what a nice company!

The papers and newsmagazines have been filled of late with articles about the crisis in Sub-Prime loans issued over the last few years. Seems as though many buyers took out loans that they clearly should not have: loans that sucked them in with a great interest rate for the first year or so and then boom! A monthly payment that doubled or worse and sending many new homeowners into forclosure and financial ruin.

In real estate, quality is essential for keeping the most money in your pocket when you ultimately close. But should that mean that you are locked into paying by commission in order to get that quality? I believe the answer should be no.

Of course, after you have explored and weighed different options, based on your individual needs and comfort level, you may find, as many consumers do, that a traditional commission is the best choice for you. And that's perfectly fine. But you should make that choice because it's the BEST option, not because it's the ONLY option.

One of my goals in writing my book "Ripping the Roof off Real Estate" as well as in developing the Accredited Consultant in Real Estate (ACRE)™ course for agents is to see the real estate industry evolve similarly to how the financial industry did 20 years ago.

This past Sunday, the cover article of Parade Magazine was entitled "Do You Have a Better Idea?"  The article talked about how solving problems can be accomplished by simply looking at the issue at hand and "thinking out of the box". From the "Forever Postage Stamp" to increasing the supply of organ donors, the article offered many examples of how we can devise simple solutions to big problems by simply borrowing an idea from another country, industry, or context and applying it to a problem.

A similar point was made by my colleague and friend, Ken Deshaies, in the foreword of my new book "Ripping the Roof off Real Estate". Ken noted that the authors of the book "Blue Ocean Strategy" described how major business successes over time have come from innovative business leaders re-imagining the business at hand.