Reserved Blog ID = 13 (old My RE)

What if You Could Have REAL Choices?

2008-01-09T19:15:07Z

(run time: 2:45) More consulting videos at: ACRE on You Tube What is real estate consulting? Continue reading ...

What is It? How does it differ from real estate sales?

2008-01-09T19:44:11Z

What is Real Estate Consulting? Is it just a fancy new catch phrase that means the same way of doing business? Well, we can't speak for some agents who call themselves consultants but still remain salespeople in practice, but we can tell you that TRUE consulting is a totally different model - a whole new approach in Real Estate.

Let's look at the differences:

Consultant: compensated for their expertise, time and/or the task. If they're paid contingent on a guaranteed outcome (a traditional commission), it is understood by the consumer that will be paying a premium to have this guarantee.

Salesperson: only paid for a guaranteed outcome (one they can influence but not control).

Consultant: often retained and compensated the way other professionals providing a service are, such as CPA's or most Attorney's.

Salesperson: compensated the way other salespeople selling a product are. (By the way: this doesn't mean that a consultant can't offer commissions if that's what right for their client - the essence of consulting is providing choices. It's just essential that the consumer understand what it is they're paying for).

Consulting: covers a variety of skills and can be used to reach a variety of outcomes.

Selling: has one single focus - to SELL something.

Consulant: Sometimes the best choice for a consumer is not to buy or sell at all (or not now)! The Consultant is retained to provide the counsel to help them reach that decision.

Salesperson: When there's no transaction, has nothing to offer (and no way to get paid).

The real estate salesperson usually has only one way of being paid: a contingent-on-a-sale commission. Consultants, on the other hand, can offer a variety of compensation alternatives such as hourly consulting, a flat fee, as well as traditional commissions, so that the consultant can tailor their services based on what the consumer needs to reach their goals.

By the way, consultative service is not limited to transactions. As an example, wouldn't it be great to be able to receive (and pay for) just a couple of hours of objective counsel on the real estate market when you're not sure what you want to do?

Who might be interested in Real Estate Consulting?

Any homeowner who's trying to decide whether to "move or improve" and wishes they could get objective counsel...
Any buyer who isn't sure they're ready to buy but would like some guidance on the market...
Any consumer who really doesn't WANT to play Realtor but feels forced to go it alone if they need to save money...
Any consumer who's ever resorted to a Discount Broker or a Discount Commission and found out too late that they got Discount Service which didn't get the job done, or didn't get it done right - thus losing money and valuable market time.

Get the facts before you waste your money

2008-01-20T19:00:53Z

Since the beginning of time, advertising has been used to sell products and services. While few advertisers downright lie, many often mislead because they don't tell the whole story. Real estate consumers today are particularly vulnerable to half-truths since they're increasingly frustrated with the lack of flexibility in the sales commission model and real estate is a field that looks deceptively simple until you're knee-deep into your transaction!

We believe consumers should have all the facts.

Below are five ads, that while fictional, are based on real ones in print, radio and TV. Given the money and the market time that can be lost, it's our hope that in addition to eliciting a chuckle or two, these sample ads will raise your awareness. It is also our hope to get the word out that, as is true in other fiduciary fields such as such as accounting, finance and law, in real estate:

Experience, knowledge, and expertise are not expensive...they are priceless.

[Click on the Titles to View the Ads]

What a Great
Mortgage Deal!

Discounted Services Can
Save You Big Bucks!

Where is the
Value in FREE?

What Does a
$500 Listing Buy?

The Internet
Can Do it All!

For the Do-It-Yourselfer

2008-01-21T01:04:15Z

What a Great Mortgage Deal!

(run time: 1:31)

Watch the ad, then click "Continue reading" below for the truth!

This radio ad is fictional although it is based on a real one

More consulting videos at: ACRE on You Tube

]]> THE TRUTH
We-Get-All-Our-Business-From-Ads-Mortgage doesn't care if these homes sell or not -- their primary interest is in selling mortgages to buyers calling on the listings. Their secondary interest is in selling extras to these sellers such as yard signs, "enhanced" exposure on their web site, and ads in their print magazines since the seller doesn't have a listing agent.

This ad would lead you to believe that all you have to do is list your home on their site and your house sells! If Jane's friend really had her home listed on the MLS and didn't get a showing, you can be sure that her home was significantly overpriced (probably because she used a discount broker), and she re-priced it to market before listing it on I-Did-Myself-In.com.

Real sellers who have used similar super-duper-go-it-alone web sites will tell you a very different story. Overwhelmingly, these websites don't sell homes, agents do. That's because, far from saving a full commission, sellers are only too happy to pay a professional agent's fee for bringing them a qualified buyer who's been educated about the market, especially after them having to play real estate agent for a few weeks (or months).

If this isn't bad enough, the particular company that this ad is based on does a cute little bait and switch routine, raising deceit to a whole new level. First, they ensnare the do-it-yourself seller with ads telling them how easy selling a house is, and how with their super-duper web site, they can sell directly to buyers and save the whole commission. Then, after the seller has dropped a bunch of money in buying add-ons they sell them as well as ads in the paper with no bites, they then actually instruct these sellers to mass email real estate agents, telling them about their home and inviting them to bring their buyers.

(Isn't it a bit ironic that on most similar by-owner websites, they are very clear that agents aren't allowed to contact sellers and "harass" them, but yet, it is ok for sellers to spam agents with their home descriptions?)

Of course, after having what they do for a living belittled by these ads, you can bet that most agents aren't chomping at the bit to show these homes unless, of course, it's a torrid seller's market with a tremendous shortage of inventory.

By the way, legitimate mortgage companies with good reputations, get the lion's share of their business from real estate professionals who recommend them to their Clients because they offer great service and are accountable for what they promise. Why do you think that We-Get-All-Our-Business-From-Ads-Mortgage would choose to spend thousands of dollars per week running ads that alienate real estate agents by implying that their super duper web site can replace them? The truth is that they gave up on getting business from agents a long time ago because their service is so terrible that no agent would recommend them.

Why Choose an ACRE®?

2008-01-25T21:51:09Z

Real estate professionals who have earned the ACRE® designation have completed a course of study and taken an exam that tests their ability to provide unbiased counsel to the consumer in matters that deal with real estate. It provides them the tools to offer different choices to the consumer based on a comprehensive needs analysis. Accredited Consultants in Real Estate® consult WITH their clients, not sell TO them. So, rather than hiring a salesperson whose sole focus tends to be "making the sale," a consultant's focus is to help their clients attain their goals, which may or may not involve a sale. In addition, most ACRE® graduates continue to be coached by the founders of the ACRE® program, as well as work with all of the other ACRE® graduates from across the US and Canada, through the Graduate Coaching Program, thereby continuously increasing their knowledge and skills, and staying current with market shifts and trends. Think about this: if a consumer seeks expert counsel in real estate, should they go to their CPA, attorney, barber, or a Realtor®? The problem with the traditional commission model is that the Realtor® is only paid if a successful transaction takes place. So, consumers often turn to attorneys to negotiate offers and troubleshoot their transactions. Unfortunately, because most attorneys don't work day-to-day in the real estate market, they are not the best choice when it comes to hammering out the best deal and certainly not in attending to the details that will ensure that the transaction closes on time. Now the consumer can hire an ACRE® to do just the tasks they need done and more importantly, get the vital expertise that is so important in getting the best value. They can pay for advice, counsel, and experience from the professional who knows the most about real estate. If they want to buy, sell, "move or improve," they can pay for those particular services only, and at the same time, receive unbiased advice and counsel. If consumers need an experienced professional to handle the fiduciary responsibilities of a home sale, such as, qualifying the buyer, dealing with various disclosures, and/or supporting them in the negotiations, they can obtain these vital services from an ACRE®, through an hourly fee without having to complete a transaction or pay a commission. The bottom line is, the essence of real estate consulting is the ability to provide choices to consumers. The essence of the ACRE® designation is real estate consultants who provide choices to their clients and who stay current with market trends and shifts through a dynamic network of other ACRE® members through the Graduate Coaching Program. For the consumer, whether you pay an ACRE® for a few hours of consultation, a flat fee for a bundle of services, or choose to pay in the traditional commission structure, you will now receive and pay for only the services that fit your current needs and comfort level.

Determining What You Need

2008-01-26T12:07:47Z

YOU Make The Decisions - Our Job Is To Guide, Not Decide! The very essence of Real Estate Consulting is giving you, the consumer, choices. But in order to make the best choices, it's important that your needs, capabilities, and time that you're able and willing to devote to the task of selling or buying a home are carefully, (and realistically) evaluated. The major failing of most online sites that feed the public a lot of data, without any guidance, is that this step is usually ignored. Good news! We've developed Seller and Buyer Needs Analysis that will make sure that you are on the right track. In a few minutes, in the privacy of your home or office, you can review the various tasks involved in selling or buying a home, determine which ones you have the capability, time, and desire to do yourself, which ones you might like a pro to handle, and which ones you're ok with not having done at all. Many consumers have told us that completing the analysis was the best thing they did in the selling or buying process. This analysis will help you to determine where your needs may lie, confident that tasks or expertise that you might not have thought about won't sneak up and bite you later in the process. And if you find that you need some professional assistance, we'll help you to get the most bang for your buck.

A Promise You Can Take To The Bank

After reviewing your goals, needs and capabilities, if we honestly feel that you can do just fine without our services, we're going to tell you so. Many times, ACRE®s have met with would-be sellers or buyers who they truly felt would be better off not selling or buying at that time or not at all and they've told them just that. One thing we want you to know: we have absolutely no interest in wasting your money or time (there are plenty of outfits that do that). As ACRE®s, we have a reputation for honesty, straight talk, and ethics and that reputation is far more important to us than a few bucks from someone who doesn't need to spend it. We're also going to tell you if we can't accommodate what you want. Sadly, many agents will do almost anything, and work with almost anyone. We won't unless we truly feel that our services are a good match with a consumer's needs. In real estate, there's Nordstrom and there's KMart. We only do Nordstrom. Now, we will offer different ways to pay for Nordstrom, but in terms of the quality of services we provide, we will only provide Nordstrom because quality is what will leave the consumer the most money in their pocket when they walk away from the closing table, and Nordstrom is what we, as ACRE®s, will put our names to. Now, there are some consumers that may want KMart. And if you're one of those consumers, you're in luck because there are tons of KMart agents out there. But that's not what we do.

It's Not What You Save...It's What You Keep!

As is true in other fiduciary fields, quality real estate services and counsel will always net you the most when you sell your home, and that's after you pay a commission or fee. Discount services are a waste of your money, no matter how cheap they are.

Where's the Value in FREE?

2008-05-29T12:45:42Z

We can Value your Home right on the Web!

(run time: 1:04)

Watch the ad, then click "Continue reading" below for the truth!

This TV ad is fictional although it is based on a real one

More consulting videos at: ACRE on You Tube

]]> THE TRUTH Online valuation services are of two types: Comparative Market Analyses (CMA's) done by computer and those done by agents. The computer generated ones are totally useless except to get a very general idea of what similar homes might sell for. This ad, on the other hand, touts the benefits of a CMA researched and prepared by a real agent (hoping to get your listing because they're working for FREE). What this company is implying, of course, is that by going through them, you're not getting a "pushy salesperson," but rather a "trained professional". But here are the facts: what you're really getting by going through this online service is an agent (or agents) who are willing to pay this outfit for leads (that's YOU when you fill out their online form). The service sets themselves up as the middle man, making their money off agents, while providing zero added value to you, the consumer. In fact, you often end up paying MORE to the agent if you list since they have to pay off the lead service first. Let's think this through logically: who's more likely to be the pushy salesperson - the agent who YOU call, either because of their good reputation or because they were referred, or the agent(s) that call you because they've paid big bucks for you as a lead? Who is more likely to be a quality professional, an agent who receives the majority of their business by referral (something you want to look for), or someone who is so desperate for business that they pay a dot.com for leads?

What does a $500 listing really buy?

2008-05-29T13:15:38Z

Everything You Need for Only $500!

(run time: 1:30)

Watch the ad, then click "Continue reading" below for the truth!

This radio ad is fictional although it is based on a real one

More consulting videos at: ACRE on You Tube

]]> THE TRUTH This seller has NO ONE working for him. And in all probability, he has just thrown his $500 away. There is no question that even in today's Internet world where data is freely shared; the MLS is still a uniquely powerful marketing tool. When used by agents, the MLS brings buyers and sellers together, but more importantly, because idealy, each side has representation, both buyers and sellers receive the guidance and the advocacy that allow them to get the best value when they buy or sell. But here's the rub: the MLS was designed as a professional tool between licensed agents, not as an advertising medium for an unrepresented seller. When the MLS is used as intended, agents know that they will have a licensed "partner" on the other side that will not only provide the guidance and fiduciary counsel to their own client, but also complete the many tasks that are required on both the listing and the buyer sides. "MLS Entry Only" listings notoriously get few showings because buyer agents know they will have to deal directly with the seller and often have to do the work on both sides, since there is essentially no listing agent. Because of fewer showings many "Entry Only" listings do not sell, forcing the seller to then hire a full service agent and forfeit their "Entry Only" fee. Sadly, even if their home does sell, it usually does so for thousands less than it should have. The seller saved a commission, but lost far more. Another problem with "Entry Only" listings is that many agents and their brokerages, understandably, do not want to take on the added liability of working with an unrepresented seller. Even in states that have transaction brokerage, a company still runs the risk when it places the seller's listing in the MLS, that the seller will assume that the agent is representing them, even if they've signed a disclosure to the contrary. Frankly, most any agent worth their salt would never want their name on a listing if they wasn't involved in negotiating and troubleshooting the transaction. As a child, do you remember reading the story of the Goose Who Laid the Golden Egg written by Richard Cummings? For those who need a refresher, the goose in this story would lay a golden egg each day and the farmer was getting rich. But the farmer got greedy and one day, cut open the goose in order to get to all the eggs at once. Unfortunately, he just killed the goose. The MLS (the goose) was designed as a cooperative between licensed agents who could share information for the benefit of their clients. When used as designed, the MLS has historically been the producer of lots of golden eggs - enabling sellers and buyers both to come together in a cohesive environment through their licensed representatives. But when you try to bypass the "cooperative," there are no golden eggs. There are reasons that states such as Texas are establishing minimum service standards in real estate. This is not "restraint of trade" as some press reports would have you believe. On the contrary, this is consumer protection. As Blanche Evans of Realty Times said in her article "Are Minimum Service Rules a Disservice to Consumers?": It's the nature of consumers to try to "beat the system" until costs have dropped to the point where the consumer is endangered. But it's not the nature of consumerism to look down the road and envision the end result of their downward pressure on fees. For instance, they don't see the day when air travel becomes unsafe because ticket prices have dropped so low that maintenance is cut or deferred.

The $1,995 Bargain. Or is it?

2008-05-29T13:33:15Z

Discounted Services Can Save You Big Bucks...Right?

(run time: 1:02)

Watch the ad, then click "Continue reading" below for the truth!

This newspaper ad is fictional although it is based on a real one

More consulting videos at: ACRE on You Tube

]]> THE TRUTH That $2,995 fee does not include the Multiple Listing Service (MLS). It also does not include compensation to the agent working with the buyer. Of course, they'll tell you that's because they're marketing directly to the buyer, not to the agents. This ad looks deceptively like straight Fee-For-Service except for one little detail: they only get paid for results. Sounds great, but what does it really mean to you, the consumer? Well, you'll certainly get a sign in your front yard, but how much will they proactively advertise and promote your home for a reduced fee that they're not even assured of getting? What quality of agents work for reduced fees that are still contingent on the sale? This is classic discounting. Here's the straight scoop: unless it's a seller's market with a shortage of inventory, your home needs to be listed on the MLS if you're going to get the exposure that ensures top dollar. The truth is that serious, qualified buyers (the ones you want) overwhelmingly work with an agent and this option doesn't bring your home to the attention of those agents. It's also classic bait and switch. After you've had your home on the market for a month or so without MLS exposure, you're probably going to inquire if they provide MLS "for a discount." Of course they do! They will then offer you a discount commission (so much for the fee concept), but they don't take the whole hit themselves: they also discount the compensation offered to the agent bringing the buyer. Now, it would be great if all agents were selfless souls who never looked at their compensation when showing homes, but this is one of the conundrums that today's agent has: because few buyers have the cash available to pay their agent themselves, agents working with buyers have to depend on the compensation offered by the listing (called a co-broke in real estate lingo). Yes, most agents put their buyer's interest first, but if they have a choice between a home offering the going compensation and the discount listing offering less, which home are they going to show? Surely not the discounted home.

What the Internet CAN and CANNOT Do For You

2008-05-29T14:19:01Z

The Internet can do it ALL!

(run time: 1:45)

Watch the ad, then click "Continue reading" below for the truth!

This TV ad is fictional although it is based on a real one

More consulting videos at: ACRE on You Tube

]]> THE TRUTH To suggest that since buyers online are able to educate themselves on the current housing inventory, therefore the agent is doing less and should be compensated less, is ludicrous. While it is absolutely true that technology allows buyers to do a lot of the "winnowing down" of properties, this is NOT where the value of an experienced agent lies.

A buyer agent's value is not in finding the home, but in getting the best deal for their buyer-clients once it is found.

Clearly, technology has saved agents from doing manual home searches and being the "gatekeeper" of information. Instead, the average agent today is spending more time than ever servicing their clients. Rather than doing manual searches and drive-bys of properties, today's buyer agent is checking out tax records and digging into the history of homes that are of interest to the buyer. Thirty years ago, it was "buyers beware," but today it is "buyers be represented," with the onus on the agent to make sure there are no "surprises". Think about the following scenario:

A friend of yours isn't feeling well so they make an appointment with their doctor. In the time before the appointment, they go online and research all the diseases or maladies that possibly match their symptoms. Now, can you imagine them walking into the doctor's office and announcing to their doctor that since they have done so much of the "legwork" of gathering information, the doctor's job is lessened and therefore, the doctor should be paid less? Of course not! Your friend has honored themselves by becoming a more educated patient. And the treatment the doctor will prescribe may be easier for them because they may know what to expect. But they have in no way done their doctor's job for them. That's because a good physician's value is not in gathering medical information, but in interpreting it and applying it to their individual patient's needs.

In real estate, when a home buyer becomes educated about the real estate process and the types of homes that might fit their needs, what they actually have done is help their agent to help them. To imply, as this ad does, that consumers are doing the agent's job for them is simply not valid. REALTORS® put in as many -- if not more -- hours into each and every transaction as they were ten years ago. Their time now is just spent differently. By the way, while we're on the subject, all this great technology not only fails to save a good agent any net time on a transaction, but it has greatly driven up the average agent's expenses. Who do you think pays for these online property search services that are taken advantage of by consumers? They are paid for by the agents who offer them for FREE in hopes of attracting more prospects. What used to be a cutting edge application that would set an agent apart, has today become just another required expense. And as real estate companies are squeezed financially, more and more of these "costs of doing business" are being passed on to the agent themselves. One more word to the wise on ads such as the previous one: you can be sure that agents willing to hand back 25% of their compensation on a transaction that is still contingent on the sale will not be the seasoned pros that will hammer out the best deal for buyers. A quality agent knows that they are giving the consumer good value for their money - the quality of their negotiations and troubleshooting of the transaction makes that abundantly clear. An agent willing to hand back a quarter of their income is essentially saying "My services are overpriced for what I will give you so I will give you a rebate."