Extreme Makeover - Real Estate Edition – Part II – Breaking the Cycle

People are leery of realtors. To counteract that mentality, I feel it's a refreshing idea to represent yourself as flexible in services and pricing without creating the stigma of having a discount or cheap reputation.

With this platform, you would be able to maintain your integrity and high professional ethic and still be paid for what you do. Now having never gone down this road before, I was wondering, Is there a standard for fees charges and services provided?

Is there a standard for fees charges and services provided?

Diana, your question is one of the most common that we hear and the quick answer is no. You can no more use someone else's "standard" fees or hourly rate than you could take someone else's prescription medicine - it's unique to you and your market.

That having been said, you don't have to reinvent the wheel. In the ACRE® program we have tools to help you to determine your hourly rate as well as help you to price your services. We also have both a Buyer and Seller Needs Analysis which we encourage ACRE®s to email to the prospect FIRST. These analyses not only help determine what their needs are but also their motivations.

Clearly, with enough time and self-discipline you can do all this on your own. But I'm very proud of what we've developed in the ACRE® program because through the coaching program everyone helps each other with the issues and challenges that face us all when we decide to practice real estate from the consulting model.

If you'd like more information about the ACRE® program, check out the videos we have for real estate professionals at: ACREonYouTube.com. You can also sign up for our free monthly newsletter at TheConsultingTimes.com.

However, if you decide that you want to register for the program, make sure you go through the RealTown link. ACRE® has the RealTown seal of approval.

Take care,

Mollie

Quoting Diana Russell:

With this platform, you would be able to maintain your integrity and high professional ethic and still be paid for what you do. Now having never gone down this road before, I was wondering, Is there a standard for fees charges and services provided?

Jack Says:

Great question. I feel that this is somewhat dependent on your market and prices. For example, we have a pricing schedule that sets hourly and bundled prices such that when the client decides to add a majority of them all up it would total just below full-rate traditional commissions. The reason is that they are paying up front. Since the risk to our income is reduced, we can afford to lower the fees.

Now there is also a point when it makes sense for the client to just go ahead with full service - either non-contingent or higher rate contingent. So, rates need to be reasonable based on what those traditional fees would total.

Standalone activities are priced at higher hourly fees than if they are bundled with other activities - bulk pricing, so to speak.

I would love to hear from others - especially the ACRE designees in our group, as to how they set their fee schedules.

I am still considering whether to run this idea past my broker, but I am not really happy where I am now....I'm thinking about interviewing with other small brokerages in my area to see what they think of the idea.

Another thing I thought of was the situation with many homeowners right now not having enough money to pay their mortgage let alone pay us on a fee-for-service basis...just to keep in mind that we may need to be flexible with our fees (traditional model) if we wish to help those in dire situations.

I am really enjoying this discussion board...I am very excited about this concept being the future of our industry!

Thanks Jack, and thanks to input from the folks at ACRE®

Lisa

Thanks to you, Lisa. You are now officially a pioneer!

I am with you on helping those in dire situations. What better way than to work directly with and for them without the need to put their home on the market? Here are a few opportunities that I have witnessed lately:

• For a fee - represent the homeowner to their lender in an effort to renegotiate their mortgage - successful twice so far
• For a fee - save the homeowners thousands on their tax bill through a tax abatement negotiation, including presenting real comps to the tax assessor - successful twice so far
• Advise a consumer that their best path was to repair their credit and referred them to a counselor - fee waived

We are all about helping consumers. We are giving them support in more ways than might appear on the surface.

Mostly, though, we are offering them something others don't offer - CHOICES.

I am excited for you. Please keep us posted on your process, as this is a very important time for you.

JH

Those are great ideas Jack! Thanks!

Lisa

When I mentioned liability, I meant for services beyond what is typical for real estate agents. In Illinois, even if you have some knowledge about real estate laws, we are told to refer them to an attorney...don't even offer your opinion. This is what was told to us by our Local MLS board when I was first licensed.

Meanwhile, I've been pondering how to incorporate the MLS into this strategy. The way we use the MLS now kind of muddies up the waters. Sellers naturally want their listings in the MLS. If a Consultant charges a flat fee for entering a property in the MLS, the sellers will have to include some compensation for a buyer's agent.

Now that I think about it, has anyone offered a co-commission that was a flat fee?

Am I making this more complicated than it has to be?

Any feedback would be appreciated.

Lisa

I am pretty sure that your MLS is telling you that we are not attorney's so we should never give legal advice. Abs olutely correct. However, by virtue of your license, you have skills and knowledge that have value and can be priced.

There are other Illinois agents.brokers here who can speak specifically about the laws there.

Now, about that flat-fee listing. I don't offer that. I will only put them in the MLS as part of my full service or my marketing bundle of services. I want to be clear to my clients that I am not a discount shop and I am not just a way to get into the MLS. I feel that if it doesn't take knowledge or skill to do it, and all it takes is being a member of the MLS, it is not a service that I want to charge for. Just my opinion.

JudiB? Any thoughts?

Very interesting point, Jack. Every bit of your feedback helps the rest of us.

Thanks,

Lisa

Very interesting and informative material.

As the Broker / Owner of my office, I have decided to investigate alternative brokerage models. My idea is to put together several service packets with specific services and fee and allow the seller to choose what is appropriate for them. Reading your article about fee for service I wonder if You provide consultative support to broker and help them choose the right business model for their business.

I'm interested in embracing a new business model.

Regards

Joe Emma, CRB, e-PRO