Adopting the Consulting Model - What do You Need for Support?

Quoting JudyB

Illinois is one of those states where "minimum service" has been introduced (at least in the greater Chicago market). I think it was meant to eliminate the "mls only" effort ... rather than discourage fee-for-service. And I definitely support the minimum service requirement we have here. And believe me...the "minimum" they mean is just that!

Quoting Lisa Goranson:

Also, I was looking into this NAREC - National Association of Real Estate Consultants. They are still offering classes but their website appears out of date.

Thanks to both of you for the feedback on Illinois' minimum service regulations. Here is a chart of the 17 states who have various forms of minimum service. If any of you are in these states, it would be great to get some feedback on what the regs in your state are like:

No-choice Minimum Service Required

Alabama , Idaho, Indiana, Iowa, Texas, Utah, Missouri, Washington, Illinois

Minimum Service but Consumers can opt-out

Delaware, Florida, Nevada, New Mexico, Ohio, Pennsylvania, Tennessee, Wisconsin

As to the question of the C-CREC designation, I have a little insight into this one. Yes, it was too early, or maybe not promoted long enough. I am fairly certain that this site and designation is due for an overhaul. Julie Garton-Good is not one to just drop things without cause. She will likely revamp the site and the course very soon - just my guess.

Side Note: In the email version of this post, I tried to insert a table from Word. It didn't work and stretched the state names down the page. I am learning. . .

JH

Copyright ©, 2008, Jack Harper, All rights reserved

Julie Garton-Good is not one to just drop things without cause. She will likely revamp the site and the course very soon - just my guess.

Thanks Jack.
I'm thinking that since she started this in 1999, just before the housing market took off, no agents would even consider this alternative. Until now.
Lisa
Thanks Jack.

True, Lisa - it applies to Exclusive agreements only, irrespective of whether they are Exclusive Right to Sell or Exclusive Agency agreements. The Exclusive Agency agreement has the same language regarding minimum standards that the Exclusive Right to Sell agreement has.

Regarding Julie....For me, she "primed the pump" so to speak. Several years ago (long before the arrival of ACRE on the landscape), Julie was scheduled to speak here in Chicago. I registered and drove the hour to the "event", along with several hundred other agents. Unfortunately, Julie never showed up. I believe she became ill at the last minute and was not able to make the trip....at least that was what we were told when we arrived at the hall.

Her program and her writings and presentations began to open the minds of agents to another approach...a "consulting" model. It was a beginning, for sure. I have to wonder whether the fact that she was never (to my knowledge) an agent hampered her realizing her objectives. I think there's a huge advantage in training and understanding consulting when you are doing so as an agent. You better understand the challenges agents face on a day to day basis and can help them address those challenges (because you've had to address them for your own business as well!) When Mollie created ACRE, she did so as an active, working agent in the Boston marketplace, and at a Keller Williams office.

There's no doubt, as you said, that Julie was ahead of her time in her concept. I'd recommend anyone considering adding Consulting to the services they offer should examine their options (we preach options to our clients...it holds true for ourselves as well!). I believe ACRE offers the strongest option currently available because of, not just the course, but because of the year long Coaching program the enrollment includes. Take a look at The Consulting Times - take a look at its Consumer Edition blog as well as its Professional Edition blog. These are all the "public" face of ACRE .... the Coaching platform is there as well - though available to members only. It is, however, even more robust and content rich, and very interactive for our members.

We very strongly believe that the landscape of real estate MUST change, IS changing, and that we, as AGENTS & BROKERS should be the architects of that change ... rather than having it imposed on us by outside forces (which is also happening at a rapidly growing rate thanks to the internet and evolving technologies). Consulting as trained by ACRE offers very strong tools for agents and brokers to add to their business arsenals in an effort to thwart outside forces from dictating HOW WE RUN OUR BUSINESSES AND SERVE OUR CLIENTS AND CUSTOMERS. To me, it just makes good sense.

I'm thinking that since she started this in 1999, just before the housing market took off, no agents would even consider this alternative. Until now.
Lisa
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Thinking back , when she first launched her efforts we really hadn't even been doing Buyer Agency all that many years! We're an industry very slow to adapt, and maybe her initial efforts followed too close on the heels of the buyer agency changes. I agree .... many more agents and companies are opening their minds to change today.

Judy is correct in her assessment of her state's position on minimum service. The DOJ has a lot of info on this. According to them:

Quote:

Illinois's minimum service provision requires real estate brokers entering into exclusive brokerage agreements to accept and present offers and counteroffers, and answer their clients' questions in every real estate transaction.

Many MLSs in Illinois have now passed rules requiring brokers to enter into exclusive brokerage agreements, so brokers in those MLSs are prevented from offering, and their clients are prevented from buying, MLS-listing-only services.

In 2008, a bill prohibiting broker rebates was introduced into the General Assembly. The Department of Justice wrote a letter on February 21, 2008 opposing the bill.

End Quote:

Note the reference to HB4313, the broker rebate prohibition. This is also a good thing, if taken only against the blue sky model that says we only perform activities as a part of full service. Can this be used to restrict how we price our servces as consultants? Where and how would we draw the line?

There are some states who prohibit any and all "a la carte" services. This means we can only perform full service in those states. This is a clear indication to me that some states and associations just don't get it. There is a very blurred line in their minds of what constitutes cut rate flat fee service and pure consumer-determined consulting service offerings. Thoughts???

I have compiled a chart that quickly explains the status in each of the 17 mentioned states. Since it is a table, it will not work here in the groups. Please email me separately if you want a copy.

JH

Copyright ©, 2008, Jack Harper, All rights reserved

I just noticed that I have been calling "JudiB" "JudyB" and athough you know who I am referring to, I am a nut for details. Sorry Judi, I will correct it from now on.

Jacque

Bless your heart, Jack...

LMAO.... Jacque and Judi..

Too cute!

JudiB and Jack,
A house on my block in Chicago just went on the market (overpriced) with this company, offering discounted fee-for-service:

http://www.selectafee.com/home.html
I have never heard of them until now...

I agree with what JudiB said awhile back, that this is not about discounting - its about choice!
Lisa

Lisa Goranson said,

JudiB and Jack,
A house on my block in Chicago just went on the market (overpriced) with this company, offering discounted fee-for-service:

http://www.selectafee.com/home.html
I have never heard of them until now...

I agree with what JudiB said awhile back, that this is not about discounting - its about choice!
Lisa

This company is operating under the wire by telling clients that, for $350 they will place the property on the MLS and then they will negotiate on the seller's behalf. This probably meets the Illinois requirements. Since we don't ever want to get into any discussions about what fees are good and what fees are not, I will not comment on their particular fee structure.

There are about a few thousand of these small discount shops in the US and they are growing. Do the math. Sales have declined 33.2% from a year ago (using new home sales as an indicator) yet NAR membership is only off less than 1% . This means that there are significantly fewer sales being divided by the same number of agents than there were a year ago.

One result of this disparity is that some folks who may not have a solid book of business might scramble for some market "hook" in the hope that it will generate some income stream.

Now, this brings up one very important point. How can or will we position ourselves as true professional consultants in the market when the temptation might be to lump all fee-for-service providers in the same bucket: cut rate discounters?

There are many ways. For starters, my company insists that we always operate from an agency position with full fiduciary responsibility. Next, we require an "education" session with all clients to help them understand what their options are and the ramifications of each. Finally, we allow the consumer to choose, but we always advise them of the impact of whatever choice they want to make.

Discount never enters into the equation. It is all up front and transparent: You select services and pay for those services. Commission never enters into the picture. Our focus is totally on the consumer's needs and wishes. Our attitude and our demeanor will demonstrate to the client that we are not like the chop shops.

Try to look at this like the difference between professional and respected law firms and the infomercial lawyers who chase ambulances or class action opportunities. Both are professional, according to the dictionary. Both are law firms, according to their descriptions. Both, however, are very different in their culture and image. That is the objective we will face - promoting the difference.

Jack

Copyright ©, 2008, Jack Harper, All rights reserved