Entry by Merv Forney

A listing without ever meeting with the client!

Wonders never cease! I received an email from one of my Blog (the Northern Virginia Real Estate Guide) followers asking for clarification on our business model. I set up an "on-line" appointment with him with a password protected website I built that has a link to my fee schedule. The conference occurred this morning at 8:30. I spent about an hour with him explaining the consulting approach and walking through my fee schedule (literally designing a listing program with him on-the-fly). He was impressed with how transparent it is is (full disclosure on what I will do and what it will cost.

Net: The resulting fixed fee I will charge is equivalent to a 5% listing on a $425,000 property (3% to a coop broker and the equivalent of 2% to me). I asked if he wanted to talk it over with his wife and his response was "No, I like this approach, I know what I will be paying for...when can we sign an agreement!" We will sign the listing Tuesday night.

This is about the fifth time in the last 12 months I get a call and literally take the listing over the phone. It pays to be a consultant and it pays big time to get on-line exposure. In my case, the Blog.

7 Comments

The best thing about your story Merv is that the "the equivalent of 2%" listing fee that you describe, unlike a commission, is GUARANTEED payment for services. And you didn't even have to meet the client Ooh-hoo!

For those who don't know Merv, check out how he addresses the consulting services he offers on his site: http://choice3realty.com/our_services/000002.html. His "Smart Plan" is unbelievable.

Mollie

Merv,

I'm amazed at the level of content and the depth of information you include on your site! I find it very professional. I really love the options grid you created for different levels of services....it makes it very nice for the consumer to get a handle on what you're offering AND why different components might be important for their needs.

Great job (I'd say I want to be just like you when I grow up...but if I grow up any more....I'LL BE DEAD >>>)

JudiB

Awesome job Merv! And Deb, you are closer than you think! YOU are doing so well and are our ACRE Hero!

I've taken listings on the phone too. I love to be able to do more without wasting time meeting people face to face, it's just so much more productive!

My last one was a listing I took, she took digital photo's and emailed to me. I emailed her a listing agreement, she sent back. Put her in MLS and got multiple offers right off the bat. She accepted one.

I then referred her to an agent in Oregon where she was moving, she sold her house, and I never saw it, and I never met her til closing, and then got a referral fee from the agent in Oregon two weeks later.

Now THAT was SWEET!!

OH, I forgot to mention, she didn't want to do the consulting method, but after talking on the phone about all of her options, she listed at 8% (in my market 5-6 is normal) AND the deal she took was an all cash- over asking price, and closed in a week.

Now, had she had the upfront money, she could have made a better deal for herself, but wasn't quite sure she wanted to take the risk. As it all ended, I got paid very well for my time and she made a bundle as well and was a happy little camper ;-)

The bottom line is that I got her because I could offer her MORE CHOICES and she picked one that made her comfortable. That is why this program works SO WELL and is worth the time and money to learn it.

Judi,
Thanks so much for your comments. I started my business using this approach and will continue because not only do we believe it is the right thing to do but it just makes a hell of a lot more sense to the consumer. Transparency is the key. Not cheap, not discounts, not anything but high professionalism and delivering on commitments at a fair price.

Merv,

I've just looked at your site. Wow! So much content and so thorough. It made my head spin. You are just awesome.

I have a couple of questions. What percentage of your clients select fixed fee/hourly vs. straight commission? I notice you offer a discount if the client pays the fixed fee up front, otherwise you get a retainer and invoice monthly. I hadn't considered monthly charges. Can you expand on that?

Paula, Mollie, are either of you offering monthly payment options?

Deb

Deb,
OK. Here's what I offer:
1) Design a program that will work for a client off my fee schedule.
2) Payment alternatives:


  • a) Pay the predetermined fee at closing (just like commissions)

  • b) Time is money: Pay a 25% retainer up front. Pay 25% monthly (2 months). Pay last 25% at closing (or if we sell fast, whatever hasn't been paid). For this plan I give a 10% discount off the fixed fee. All pre-payments are non-refundable (earned when paid)


I have had a few that were willing to pay using the payment plan. Most want the pay at the end option. This may be different than Mollie and Paula but it works for me.

Here's another option I like.

I price the up front work like pre-list and marketing. get paid for those services up front. Might be $2,000 to $2,500 worth of my time and expense. Then, a "succcess" fee of 1 to 1 1/5% of the selling price when we sell and close. I've done these too.

The bottom line: Let your imagination run wild. There are no limits to the kind of deals you can make with clients as long as it is legal and ethical!

This page contains a single entry by Merv Forney published on February 17, 2007 12:26 PM.

Rebating or Crediting the Consulting Fee was the previous entry in this blog.

Turning Down Buyers is the next entry in this blog.

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