I've posted my success stories but it's important to share the not so successful stories as well.
This may have a happy ending when all is said and done but this is what happened. I have an investor client with whom I have done several transactions over the last 4 years. Like many of my clients, he has also become somewhat of a friend. As probably some of you have experienced, friends and relatives can be the biggest users.
His last 2 purchases have been from FSBOs he found himself and who would not pay a buyer's agent commission. Each of these "deals" was fraught with troublesome details and potential time bombs and I had advised him against getting into them. Of course, "he knew better" and proceeded. I did not represent him. However, he wanted my advice almost every step of the way. I politely told him that I just couldn't put myself in that position.
Two months ago, he asked me to help him out with trying to get one of his properties rented. Being the nice person I am, I helped him quite a bit (I didn't charge him) and ran his credit checks for him, and helped him place his ads, etc. OK, that wasn't too bad. He called to say he wanted to thank me for all my help by taking me out for, hold onto yourselves, breakfast! Wow, big spender!
At breakfast, he is trying to pick my brain for advice and counsel on a couple of other FSBO properties. My blood begins to boil and I tell him he needs to do his due diligence and I'd be happy to help him through my consulting services. He ignores that and switches the subject to a discussion of selling one of his rental properties. He is implying that he wants me to list it for him...then, he says "do you think you could help me advertise it on craigslist?" WHAT!??????!!!!!!!!&&&%%^^$$#))
No, I CAN'T help you, Brad. BUT, I can if you want to engage my consulting services. He says, "No, I think I can do it myself, you've been such a good teacher all these years." ###@@))**&^%$^^** Not wanting to get too involved in this discussion in a public place, I wished him good luck on this and all future endeavors. We parted awkwardly.
He called me yesterday wanting some comps. WHAT does this guy not understand? I finally laid it all on the line for him telling him that as much as I appreciated his business, the time had come for me to stop giving it away. I recalled for him how supportive he had been when I first told him about the new business model I was adopting and how he thought that was such a great way to do business. I explained again how I operate my business now and that I did not want to feel resentful every time he asked me to provide him with a valuable service that he would use so he would NOT have to do business with me.
He said he was sorry I felt that way and that he intended to give me more business but he was just trying to save money. I said I didn't blame him for wanting to save wherever he could but that I couldn't participate in something that was not going to result in me have an opportunity to EARN something.
I may have pushed him away for good but I had to "stop the madness" LOL. It may have cost me a client but I felt a sense of relief to not have to "dance around" this topic with him anymore.
Thanks for letting me vent.
Deb
I have not had time to post my new book, etc. but I wrote a section (pg 39) titled, "How to sell your own real estate, perform your own surgery, and save thousands."
You and your client (for lack of a better word) might benefit from my personal rules (pg 157). Rule 1 - Do it yourself. Rule 2 - If you can't do it yourself, and need help, ask! Rule 3 - If I agree to help you, then follow my instructions. Rule 4 - If you can't, wont, or don't, go back to rule number 1.
In your case, just add - "and my expertise costs $_____ per hour."
And, one stupid mistake on your part could cost you at lot more than my professional advice (which you obviously need).
Add some tact, and you have it ...
Yours truly,
Kerry D. Bodily
509-493-2101 (PST)
mail to: kerry@kerrybodily.com
Author of "Untold Secrets - How the Real Estate Market Really Works - Price/Value."
Read how and why “Competitive Pricing” is much quicker, easier, more logical and convincing than ordinary CMA methods of determining price and value for your sellers and buyers.
Available at Amazon.com, Barnes & Noble, www.XpertCMA.com, or any book store.
Deb, I just can't help myself,
add this to your menu -
Invaluable advice $200/hr
Regular advice $100/hr
Worthless advice $FREE
I wonder which Brad would choose?
Kerry
I can't help myself, Kerry's advice on worthless advice, invaluable advice, or regular advice was PRICELESS! I have to start using that!
Deb... so sorry to hear of your ordeal with this guy, but we've all been there, done that. You haven't lost a client. A client is someone who PAYS you......this guy is a user, who will now understand that if he wants to take you to a $5. breakfast and get free advice, that won't work anymore. Don't feel like you've lost something... you've actually GAINED something. More free time, or more time to develop paying clients. This is a process, and one where you weed the worthless time-wasters from those who are worth spending your time with.
You've just taught everyone a valuable lesson. Don't be afraid to stand up for yourself and tell them that you will not work for free just because they want to pay for your breakfast ;-) lol......I would have told him I'd pick up the tab if he was so poor that he needed to try to pick my brains for free.
You get what you pay for, and you deserve what you get when you pay it. He is getting what he paid for, nothing........what he doesn't understand is he could have made a LOT more money by paying you as a consultant....... that's the concept he isn't grasping, and most people have a problem with. They think the more they pay someone else, the less they make.
I love my slogan: "Experience isn't Expensive.... it's PRICELESS!"
PERHAPS EVERYONE SHOULD STEAL THIS FROM ME?
Deb,
What a fiasco....and one that I'm sure ALL of us can relate to! And I agree with Paula....you did not lose a client (nor apparently a friend...a friend treats a friend with respect....this guy was simply a user!) - but what I think you GAINED was much more important. You gained increased self-respect and time and tools to concentrate your attention on people who ARE respectful and appreciative of the VALUE you bring to the table...and who will PAY for that value!
I don't know what your buddy Brad does for a living, but I'd venture to say his boss wouldn't get far if he advised him he would be working the next however-many hours FOR FREE...that his boss had no intention of paying him. Unfortunately, we, as an industry have royally shot ourselves in the foot on that one with all the "free" we offer. It doesn't help us, either, that the really good agents make the whole process LOOK SO EASY to the consumer. The consumer has come to believe that because it LOOKS easy, it IS easy. We all know that's not the case. And face it....the public has gotten used to our "free" offers. This re-education process is slow and painful (for all of us!)
Thanks for sharing, Deb, and reminding us how we each need to be vigilent in assessing and communicating what we are and are not willing to give away!
JudiB
Thanks, Judi.
Yes, Brad was a jerk about it. Interestingly, he is SELF-employed as a painter and I'll bet he wouldn't give a customer a "free" room paint job just to get their business. I wish I'd thought of that when I was talking to him. Funny how he thought my consulting model was terrific until it came to him.
And, I do feel good about standing up for myself. That was the positive outcome to this difficult situation. If he doesn't respect my knowledge and experience enough to pay for it, then he can find someone else to "give it away." To quote Bob Dylan (and show my age)- "it ain't me babe..."
Deb
Well said, Deb!!! One of the things that this whole process has given me, besides some actual "tools" to use in my business, is the occasional (and much appreciated) EPIPHANY. Probably the biggest for me personally was Mollie's excellent explanation of why commissions are they way they are...they're deferred risk (rather than "winners pay for losers", which was the misguided explanation I previously bought into).
But there have certainly been many others. I think it was Merv who said he only does CMA's for real "clients" rather than including them (as I think most of us do) in a pre-list marketing presentation. That was another of my AHAAA moments. I abosolutely LOVED that approach. And probably because I BELIEVE the premise....(1) when I meet with a prospect, they are not yet a "client"...I owe them no fiduciary; (2) the prospect generally HAS NO KNOWLEDE OR UNDERSTANDING OF FIDUCIARY, and is generally willing to share their motivation...AND SHOULDN'T...and should be advised as such; (3) there is no "ONE PRICE" for a house - determining an appropriate recommended asking price (range) for a PARTICULAR seller can only be done by UNDERSTANDING THEIR REAL NEEDS/MOTIVATION; and (4) if the prospect is not going to "hire" me, why would they really care what I think their price should be (other than to use my "number" against another agent).
To me, the whole premise of the FREE CMA is a lose/lose situation. The agents who don't list the house lose because they've done all that work and will not get paid; the owners of the homes lose because they're risking giving away thou$ands by disclosing their motivation to people who are NOT their agent. All this is making me think someone should write a book called THE REAL COST OF "FREE"!
JudiB
I stopped giving free CMAs even before I became an ACRE. I realized that what I was doing was giving sellers a tool to use in order to play me against other agents, or, to have enough info to price their home as a FSBO. I believe that was the beginning of my emancipation.
When I made the change, and had a lsiting presentation, I held the CMA back. When the prospect asked me to give them the CMA, I told them I provided CMAs only to my clients and that as soon as we had a listing agreement I'd be delighted to provide them with the copy.
Most times, I ended up with the listing. Nowadays, I approach all visits as consultations and the issue becomes moot.
Deb
Deb,
First, let me say AMEN!!!! Question....when someone calls and says "we're considering selling our home and would like to have an idea as to what it's worth"....which is different than when they say "we're planning to move and are interviewing agents"...how do you approach that first prospect? I think that's where I still feel a certain degree of trepidation here. They might be really good seller candidates IF their home would be in a particular price range...but they also are likely not to want to pay a consultant fee for a CMA when every other agent in the world is offering to provide one for free.
How do you approach this situation?
JudiB
Good job Deb!
Just to let you know, when speaking with possible clients, I bring this very subject up with them. I ask what they do for a living, then I ask 'what if your boss asked you to work on the weekend or at night, but said you wouldn't get paid for it? On the other hand, he wouldn't fire you if you didn't agree to work for free, how productive would you be while thinking about your move up the corporate ladder?
It hits home with them, everytime, so don't be afraid to talk about it. It's best to set the deal up honestly and frankly from the get-go, so everyone is on the same page.
Our new motto is "no more free work!" Let them go waste someone else's time, I'm real happy to sit on the beach with an umbrella drink or go get 3 more transactions, rather than waste my time making no money from someone.
When prospects (suspects?) are interviewing you based solely on your price recommendation and commission, they are looking at the wrong page. They need to understand their house is only worth a certain price - and that is what a buyer is willing to pay them NOW.
I've been on listing appts where the sellers left all the CMA's on the table (probably because they thought I'd be intimidated? lol! NOT). I tell them right up front, what I can do, what I will do, what their choices are based on their motivation. If they only want to list with the person who offers the lowest commission and the highest, non-saleable price, then I can refer them out to agents who like to work with buyers.
These agents will offer low commissions and state high prices because they will most likely make 3 or more transactions off of the sign in the yard, or other marketing. Does that sell the sellers house? No.
So, I talk about working together, as a team, and if we both agree that is a good thing, and they grasp the reasoning, and list the house with me, THEN I go over pricing.
I do not buy listings, and I never leave my CMA's behind. if they want my expertise, they hire me, and the pay me. It's different, but if you get used to asking questions, really delve into their needs, goals and what they want to accomplish - this system works like a charm.
Why?
Because people will do business with people they like, know and trust. 74% of the consumers deal with the FIRST agent they talk to that they like. 80% start their search on the internet....so all you have to do is pass the 'breathing test' as long as they like you.
A new agent could get a deal away from me, even though I have 27 yrs experience, if they like him or her better than me and they talk to them before me.
Be likeable, honest and trustworthy, and be the first responder and you'll make more money. Speaking along those lines as to first responder, you may want to check out getting this cool realping button, check it out at http://www.realping.com and if you like it - let me know, I've arranged a great deal for those that want it, but you need to respond during the next few days.
You can play with it on my web site at http://www.HomeOrlando.com after reading the site info. It's cheap, it will differentiate you, and you'll be the first responder.