Entry by Judi Bryan

Consulting with Homeowners

  2 Comments

THIS IS LONG, FOLKS (SORRY)....BUT HOPEFULLY HAS SOME GREAT NUGGETS IN IT FOR YOU!

We just completed our very first Teleseminar for 2008 - the topic being "Consulting with Homeowners". What follows is as much of the "essence" of this discussion as my dancing little fingers were able to capture...but hopefully it will be sufficient to be a "reminder" for the great group who participated...while also offering some food for thought for those who were not able to make it. We hope, whether you were able to join us today or not, the following will jog your imagination, get the creative juices flowing, and generate some of those fabulous AHA!!! Moments that some of today's participants experienced. Hopefully, you'll want to continue the dialogue here...ask questions, make comments....we'd really LOVE your input!!!

"Homeowners" is a group that Mollie refers lovingly to as "the Orphans of Real Estate". I'm not using the term "lovingly" loosely here, either. How can you NOT love someone who needs your help, appreciates your efforts, and is willing to fairly compensate you for your expertise!

And Homeowners are definitely "orphaned" when it comes to real estate. They often have needs that we can meet for them, but they've been orphaned because they are not planning to "necessarily" have a real estate sales transaction, so they generally don't call us for that help. And the fact of the matter is we are likely the very most qualified to provide them with the service they need...but they don't believe they have a means of paying us in any other way but via a sales commission. How do you do that with "no sales? I used the word "necessarily" above because there are times when a transaction "might" ensue...but the fact is that a transaction is only one of the potential options they are considering.

They ARE in need of information (and more than that, the INTERPRETATION of that information!) There's all sorts of online evidence of the fact that consumer's WANT that insight...Zillow, HouseValues, etc., would not even exist if that demand weren't there. And we also know they are willing to PAY for information and help. They hire a "fee appraiser" to give them an idea of the value of their home, and they certainly pay for that. But the fact is that appraisers do something very different that what we do. While they primarily look at historical data in terms of "recent sales" information, and they also consider the "replacement cost" or "income approach" (which are all fine tools), but they generally don't include a lot of information and interpretation about current market conditions, active competition, absorption rates, etc. And all of that information is critical in a market value assessment. And they're willing to pay "up front" for numerous "limited services", beguiled by the "low fee" and not understanding that they are missing the most important ingredients that an agent has to offer - fiduciary council and true representation!

So what kinds of situations might cause an "orphan" to want your help (if they knew you could provide it?)

• The Move vs Improve question
• Determine whether or not a move now is a good idea
• Challenge a tax bill
• Challenge a reassessment
• Determine whether this is a good time to refinance (what kind of equity do they have in their home?)
• Evaluate how much insurance you should have on your home

Let's take a closer look. The question came up in the discussion (my apologies...I tried to keep track of who asked what, but I know I often didn't get who asked the questions) which I know many of us have asked. That question was "why, when there are so many agents advertising that they'll provide this information for FREE, would a consumer even consider PAYING a consultant's fee?"

Great question! Paula and Deb both chimed in with Mollie with the answer...and when you give it some thought, it makes perfect sense! Paula spoke about establishing relationships with your customer base that let them know that, as a consultant, how you work is "different". Deb added "it makes all the difference in the world when they understand that the ONLY "agenda" you have is to serve their needs...because that is exactly what they hired you to do. When you do your evaluation, you can be totally unbiased." That's a huge difference between the true consultant and the traditional agent doing a "free" CMA. Free is NOT unbiased when only one outcome enables the agent to get a paycheck.

Mollie brought up another good point based on how she approached consulting with homeowners. Let's say you have been hired to do a "move vs improve" evaluation. You've completed your assessment and you've been paid your fee. Let's pretend that after considering their options, the owner decides it really makes the best financial sense to move after all. What Mollie has done...and the seller is aware of this "up front"...is that IF they decide that they prefer to sell, she'll credit their consulting fee toward their total commission due. This way they know they are not paying twice for the same service.

So the seller benefits because of the credit if they choose to sell. They also benefit because they know BEFORE they spend all that money on the room addition or the home improvements they were planning whether those decisions make any financial sense at all! How many times over the years have you walked into a home that was dramatically over-improved for the area and thought to yourself "why didn't they ask for advice before making this huge mistake?" Well, maybe they would have...if they knew they COULD have! And there's a subtle bonus in this as well....once they've paid the fee to you, and you've done a good job for them, they are wedded to you! And because of the quality and consistency of your efforts, you can acquire business you would never have had otherwise!

Steve then brought up "how do we get the word out"...what about advertising, classifieds, etc. Mollie suggested to first go to your sphere. There's a letter to your sphere in the Document Library. Deb did that early on, right after officially becoming an ACRE! It was funny...a couple of days ago, Mollie and I were on the phone with Joeann Fossland and we were discussing various approaches different people use for developing a comfort level with something new. Joeann started talking about the "just-in-time" approach. You know....that's where you get the word out, someone calls to hire you, and you HAVE to prepare something so you'll have it for ready for your appointment! Well, Deb...looks like you're our first to enact the ACRE JIT Approach!!!! [[[ giggles ]]].

Something else you could use (or adapt) is a brochure Mollie did based on her "What if" presentation. Take a look ... It could also generate some ideas.

Another thought crossed my mind (though I've got no links for it to share with you...at the moment anyway). Several years ago I attended a couple of Craig Procter workshops in Toronto. He's built a very strong real estate practice basically using editorial type advertising, a good IVR (interactive voice response) system, and great followup service. He also has some very power USPs (Universal Selling Proposition...or Universal Service Proposition, depending on your perspective). In his case, one that he was famous for was the "I'll sell your home for a price acceptable to YOU within xx days, or I'll buy it for cash!" Now, the consumer had to "jump through certain hoops" for that to happen, and, truth be told, MOST consumers, when they understood the details of the program, opted NOT to utilize the guarantee, but hired him using the more "traditional" program. But the bottom line was...IT GOT HIM IN THE DOOR!

Does any of this ring a bell? As I told Mollie when she was here in Chicago last summer, when I first became an ACRE (after having gone through Sweathogs, Mike Ferry, Craig Procter, etc.) I finally felt as though I have a USP that I not only can LIVE with, I can actually FEEL GOOD about it! How about "You don't wear one-size-fits-all clothing...why limit yourself to a one-size-fits-all agent?" or "Consumer Options Real Estate = meaningful OPTIONS for the real estate consumer" or "Why hire a 'consultant'? Because the only "agenda" the agent should have is to serve YOU!" (thanks, Deb!)

John mentioned he was in the process of setting up what he calls "edu-marketing" (great term, John!). He brought up the idea of creating some "special reports" to use in his campaign. I will say that the Procter "editorial" approach DOES WORK and might well fall in that category! It also uses the "special report" as the lure to get the consumer to call the IVR system. How about an "edu-marketing" report entitled something like, "When You're Getting that FREE Market Analysis, What are You REALLY Paying For?" Or "When is FREE One of Your Most Expensive Selling Expenses?" (Must say, I really like that one! LOL) This might be something worth looking into in your market. And constructed well, it not only generates interest, it makes that interest measurable and trackable.

Mary brought up another subject that I know many others have asked, and that is "what does the broker do with all those small checks?" The answer seems to vary quite a bit. Deb mentioned that her broker simply cuts her a check with each transaction, large or small. Someone else (my apologies, I didn't catch who mentioned this) said that their broker has an escrow account that the smaller amounts are added to, and either periodically on a schedule, or upon the accumulation to a certain level, the broker cuts the check to the agent. Whatever works for your and your broker!

Linda brought up a couple of other good points. How many times have you done work for someone that ended with them saying something like "I wish I could pay you for all this"? In the past, all we could say was "oh thank you for the kind thought, but that's not necessary" and graciously went on to another subject (while secretly thinking "gee, so do I!) Or what about the customer who says "could you run some ads to help me, or could you do up some flyers or a tour" or whatever else came to mind? Now you can do all that, and a whole lot more...and get PAID for it in something more than kind words of appreciation! And the coup-de-grace? As Linda said "this free CMA stuff has gotten very old, particularly when you know the odds are they won't be using an agent at all...how can your heart be in your work under those circumstances? And how much more thorough a job would you do if you were actually being PAID for doing it!" (Sorry, Linda, I know that was a paraphrase...but I think everybody gets the gist of it!)

Well, that about sums it up! Please feel free to add your comments, questions, ideas, concerns to the dialogue1 We got off to a great start (THANKS, MOLLIE!!!!). Now, let the fun begin!!!!

JudiB

2 Comments

All the comments and questions were great, but I think the best nugget I got out of this call was John's comment about edu-marketing. I LOVE the "when is free " idea!!

I'm doing a consulting project now for a guy who needs to sell his house, but it isn't in my AOE. I'm doing a seller needs analysis, cma, net sheet, and stats on who is the best agent I can refer him to. This will be a first for me, as he REALLY wanted me to sell his house on the consulting plan, but I just don't feel it is in his best interest for me to be his agent, although I can tell him who to use and give him all the great advice he needs to be successful at selling.

After explaining how I worked 'differently' from most agents, the unbiased 'what is best for you concept' really sank in with him and I could almost feel his ear glued to the phone! His wife was on another line so we could all chat together, but he hardly let her get a word in edgewise, so more calls ensued and MORE fees followed!

rofl- it reminded me of the billing song and for those who haven't heard it, go to the doc library and save to your desktop for those times you need a little 'boost' in getting used to charging fees.

This was a really fun experience because I knew I wasn't going to list the house, which frees you up to say things you might normally be hesitant to say. I had the opportunity to play around with some idea's that I wouldn't normally do.

I'm also going to have to put Merv's SmartPlan on a password protected page so I can go over the fees when on the phone with someone I can't meet personally. The seller lives in NY, so trying to explain this to someone you can't 'show it to' is hard. Thank goodness he was an engineer and very analytical! My point here is to 'think outside the box' as Mollie always says.

WHAT can you do with consulting that we've never thought about??? Let's make a list!

Wow! I am sorry I missed this call. It sounds like it really brings together some great minds to turn into MASTERMINDS! That's one of the very best benefits of being part of ACRE> This community is so sharing and helpful!
I'm hoping you each have the best year ever in 2009. You are on the cutting edge!

This page contains a single entry by Judi Bryan published on January 16, 2008 9:20 PM.

Charging (or not) for CMAs was the previous entry in this blog.

Buyer Update is the next entry in this blog.

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