Entry by Lester Langdon

Rules for Real Estate Consulting

  6 Comments

1. In person and not by phone nor email

Your specific response concerning the amount of your consulting fees can create a negative response.

Watch this short video of an example of how a professional real estate consultant handles phone calls. Notice that they do to discuss their fees on the phone.

A real estate consultant needs more facts to determine how much time and effort is required to help the prospective client. It may be wise to look a real estate property before disclosing fees.

Doctors, lawyers and CPAs do not quote their fees on the phone or by email. Can you effectively buy a house or commercial property by phone only? Prospective clients must know, like and trust you before they become a client. If you are using an internet dating service, do you want to meet that person before you get married?

More ..... http://realtyconsults.wordpress.com/2012/03/09/rules-for-real-estate-consulting/

6 Comments

I haven't watched the video yet, but I will... 

About discussing fees over the phone or otherwise before you meet face to face, I have a few contradictory thoughts...

First, as some here may know, I posted my commission structure on my website (which included a shared risk option which most of my sellers selected). I really do believe that getting the compensation issue ON the table as soon as possible is a great way to get past it without all the drama that can ensue when you make your clients wait til the end of your conversation to let them on the secret of how much you charge. I HATE sitting through sales presentations not knowing what the price of the product is and having to endure the whole dog and pony show...

HOWEVER, from a consultative perspective - it makes all the sense in the world to MEET with a client and determine their needs before quoting a price. I mean, DUH. If you don't know what they need and the extent of the assistance they will want (and need), or the degree of difficulty of the transaction, it's only professional to analyze the situation before determining the appropriate price. And of course, if you are offering choices in service and payment, that will factor in as well. 

What I don't like is the whole "you gotta hear my sales pitch first so that you'll understand I'm worth every penny I'm gonna charge you" approach. When that  approach is taken with me, I brace myself for a loooooong and boring presentation that has nothing to do with me and my needs, but rather the salesperson's needs to show off their fancy software. A few months ago, I had to sit through a carpet installer's online presentation about how great the company is - and even the salesperson apologized for it saying that the company monitored how long the salesperson spent on the presentation and if he went too quickly, he got in trouble. 

Anyway, a bit off topic, but I agree that if handled professionally, politely deferring compensation questions makes sense. But when it's just part of a practiced pitch... eh... 

A sales pitch is canned and does not come from the heart.  I prefer to have a conversation. Just listen and ask questions then answer honestly. You may find it not necessary  to explain all issues because the client may already know and understand an issue or may have already reviewed my website explaining consulting (which I encouraged). During the conversation, I ask if the client saw the website. Often my help is already wanted before the meeting. The end result will contain a forthright discussion which includes an understanding of the pertinent issues, however it would be wise to discuss them in the order and manner with this article suggests. Last year (where does the time go?), a buyer Not from Texas, phoned and was already sold on consultants generally.  He paid an upfront startup engagement fee and got a nice rebate on the closing statement. We met only once, but talked by phone, because he did the legwork in Houston.

You're speaking my language... I have a couple of blogs working in my brain... one is called "Conversations, not Scripts" and the other "Real Estate Compensation - Negotiable? Or Customizable?" 

It really does amaze me that so many real estate agents (and those who train them) seem to be incapable of having intelligent CONVERSATIONS with people about their area of expertise (facilitating the exchange of real estate and related matters)... no, everything must be Scripted and Presented. Scary...

I hear you Jennifer! So much of the sales culture in real estate revolves around learning scripts. Frankly, I think it's because folks are genuinely uncomfortable with what they are "selling". The industry still hasn't dealt with the elephant in the room: how do you pass yourself off as an objective fiduciary when the amount of your compensation or whether you get paid at all is wholely dependent on the decisions the client makes that you're advising them on?

Now, if you were to acknowledge it and offer options to those who wanted to take that conflict off the table, how much more genuine could you be? Some folks, especially those who already know you would be just fine with a contingent commission. And those that aren't have options.

Same with the amount of our compensation: why aren't practitioners taught to acknowledge that contingent compensation is more expensive due to the risk that is assumed? Why are we instead given these canned scripts saying that "if I can't negotiate my own fee - how could I negotiate on your home?" or "my commission is thus -because of all the STUFF I do..."

Our industry is SO afraid of acknowledgement of the real realities so, instead we're give canned crap to regurgitate. And it comes across to the consumer as just that.

Well said, Mollie. And consumers recognize crap when they hear it even if they smile politely to our face. Every time I tell my husband (a typical consumer) about the latest nonsense I've read on Active Rain or elsewhere about how to effectively prospect for business, his jaw drops and he looks at me as if I've lost my mind. I can't tell you how many times he's said something along the lines of "Do you people REALLY think we're that stupid?" 

Apparently... we do. Well, not WE here at ACRE, but our industry in general! 

Great! I have been in the Real Estate business for now going on 16 years and one of the things I have detested from the beginning have been Canned Scripts or Presentations....whatever you want to call them.  This is a process which trainers and brokers have been preaching ever since day one.  AND to make things worst; all of these trainers tell us that this is the tried and true process.  You know I can recall in another business a few years ago, when I had to replace my roof.  I called a couple of roofing companies for quotes and what I get is a presentation.....Look I said I do not need a Canned presentation....I just want a quote.  In both cases, the sales person said that he HAD to give me a presentation explaining the virtues of their product.  Forget what the customer was after (that would be me).  I just wanted a price and timeline for doing the job.  The same holds true in the RE business and I think a lot of the problem comes from those same Broker/Owners, who told us when we first got into the business to just pick up a phone book and start at the back and call as many people as you can.  I told the Broker at the time....You Got To Be Kidding......Needless to say my tenure with that broker was rather short lived.  I agree with the premise that we are in the Communications business and by this I mean we are in the Conversation and Relationship business and not in Canned reteric. It would appear that the ACRE philosophy and direction; as well as what I hear from the vast majority of the posts I read is a positive and refreshing look at the business.

This page contains a single entry by Lester Langdon published on March 9, 2012 8:24 PM.

"List on Realtor-com" flat fee under fire by NAR was the previous entry in this blog.

Forget About ROI, Start Thinking About 'ROE' is the next entry in this blog.

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