This quote below is from Seth Godin... I thought it was appropriate.

My take on pricing is that I do NOT create an hourly schedule for my consulting clients. I meet them, evaluate what is needed/asked for, and then tell that client my fee for the service. It is based on my past experience of how long it will take me to complete / how hard it is / how much hassle .... etc. It is not a formula. It is my gut instinct and that is it. I don't print a schedule in writing. If the client doesn't want to accept my fee then either we negotiate or he goes elsewhere. That would be considered "market pricing" -- If the fee is not "worth it" in the client's mind, then they won't pay. I rarely ever have anyone walk away. 

I think you all will find this post very interesting and I hope our voices will be heard loud and clear in support of the retainer. Please comment.

I am disappointed in the fact that I have scoured this site and can learn nothing about creating a contract. Being in California I would ideally like to find at least one of the 409 ACRE© graduates that does business here that would share the contract they use when a client decides to use their service. I am not one that will go off half-cocked and offer this type of service until I have things in place and a contract seems to be a necessity so I am sure most ACRE's© have one.

WOULD YOU PLEASE SHARE?

Why do people become Realtors? Would most of you agree, that the prime reason is to "make money" ? Yes, I know there are other reasons too, like "I want to help people" or "I get to be my own boss". Oh sure, there are many other reasons. So then, what kind of money does the average Realtor make? Are most Realtors today, in the "RED", just making ends meet, or truly in the "BLACK", financially speaking?

Last month, there was a fascinating discussion in the post Discounts, Rebates, Allowances and More. In that thread, Merv made a comment that I fear got lost in the shuffle and needs to be amplified:

"What if our industry NEVER was commissioned based? Erase it from your mind. Maybe there is a bit more service to be provided on the higher priced property, maybe not. Lets say the services are the same. If you apply the fee for service model to both price points are we being paid fairly for our services in either case?"

One of the most common "push backs" regarding activity based pricing from practitioners is something along the lines of "Well, with a commission, I'd get paid $12k and with fees, I'll only be paid $6k. I'm not leaving $6k on the table..."

To this I could respond in a variety of ways:

• IF the transaction closed
• IF the client didn't walk away
• IF I were putting in the same number of hours (NOT!)
• IF I were blond, blue eyed and 20 pounds lighter...

Please note that this uploaded spreadsheet is a SAMPLE form for use by all members and must be formatted and adopted for your own in your marketplace. By law, fees are negotiable and cannot be set or fixed among brokers.

Fee Schedule Rev 8.11.xls Flexible Fee Schedule available in Library Archive Catagory: Rates, Fees & Commissions.

Do my fellow consultants utilize any of the following:
 
Time Dockets recording their billable hour time and services performed ?
Client ID numbers and check for conflicts ?
Chronological Client Matter numbers ?
A file Chronology ?

This is a new post on these important issues and how they relate to alternative business models. There were many great comments off subject on the recent Ambassador Program Brainstorming Session Announcement which I will attempt to collect and move to here. To do this I have to manually modify the data base (literally) that supports the Exchange. This will be a time consuming process but, the comments are valuable enough to attempt to do this. It will take a while.

In the mean time, if you have thoughts on these subjects comment on this post.

Jennifer Allan-Hagedorn just posted Real Estate Commissions: "It All Evens Out" and "50% Of Something is Better than 100% of Nothing??" on Active Rain. It goes to the heart of our compensation structure and how we defend it.

I hope lots of ACRE®s chime in on this one!

This a strong. May be the best article I have seen on alternative compensations plans and the evolution of the industry.

http://www.ratetake.com/news/2011-06-24-4.html

Editor's note: This is the final article in a six-part series focusing on low-fee real estate business models.

Today I spoke with a trusted mortgage person with 25 years experience. She said that Fannie Mae and Freddie, etc, will not allow a broker to rebate commissions to buyer except to the extent of closing costs, which max at 6% for (or 4% max) depending on the % down payment. She said rebated to buyer of seller commission could not be on the closing HUD and not given to buyer outside of closing.

Do any ACREs have experience with this issue? any documentation?

A must-read for all ACREs: new article in Inman Conflict, confusion and risk in real estate commissions.

Up and above the fact that the author interviewed yours truly for the article, (and actually didn't misquote me!), I think she does a really good job in bringing in lots of ideas and opinions on this topic.

As is the case with Inman, you need to read the article TODAY if you don't have a membership.  Let us know your thoughts.

Here is link to Inman study on real estate agent compensation.

http://www.inman.com/reports/compensation2011/

Does the California Department of Real Estate allow our model?  Do they look at the payment for services as an "ADVANCE FEE"?

Hi all,

I just ran acros a flat fee MLS service that seems to provide (for a flat fee), something like we are doing and I was wondering at the difference.  They have different packages, but the one I am referring to is their $599 fee that provides everything, to include full service.  The website is www.whymls.com .  I read their full service menu and it seems to me, that we, as ACRE's, would provide more personalized service, but I am curious to find out what other's think.  Thanks in advance for any input :).

Brenda

I met Sellers today who just bought their Condo Last Year..Nice Condo Lots of Updating..Getting their Purchase price and updating, Regular Commission is going to be a Challenge..I offered to Do a Flyer, my CMA Advice so far and they post their Condo on the Bulding Builton Borard For Sale for a week, if it Sells they Pay me $500 for my time todate and $125 Hours if they need me to help with a Sale, any Realtor calls to referred to me...I though about asking to be paid $500 Now, but thought it's only for one week then I'm listing it at my Regular Commission...

I thought you might like to know

I don't recall reading how to address the situation or question of reverting back to fee base pay after an agreement has been made to pay the commission and you have gone all the way to the day of closing and the client thinks or knows that they made an error in there decision to go commission as compensation.I would think that if that commission agreement has been made there is no turning back. I understand that the fee based agreement can be applied to commission.Thank You. 

Hi Everyone,I am jumping right into this,One week Old. I have a client who has used Help You Sell in the past. Obviously he wasnt happy because he now is working with a Realtor and I have worked on 3 transactions with him in the last 9 months.  But have had to drop a half a point on the sellers side each time. That being said he is interested in my consulting as a way to save money. He use the HelpYou Sell model as a comparison and if you read there service description it sounds similiar. Help me with the difference for you who have that experience. Thank you 

Is anyone actively doing short sale negotiations for clients? How are you making money? Are you negotiating a commission or a fee as part of the deal with the bank?? I had a call yesterday that prompts me to figure this out quickly in case she decides to go this route. The home owner doesn't have much money to pay for anything. Anyone know how attorneys who do this get paid?

Thanks, Melinda

Got my ACRE designation just days ago and already have 2 consulting appointments but I have a question.  I will be asking for a set amount up front as a non refundable deposit but as for the remaining balance (if they choose a program other than commission) I will be expecting it at settlement or 3 days before they remove their property from the market, but am concerned that makes for an open ended contract since they can keep the property on the market with no intention to sell for months or even years to delay paying the balance of my fee.  Any suggestions on how to overcome this dilemma? Would appreciate any advice on this matter but please help me soon I only have 2 days before I will need these answers. THANKS!