Entry by Ron Stuart

Roller Coaster Ride with Buyer Consulting


The client couple, each a homeowner, asked me to assist them in locating and buying a building lot or an existing single storey home. From the start they ruled out the possibility of a condo. (Stay tuned!).

I am acquainted with one of them through a professional relationship, so there was awareness of my consulting oriented business model. They chose to be served in a consulting framework under which I would be paid non-contingently by the hour but not less in total than a certain minimum service fee for the project.

We looked at several building lots priced around $100K but none were suitable. Had they bought a lot, the co-brokerage of 2.5% and my agreed upon consulting fee would have been about the same.  (From here on watch for the ups and downs from a real estate agent's perspective).


Next they came across (yes, you guessed it) a new, to be built condo development and became enthralled with the idea of living in a new, upscale development with a beautiful ocean view and other upscale amenities. Soon, in addition to being in love with each other, they became sufficiently in love with the condo idea to sign a purchase agreement at roughly $500K for a new condo scheduled for occupancy 16 months out. (Consultant now looking at his comparably paltry consulting fees alongside of a juicy co-broke of 2.5%  and feeling a little bummed!). Guiding the clients through this purchase invloved a lot of detailed due diligence work - all chargable. To this point the consultant was paid about $3,500.

After a year of delays and uncertainty, the clients' patience wore thin and they decided to terminate their agreement because of non-performance by the developer. Imagine a salesperson's anguish at this point seeing their juicy, sale-contingent co-broke of about $12,500 suddenly go up in smoke!. (Consultant's relatively mdest, but already paid, fee looks better now!)

Next, the search resumed for a building lot again, or maybe an existing house, or maybe even a major renovation to one of their existing houses. The clock ticked, the consultant's fees accrued and the clients continued to be shepherded toward their goal. Beyond this, depending on the clients' course of action, one or both of their present houses will likely be listed - hopefully another consulting engagement, of course! (Consultant is now quite content).

Although the roller coaster ride is on-going, enough has been told to serve the purpose of this post, which is to assert that there's more to the ride than the issue of fees versus commission. Absent a sale-contingent commission in the picture, I enjoyed the freedom of performing exclusively as a trusted advisor to the client. I properly fulfilled fiduciary obligations without the conflict of protecting a personal financial interest in the transaction. A commission salesperson, on the other hand, constantly struggles with the reality that advice given in the best interest of the client may be different from the advice which would bring him closer to a commission payment.

Consumers, weary of the Bernie Madoffs, Conrad Blacks, Enron and Wall Street shenanigans of recent years will respond favourably to the transparency offered by an Accredited Real Estate Consultant. A well articulated ACRE proposal gets attention in today's world! How are you distinguishing yourself?

Thanks for your patience - the next chapter in my creative writing course is on the subject of brevity!



Great Post Ron, especially since some ACRE's still think that consulting offerings don't necessarily work with buyers since many still believe that the seller is paying the commission. Let me remind everyone that it's the buyer that brings the money to the closing table. It's the buyer that pays that commission over a 30 year mortgage.

I think we all relate to the pull of the commission: IF the transaction actually closes, IF the buyer doesn't pull out, IF you don't end up putting in so many hours of time that the big commission check in reality becomes minimum wage, maybe we'll get paid big.

But remember, the counter argument: if you set your rates and fees correctly with a fair profit, you can get rid of the should-a, could-a, would-a thoughts and instead know that you got paid for your time invested and paid well.

I invite ALL ACRE's to comment on this post - discussion is how we all grow and Ron's experience is ripe for discussion.


That was AWESOME! Thanks for sharing it! Whether as a buyer or a seller OR AN AGENT....HOW CAN THAT NOT MAKE GOOD FINANCIAL SENSE!

GreatJob! Please keep us tuned in! BTW...LOVED the little personal "reality checks" we all do. Big condo commission sure sounded nice until the deal fell and it all went up in smoke!

Might be something worth posting on the MEMBERS ONLY blog of ActiveRain!

Let me second Judi's suggestion Ron that the Active Rain community see this post if you're comfortable. Your experience really outlines the thought process we go through when comparing commission versus fee and the freedom to act as a fiduciary when paid non-contingently.

Sure, Mollie. I don't mind doing that. I suppose it requires setting up an AR account does it?

For those of you on Active Rain, I just re-posted Ron's excellent post with my commentary. If you're a member of A/R, you can view it at:


This page contains a single entry by Ron Stuart published on December 10, 2010 9:23 PM.

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