In its November 2010 issue Real Estate Marketing (REM) published a guest column entitled "In Praise of Commissions." When I cooled down a little, I wrote a response, just published in the February issue, which is reproduced below, but one should first read the original article In Praise of Commissions for context. Apologies for the length, but I'm competing with Paula Bean for the record!

Another View of Commission (as published in REM, February 2011)

The Guest Column (REM November 2010) did our industry a service by raising the subject of agent remuneration, but the assertion that sale-contingent commission is the best compensation method for ever and all time perhaps deserves some scrutiny.  

Public response to on-line media articles around the recent Consent Agreement between CREA and Competition Bureau overwhelmingly cast real estate agents in a negative light, suggesting, among other things, that we are overpaid, under-qualified, self-serving, lazy etc. Little was said to suggest that we add much value to real estate transactions. A common thread connecting many of the negative comments was commission. Public opinion surveys repeatedly rank us embarrassingly low on the integrity scale. Our traditional compensation model only perpetuates this industry’s self-centric image in a day when consumers are demanding fairness and transparency.

We just had a question from an agent who's been working with short sales and wondering how the ACRE consulting model might (or might not) fit in.  Below is his question ... and my response. We encourage YOU to take part in this discussion ... what are your thoughts, concerns, and experiences when dealing with short sales, and do you apply the same or similar options with them as you would with the "normal" transaction.

QUESTION

I handle alot of short sales and have a question for you. When doing a short sale you cannnot charge a fee for you "extra" services. Not only is it illegal, it is unethical in my opinion.  However, within the ACRE program I am wondering if you/me/we or someonewere to get a license with DFI, would that make it legal and ethical??

I got a call from my sister over the weekend. Unfortunately, she'd getting divorced and needs to start looking for a new house in the Spring. But she was at the gym and ran into a friend who's neighbor would like to sell her house. Turns out that the neighbor had her house on the market a year or so ago, it didn't sell and she took it off.

To make a long story short...

It seems to me that offering an hourly rate for consulting services is limiting. I would prefer to offer a rate on a project basis or some form of a retainer fee which gives the client access to your expertise. I am not referring to a retainer fee that is common with attorneys in that the retainer is a down payment on the hourly work estimated. Does anyone have thoughts or experiences to share?

Thank you so much for welcoming me to the ACRE... I am looking forward to enhancing my skills as a Consultant as well as networking with all of you.