Entry by Bill Travis

Seller wanted Consultation

  13 Comments

Recently a seller emailed me for a consultation. She had seen a lot of my writings and knew that I was very knowledgable of her area.

She said she needed more infomation to make a decision on what to do with her current house. Sell now; sell next year; rent, etc. She was moving out of state and would buy a home there. She said the Realtors she had spoken with would not give her any advice; they just wanted the listing.

She said she would be willing to meet me at my office, or at a coffee shop, and she would be willing to pay me for my advice.

 

I gave her my available times, and told her I would get more information from her regarding her needs, her willingness to be a landlord, and provide current market analysis and trends, then offer her an unbiased opinion of which decision I think will be in her best interest. Also, I said if you elect to sell, I would be willing to refer her to a good Realtor to work with.

I told her we would meet in my home/office; that my consulting fee is $150/hr and I expected it would not take more than one hour.

The email response from her was. "Thanks for responding, but I think I'll pass".

While I believe the presentation is extremely important to the consultation model, this one has me perplexed.

  • She contacted me requesting consultation
  • She said she was willing to pay for my time
  • She was willing to meet at my office, of a coffee shop
  • She knew who I was, and knew my reputation
  • I responded immediately, explaining how I would go about helping her.
  • I wasn't going to solicit the listing, but instead, provide unbiased advice.

There may be one or a combination of several reasons why she backed out:

  • Her idea of the amount she would pay me was not in line with my actual fee. (Maybe she thought she would give me 5 or 10 bucks for my time)
  • Perhaps she didn't want to come to my office, since it is in my home.
  • I didn't do a sufficient job of selling what I thought was already pre-sold.

Perhaps I should have congratulated her on making a decision to pay for unbiased consulting, because that will most likely save her thousands of dollars if she makes the most economical decision for her situation and the current market, and certainly give her peace of mind that she is making the right decision.

Perhaps that prologue would have better set the stage for discussing the fee amount.

 Also, perhaps I should not have used the words "home/office". If I don't know someone I never meet them at my office first. I always meet them at a public place. From the forum where this person and I participate, I felt I knew her from her writings, and would not have been uncomfortable having her come to my home office. I also knew her name and her address.

 After analyzing this, I'm leaning toward the decision that I did not use the prologue of what the consulting would do for her in terms of saving money and providing peace of mind. So I did not properly prepare her for the fee.

Most people are so accustomed to getting "free" info from Realtors that they can't understand a fee for service or consultation that may range from $75-$200+ per hour.

 

13 Comments

Bill, I am sure you did a great job. People expect us to do everything for them at very little cost or no cost at all. This model of consultant will take time to catch on but it is still our industry in general that perpetuates our worth or lack there of. It is nice to see how you analyzed your presentation and are willing to make adjustments. Keep us posted on your results as you go.

Bill,

Fantastic topic for discussion.

While reading your post, I found myself with more questions than answers - actually, I don't have any answers off the top of my head, lol. Hopefully I will make time to revisit this post and comment further.

That said, questions that immediately came to mind include:

Why the offer to refer her to someone else if she decided to list? (I'm assuming that you don't list any properties????)

Did you probe further for what value she might place on your services?

Have you considered calling her and simply asking why she decided to pass?

Initial thought:

Yeah... offering to meet at "home office" may have been a turn off.

........I hope others chime in with their thoughts. Have a great day!

Tim

I think offering one hour of free, face-to-face consultation provides the client with an opportunity to determine the value of what they will get, as well as the consultant can interview the client, and start the needs assessment.

Bill, it seems that you have already done than through the forum that you both participated.

Bill, thanks for posting this. I have had similar requests and a good example is at Consult and refer under Best Practices. I think I would have approached it a little different as $150/hour to meet and talk seems a little vague other than paying for an opinion. An opinion may be better based on an evaluation of her circumstances AND her property.

I would have advised her that my approach would be as follows and would take about two hours of my time at $150/hour:

  • Obtain property address to do preliminary research on neighborhood and comparables.
  • Research rental market in her area and home type.
  • Agree to meet her at her home to do a visual evaluation and better understand her objectives and options.
  • Commit to providing a written evaluation report and options available to her within 24 hours of the meeting.

Agree to do it for a fixed price of $300. What makes this approach perhaps more desirable is:

  • A fixed price, no ambiguity.
  • A written consulting report with data to backup your suggested options as a tangible deliverable as apposed to simply your opinion. Tangible deliverables are perceived to have greater value.
  • Meet on her territory, not yours.

For these reasons I believe you would have had a better chance of engaging her.

Bill,

Although your intentions for just giving advice and not soliciting the listing was perceived by you as being non-biased, the person felt uncomfortable paying what she may have thought an excessive fee.

In this case you might have treated your consulting fee as a non-refundable retainer fee. Advice in exchange for an advanced fee that would be credited towards the listing fee should you get the listing.

This is a non-threatening approach and the seller will feel they will get the money back when the property sells.

 

An added note prompted by Michael's suggestion:

The $300 takes care of some of the "Preparing to sell" activities in SmartPlan if you were to take the listing; selling or renting.

This prospect said she was willing to pay. Perhaps she needed an initial FREE consultation first so that she could lay out her needs and then you could have explained how you could help and what the fees would be for that help.

As for meeting at home office... we never do this even when we represent friends or family. I just have a "thing" about keeping business and personal life apart. 

Great comments by everyone; thanks.

She said the other agents were just wanting to get the listing. Therefore, the reason I offered to refer her to another agent in case she wants to sell, is so she would see my information as being ubiased and not information that may be skewed in order for me to get the listing.

I see the error in my thinking.

I may do a letter that explains the consulting process a little further, and use the suggestions here to follow up. I like the idea of the complete written report. I'll have to develop a template so I can do a written report fairly quickly.

 

Thanks for sharing.  The dialogue presents information that I can learn from, especially as a newly licensed agent.  I look forward to when I am asked to provide consulting services.

I'm up in the air about free consultations. Where do you draw the line for answering questions that woud undoubtly fall under the realm of charging a fee? Your free consultation may answer her questions to a point where she doesn't need your services.

For listings I'm having good success with submiting (emailing) a proposal to prospective clients. It outlines a little about my company, type of listing agreement, retainer fee, listing fee and a marketing plan. There are no surprises when the seller/landlord calls to make an appointment. They know exactly what to expect. If they don't call, I haven't lost anything but the time to put the proposal together.

For consulting services, after a discussion over the telephone about a prostpective client's needs, I submit (email) a Consulting Agreement. This agreement is a contract and outlines the services to be performed (as Merv states), the terms, time devoted to the tasks by consultant, place where services will be rendered, payment, independent contract status and a confidentiality statement.

No surprises and everyone knows what to expect. I also keep detailed records of time spent on tasks which is submitted to the client. I find that clients don't mind paying, if they know exactly what they are paying for.

The purpose of the one hour free consultation would be to ask questions about the seller and about the property and also answer questions about your services and how you operate. 

If asked questions about the property, you should answer honestly by saying that you must take an hour to do research and give her a written response with your objective well thought analysis. It would be fair to seller to substantiate your opinions with specific evidence in a one page written letter.

You can collect half the fee up front with the remainder of your fee due after you deliver the written response to her questions.

Hmmm

You can see my example of the report I produced for the client in the reference I used in Consult and refer above at Property Evaluation Report in the Library.

A written report is typical of consulting engagement deliverables in many industries.

That's what I was thinking, too, Lester. The initial consultation is to determine what the consumer needs and to discuss how our services can meet those needs and the fees for providing those services.

Given the perception the public has about us already, it will probably take quite a bit of retraining on our part in order to sell the public on the value of our consulting services. We understand the difference between biased and unbiased information but I doubt if the public really does... and, I imagine most agents woud argue that all their advice is unbiased. 

This page contains a single entry by Bill Travis published on August 22, 2011 8:37 AM.

Time Docket was the previous entry in this blog.

Has Buyer's brokerage run its course my answer may surprise you is the next entry in this blog.

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