Ok, as I was saying when I welcomed Linda, my board here in Richmond just clarified the subject of charging for CMAs or BPOs.

In an article in our recent CVRMLS Board magazine, the author pointed to the Code of Virginia Secttion 54.1-2011.A which states "It shall be unlawful to enagage in the appraisal of real estate or real property for compensation or valuable consideration in this Commonwealth without first obtaining an appraiser's license in accordance with Board regulations."

We can still perform these duties, we just can't get paid for them, or else, we would also be in violation of Article 11 of the Code of Ethics by providing services that are outside our normal course of business.

Of course, I disagree with this interpretation and have been charging for CMAs in my previous consulting efforts because I am not trying to perform an appraisal nor do I represent the work product as an appraisal. it is merely an agent's professional opinion of market value. But, I'll conform just as Linda and, others, I'm sure, will have to do as well. There is so much more to what we offer than just doing CMAs.

Merv and Susan M, I'd be interested in your take on this subject. And, Martha , since you are our board's recent past president, do you have any insight into this matter?

Deb Orth
Keller Williams Realty
Richmond, Va

Never underestimate what you have to offer as a Consultant. I find that often the smallest tasks can result in bigger opportunities, and if they don't, they are always profitable as stand alone transactions. As an example, last week I made $150 for an hour of my time, just advising an investor whom I had never met, whether or not he should buy a particular property for renovation and resale. I advised him against it and converted him to a client.

Tomorrow, I'm meeting with a woman who inherited her mother's home. She wants an assessment of its market value. The next door neighbor, who happens to be an attorney, has made what she feels is a low offer to buy this house from her. By the way, it's not on the market. I'll be meeting her there to view the property and then I'll return to my office to prepare a competitive market analysis. She is paying me an hourly fee of $175 and, if she decides to negotiate with the neighbor, she will have me handle the negotiations and contract as well as take it from contract to close so as to protect her interests. If the deal does not go through, then we will sit down with the Smart Plan to determine what services she'll engage me in the sale of the home. WIN-WIN all the way!

Deb Orth
Richmond, VA

In addition to putting your ACRE info in your email signature, adding the logo, adding a link to The ConsultingTimes.com blog, telling your sphere of influence that you have incorporated Consulting into your practice, and all the other great suggestions that have been made for promoting your business, don't overlook the power of sharing this with the agents in your office.

You are doing them a favor by showing them how being an ACRE can benefit their business. I'm not shy about telling people in my office what I'm doing. I don't make big announcements or yell it from the rooftop but I do share it with any agent with whom I'm having a related conversation.

An example of how this has recently benefited me is that our assistant team leader referred an agent to me because the agent wanted to find a solution for one of his clients that involved getting the house sold and netting the most amount of money possible since the money situation was very tight. This agent had sold the client a new construction home and getting his existing home on the market and sold ASAP with as little expense as possible was key to the new deal making it to closing. The agent's client was talking about going with an MLS Only company. So my Assistant TL told the agent he should talk to me because I do consulting.

I've spoken with the client and sent him the Seller Needs Analysis. I don't have a warm fuzzy about him because I think he believes he really can get what he needs from the MLS Only company for just a few hundred bucks. Whether or not I get the appointment to sit down with him or whether he decides to go another route, it is still a big WIN because it was referral from within my own office. Think about it...a lot of agents are not going to want to work this kind of business model but they'll be willing to refer business to you. Kenny and I had not worked out how and what I'd pay him for the referral but that was really not his issue. He just wants the best thing for his client. And, get this....he will probably sign up for the ACRE course!

On another subject, I wanted to share how even the smallest consulting tasks can turn into a very nice pay out.

Some time ago I consulted with an investor who was over his head and upside down on a rehab property. He was in the position of having to sell an unfinished renovation at much less than what he owed the bank. I worked with him by helping him attempt a FSBO sale and when that didn't work out finally recommended that he consider auctioning it.

I referred him to a local auction company that has great success in selling properties that just aren't moving in the conventional market. In addition, they pay a generous referral fee based on the final sale price. The auction was yesterday. The investor got a much higher price than he'd been offered previously, and I will get a check for about $4000 when the deal closes.

So, while I made $500 for the consultation, I made way much more by referring it out to a realtor friendly auction house. A WIN-WIN all the way around!

Deb Orth
Richmond, VA.

This is a question for anyone who has consulting clients under an Exclusive Right to Sell Listing Agreement, or who may have an opinion.

One of my consulting Sellers is a bit of a pain and a "know it all." We have an Exclusive Right to Sell Agreement with a Consulting Agreement as an addendum. Among the services provided was MLS entry (obviously).

We have a contract with a First Right of Refusal. The contract was brought to us by a ReMax agent. No problem because the property can still be marketed and can be superceded by another offer with a 48 hour kick-out.

The issue is my guy wants to be removed from MLS because he thinks he has a much better chance of attracting non-represented buyers if he has a FSBO sign out front. He's hoping he'll get another contract where he doesn't have to pay a co-broke fee.

Of course, I have advised that taking it out of MLS limits his exposure and there is no guarantee that a non-represented buyer will offer an acceptable contract and that he could be missing other agent represented buyers with a good contract that would allow him to close sooner rather than later. (sorry for the run on sentence :))

He has already paid me a retainer and another installment of the consulting fees so I'll get paid regardless of how he wants to go with this. My thought is to release him from the listing agreement and revise the original consulting agreement to reflect the services that have already been provided and what services shall continue to be provided reemphasizing the balances due and when due.

Have any of you had this experience? If so, what was your response or approach?

Deb Orth
Deb@RichmondHomes4You.com
Richmond, VA

Good morning.

If any of you have investor clients, they can be a great source of consulting business. I have my usual clients and on occasion I get a referral from one of my lenders.

This is the case with my new investor client. He is a brand new investor who "went it alone" and bought a foreclosure at auction. Now he needs to know what he can get for the place after he has repaired or renovated it.

I have drawn up an agreement to provide consulting services where I will visit the property with him and his contractor, analyze its resale potential, provide a Competitive Market Analysis, provide ongoing consulting services during the scope of the renovation, interact with the client and client's contractor during the project either in person, by phone or email, and meet with client and contractor upon project completion to ensure all work has been performed in accordance with client's agreement with the contractor.

I have estimated that this will take anywhere from 25 - 30 hours of my time from start to finish. He will pay me a retainer fee of one half of the fee at the signing of the consulting agreement and the balance 30 days later.

When he puts it on the market, he has the option of listing with me at my normal commission or entering into another consulting agreement with me based on his needs, ability, and interest. If he chooses to enter into a traditional listing agreement, I will credit him the advanced fees he has already paid me and this credit will appear on the HUD.

Deb Orth
Deb@RichmondHomes4You.com
Richmond, VA

Following up on previous posts, I want to reemphasize that getting a Buyer's Agency Agreement in addition to whatever Consulting Services Agreement you come up with, is IMPERATIVE.

I won't go into all the gory details but suffice it to say, against my better judgment and in a moment of temporary insanity, I didn't follow this practice with the buyer I referenced in a previous post. We came toward the end of our initial period covered by the retainer fee when she announced she has been independently going after FSBO sellers and from now on, all she wants me to do is work MLS Sellers on her behalf while she hits the FSBOs and with NO consulting fee to me.

After I pulled all my hair out and put it back in, I had a dialogue with her about it, told her I would not compete with HER to find a property for HER anymore than I would work for her when she might also use other agents. The end result was I fired her. Another lesson learned....

Deb Orth
RichmondHomes4You.com
Richmond, VA

Responding to the latest questions about working with buyers, I've been making some of this up as I go along but I'm refining it more and more. Don't be afraid to experiment with how you do this business.

With the price of gas getting really outrageous , I'm even more mindful of the cost of doing business. I fill up my car 2 to 3 times a week and it costs me about $60 each time. So, I'm not driving folks around who want a tour guide, don't know what the heck they want or where they want to live, or how much they want to pay. I should act like FSBOs and say ONLY SERIOUS BUYERS NEED APPLY. LOL

Anyway, what I'm doing now is saying " Mr., Ms., or Mrs. Buyer, I'm delighted to be your personal Consultant in the search for a home. Because I value my time and yours, we need to determine how much driving around you want to do or want me to do. If you are in the exploration stage - deciding what neighborhood or part of the area you want to live in, then I can send you listings that meet your basic criteria and you can drive by the homes and neighborhoods. If something interests you, we'll go out to see it together. If you want ME to do the initial investigation of neighborhoods and preview the properties before you see them, my hourly Consulting fees will apply. I take a minimum deposit of an equivalent to 10 hours of my time. If we write a contract that closes, I will rebate 50% of what you have paid in advance at closing."

If the buyer wants to pursue FSBOs, I tell them that I will advise and consult with them at my hourly rate. If the FSBO agrees to pay my Buyer's Agent commssion, I tell the Buyer I will refund the entire consulting fee back to the Buyer at closing. If not, my hourly rate applies and I will take them from contract to close for an addtional fixed fee.

If they don't like any of the options I've offered, I will refer them to my Buyer's Agent and SHE can drive them around to her heart's desire.

Deb

A few weeks ago, a buyer who had been looking at homes for sale by owner, was referred to me by one of my regular clients. She felt ill prepared to deal with the sellers but felt she could get a better deal if she could offer a contract where a buyer's agent commission was not a factor.

Because she was ill at ease but still wanting to find a home which included looking at FSBOs, she asked for my help. After some discussion, I agreed to work with her and got an agreement that she would allow me to show her homes that were in MLS as well as FSBO. For a retainer fee of $500, I would work with her and I told her that if she put a contract on a home either in MLS or with a FSBO who agreed to pay a commission, I would rebate the $500 to her at clsoing.

We haven't settled on anything yet, but with the investment in time and gas I've made, I'm still ahead of the game and certainly ahead of where I'd be without a consulting agreement. I probably could have charged her more, but since this was the first time I'd really put this approach into action, I under charged her.

The point of this story is that you shouldn't be afraid to get started. Just do it. No one but you knows that you're new at consulting. The client certainly doesn't so don't hesitate to use this fabulous set of tools we have to make a real difference in our own businesses but also in the lives of our buyers and sellers.

Deb

Hi everyone,

In March, Mollie was kind enough to upload a series of postcards in the Document Library targeting FSBOs. I liked them so much I created cards for myself with only a few changes.

Today I had a call from a FSBO who is more than interested in getting some help. He is an out of town owner and knows that it will be a challenge to try to sell without some help. I've sent him the Seller Needs Analysis and have a follow up with him on Monday.