Dina and I had a real interesting appointment this morning. One of my clients, a couple who had bought a home with me five years ago, called last week saying that they were thinking of doing some remodeling work but wanted to compare it to instead, selling their present home and buying another. They called because they had heard about my consulting options, and that was exactly what they were looking for - unbiased advice on their options. I told them that it would probably be a couple of hours of work and that I/Dina charged $150 per hour for this type of work.

Want to hear amazing - they didn't blink an eye! In fact, the comment they made was that $300 was very reasonabe to help them get the info they needed to make a decision. The wife even told me on the phone that it "was a good thing she knew me since they would never call a regular agent - they would never trust their advice to be objective since one option would pay them and the other would not." She also could not understand why our industry doesn't offer different options like I do. I told her about ACRE and how we're tyring to change that.

Focusing on the highest professionalism in everything we do and using the SmartPlan to make our fee transparent is priceless. By the way, this client chose the Shared Risk approach and paid me $2,200 in the first 30 days of the engagement with the balance at closing.

Here's a note I received from a recent listing client that settled on their sale October 1st:

OK, so I'm embarrassed to admit, I'm an ACRE that still seems to do business the old fashioned way. I have presented the consulting option to sellers, and they've chosen the full listing package. However, I've truthfully been reluctant to ask buyers to pay up front. In one particular instance, though, I made the leap effortlessly when a person contacted me after they said they had read my column in a local rag. She told me she had some property in town that she needed to consider putting on the market and wanted to know what her options were. I told her what I would charge to do an analysis. She didn't blink and wrote me a check. This is the interesting part, I had assumed she had read my column on consulting and that she was expecting this. Turns out, she had only read a column I had written months ago on commercial real estate and had never heard of consulting, yet she was wiling to pay for my expertise.

I honestly haven't had the confidence to introduce the concept of asking for money up front when there are so many REALTORS in my town waiting in the wings to give it up for free. I've avoided what I had anticipated to be a difficult discussion until I thought the client already knew what was in store before they contacted me.

I've learned my lesson and I'm wiling to share. Anyone waiting in the wings to actually jump in and practice what's been preached, learn from me and NIKE. Just Do It.

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

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.

Here is an example of the consult and refer approach:

A few weeks ago I received a call from a potential client who asked if I would do a property evaluation in preparation for listing their home. I replied that I worked as a consultant, it would take two hours of my time at $175 per hour.

They agreed, I did a bit of comparable research, met them at their home (they had the check in hand for $350), gave them some verbal advice, took notes and subsequently sent them a written report (Property Evaluation Report.pdf). I also sent them a proposal for the listing using my Shared Risk approach being paid up front for my marketing. Because of cash flow issues, they were not able to accept my proposal although they were impressed with my professional approach and thoroughness in presenting my analysis and wanted to hire me.

As a result, I declined the listing and referred it to a friend with another broker. He took the listing with a traditional commission approach and is willing to pay me a 20% referral fee if and when it sells. It is a $1,000,000 property in an upscale Northern Virginia neighborhood.

There is more than one way to earn a living using consulting.

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

I am looking forward to being part of this community and organization.

I am proud to say I had my first "paying" consulting job last night. Based on the exercise to determine what to charge, I admit to undercharging. I was contacted by a former client and great advocate to help them make some decisions. They are teachers, and only one worked this year so she could stay home with their new baby. They don't have much money and were happy to pay me for the cost of a CMA, and 2 hours of consulting services to determine whether their next step will be what to improve to get ready to move in a few years. And of course, using me to market their home! :)

I handed them an invoice, and they handed me a check. Nice!

So, thank you for having me ready for it.

Thanks,
Carole

Hi folks,

I've been a litle quiet lately because I've had a lot going on but wanted to take a quick minute to give you an idea of how I've recently been working with investors.

One of my investors gave me a referral for another investor who is unfamiliar with Richmond. He is from out of state and intends to buy and sell a minimum of 10 fixer-uppers per year.

I had a great phone interview with him where he explained that being unfamiliar with the specific neighborhoods, he needed help determining the best offer price and estimated subsequent value of the property after he finished his rehab/renovation. After the work was done, he would want me to resell these for him.

One of the many aspects of consulting that I love is that it truly is whatever works for you and the client. Not being boxed in by the commission structure is so empowering!

I'm in the process of developing a specific plan for him that includes what services I'll provide, how I will be paid for the analysis of present day value, estimated resale value, and marketing the property when work is complete. Because he is from out of state, he may opt for a commission based listing but he and I are still working that process out.

This is an awesome opportunity to fine tune my consulting program with investors and will be an ongoing source of income and subsequent referrals from him as well.