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Consumer FAQs About Real Estate Consulting

 

 

Q: How is real estate consulting different than the traditional way real estate services have been provided?

A:  There are two primary differences between real estate consulting and traditional real estate---unbundled services and non-contingent fees.

 In the traditional business model, “one size was expected to fit all”---which, frankly, it never really did!  The consumer got the whole package of services whether or not they needed it; and PAID for the entire package, often via a percentage commission.    With real estate consulting, the services are unbundled “a la carte” to customize exactly what the consumer needs, paying only for the services rendered.  And, unlike the traditional model that solely involved listing or selling something, fee-for-services consulting can apply to ANY real estate task/objective the consumer needs assistance with!

The second big difference between real estate consulting and traditional real estate lies in the types of fees typically used:   Contingent vs. Non-contingent fees: 

A contingent fee is one received for a task that is likely to happen, but not guaranteed---like listing your house with a traditional full-service broker. While it’s hopeful that the house will sell at the terms and conditions you specify, a sale (the results) is not guaranteed.  With the traditional contingent fee model of the past, the real estate broker and his/her agents bore the majority of risk and costs up-front in the hope that a house would sell.   

By contrast, a non-contingent fee compensates work for a results-oriented task.  For example, you hire a real estate consultant to prepare a comparative market analysis (CMA) on a house you want to purchase.  He performs the work and you pay his fee.  Even though you may not like the market range of the property as indicated by the CMA, an outcome (the approximate market value) is determined. Understanding the difference between contingent and non-contingent fees can lend creativity to what you pay and how you compensate a professional or service provider.



Q:   Besides helping me buy/sell a home, what other real estate services can a C-CREC® designee provide?

A:  When it comes to available services, the sky’s the limit!

Here’s a brief list of the myriad services/skill sets available from your real estate consultant.

Help you to evaluate:  Improve vs. move, remodeling, refinancing, removing PMI from your mortgage loan, real estate holdings to maximize profits, the assessed value of your property to lower property taxes; and  more than  200+ additional categories of specialty real estate services including property line disputes, negotiating  tenant leases, etc.



Q:   Are there different difficulty levels in fee-for-services consulting; and, if so, would I pay different fees?

A:  Yes, there are different levels of difficulty.  I describe them as level-one and level-two.  A level-one skill is “informational” while level-two is “interpretative”.  In application, a level-one skill might be information-gathering or administrative in nature; whereas a level-two skill could include representation, advocacy, and negotiating on your behalf.  Depending on the business model used by your C-CREC® you might find that different fees apply to different levels of services.   



Q:   Will I be asked to sign a contract when working with a C-CREC®?

A:  Consumer-Certified Real Estate Consultants® are trained to detail the C-CREC® Consumer’s Game Plan® in writing for each consulting engagement.  This includes results sought, steps to take, timelines involved, and professional fees to be charged.  While your signature is highly suggested, the final determination is up to you and the individual C-CREC® you’re working with.



Q:   Will I be required to pay the real estate consultant a retainer fee?

A:  It depends on how the individual C-CREC® structures his/her business.  But it’s important to consider the positive impact paying a retainer can have on your business relationship with the consultant.  It shows your good faith and motivation to move quickly toward your desired results and allows the consultant to prioritize his business efforts to work with you.  Your C-CREC® designee will explain his retainer policy (if applicable) during your initial interview.



Q:   Can the lure of using the cheapest fee available get the real estate consumer into trouble?

A:  Yes.  As Ben Franklin admonished, “Don’t be penny-wise and pound-foolish”!  Instead, focus on the services that will provide the results you’re looking for, i.e. quick results, highest net proceeds, lowest closing costs, etc.   Consider any added value a consultant or company can provide as compared to merely the lowest price.  A bargain-basement fee may entice you to do business with a company only later to find that their focus is volume, not meeting your individual needs.



Q:   What are some of the most widely used types of real estate consultancy fees?


A:  There’s a broad range of compensation models that include hourly fees, flat fees, fees rebated back to the consumer (where allowed by state law), and any combination thereof!  In fact, you could even use a combination of a non-contingent fee with a contingent one----by putting a cap on the hourly fees you’d pay, but reward the real estate consultant with a contingency fee when the results are accomplished.  



Q:   What if I start working with a C-CREC® only to find that I need more help than I originally thought?

A:  That’s the beauty of working with an unbundled real estate consultant----total transparency and flexibility to mix and match services when needed, as needed.  While the C-CREC® will help you determine upfront what services you may need and their corresponding costs, you’re at liberty in the relationship to mutually agree to adjust your objectives, add services, and perhaps even move to a more appropriate business model offered by the consultant. Since the C-CREC® is “Consumer-centered; Results-focused” it’s in everyone’s best interest to provide you with the best possible real estate experience. 

 



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