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Bleeding Is Not Good for Your Business’ Health

In real estate today, large numbers of agents are competing for a shrinking market. With unlimited real estate information available online and multitudes of sites competing with, and seeking to replace the agent, the public increasingly looks at the agent (and brokerage), who only offers the traditional full-service package payable only by commission, as a commodity to be shopped by price. Limiting themselves to the traditional commission model, agents and brokerages are indeed swimming in a bloody red ocean of cutthroat competition.

By contrast, real estate consulting, which provides the consumer responsible choices in the services they can obtain and how they can pay for them, while paying the professional fairly for their time, experience, and expertise, creates an "uncontested market space, ripe for growth that makes the competition irrelevant." To Read The Full Article, Click Here.

Posted by Mollie Wasserman on 07/17/2007 12:31 PM

Comments (8)

blue ocean strategy, consulting

8 Comments on Bleeding Is Not Good for Your Business’ Health

JUL

2007

Mollie, I had heard mention of this Red/Blue model but was not aware of the details. Thanks for providing the snapshot. Very interesting.

Mollie, I think you'll be hard pressed to find people willing to pay agents hourly for their time. As much as consumers want to object to commissions, I think you will find and even bigger objection asking for them to write a check up front. Many consumers in todays market place are also strapped for cash so they don't have the ability to pay for consulting services.

Brian, I wouldn't be hard pressed at all to find people willing to pay - I've been collecting fees for twelve years. And we have a growing group of ACRE's (Accredited Consultants in Real Estate) that are collecting hourly and fees also. Now, there is no doubt, that many folks will still choose commissions, but they choose it because it's the BEST option, not because it's the ONLY one. And once the consumer is given transparent choices, if they choose commission, they understand that they must pay a premium because the risk is on the agent, not them. Therefore, they don't try to beat me up on what I charge.

But what most agents miss about the consulting model is the thousands of dollars that can be made when there is no transaction involved - homeowners need real estate advice and services and gladly pay for it if there's a way to do so. And FSBO's that find their own buyer are much better off and better protected when they hire a real estate consultant to negotiate and troubleshoot their transaction rather than going it alone or with an attorney who can't do this near as well.

Check out what agents and industry leaders are saying about the ACRE program - you might change your mind about what the consumer is willing to do.

Take care,

Mollie

Mollie,

That makes more sense, especially using it as way to remove commission objections. I will check out the link. I agree with laying out all peoples options for them. Being able to charge for it would be more of a win-win.

Like Mollie, I too have had people pay me by the hour, the project, or pkg. I have, like Mollie, done this for about 10 years. Some like it, some don't, some choose commissions, some don't, but the one thing they ALL LOVE is having the choice.

In the market I'm in right now being the #3 State in the U.S for foreclosures, it is a lifesaver for most of my clients. It is something to think about because the consumer always loves choices, and the agent always loves being paid for their time - not contingent upon a sale.

For more information you can sign up for our consulting newsletter by sending an email to info@Acrecourse.com. Also check out http://www.RippingTheRoofOffRealEstate.com and http:www.ACREcourse.com

We have a great group of students who've all told us we should charge more money for our class than we do ;-) and we are giving it great thought! You can see testimonials at http://www.TheConsultingTimes.com. As in our real estate business, the highest accolades one can get is from clients, and you will hear great things from all of our ACRE Grads about our class, our one year follow up program, our tools, follow up and passion.

With real estate being as bad as it is in most of the U.S. this is a great USP. Choices for the consumer - it is what they want, the good news is this, what THEY want is the same thing agents want!

If you do nothing else this year, read Mollie's book, "Ripping the Roof Off Real Estate", available at www.Amazon.com. This is at best a 3 -4 hour read which will absolutely change the way you look at yourself and your business model and bring home in spades that you are a professional and you should be paid and treated as such. We are asked to give away far too much for free in this industry. We are not compensated for each buyer that gets in our car or every seller that lists their home. We are the only industry that fronts a homeowners costs for them with an "interest free" loan in terms of time and energy spent. Then, when their overpriced offering does not sell, they change agents and reduce the price. We have all been there. The consumer is not happy paying a commission percentage. They are demanding change. We, as an industry are going to have to address these issues. Very few of us are driving expensive cars and living in mansions as most homeowners believe. We take on all of the risk and the reward in terms of pleasing sellers is getting smaller and smaller.

JUL

2007

Hi Mollie -

It's nice to see you participating on Active Rain! I've been giving serious consideration to taking your ACRE course, but just dragging my feet a little. It certainly makes a lot of sense to offer alternatives rather than having to compete in a "negative auction-type" environment!

Vicki

JUL

2007

Vicki,

I think you will find that taking the ACRE Course will open your eyes to a wonderful future with flexibility. It will allow you to diversify your business model. The Forum for ACRES graduates is the best knowledge I have added to my RE Brain in years. There is a tremendous group of knowledgeable folks there to work with and share experience and knowledge!

Consulting is a duty you have to many past and present customer / client relationships. I work in a primarily investor type vacation market and many have run to invest in RE, but truly need help in addressing change in the investment market. They need a qualified consultant to help them. Be the leader in your market.

You will be sorry you did not and say... why did I wait so long... once you do. Go For It!! Take the Road Less Traveled.

Bill Holt - On The Outer Banks, NC - Bill@obxmls.com

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