Ana.  I know folks who lost their savings trying "day trading".  I also know folks who made some VERY bad real estate decisions.

I suspect that whether it's do it yourself real estate or stock trading, using an experienced broker is better than being a pretend one yourself.  We only hear about the bad experiences with brokers.  We only hear about the good experiences from the do-it-yourself real estate sales.

Missy.  Thanks.  I just linked them, Part I and Part II.  I was finished after the first post but the comments inspired me to go deeper.  Comments have a way of doing that.

Ana.  I've followed the discount stock market industry too.  However, that market is not nearly as regularted as real estate brokerage.  I use a discount broker and my last trade was $2,500.  I wasn't risking too much. 

Mike.  Thanks for the thoughtful comment. 

When I speak of a la carte real estate services, I'm speaking primarily of the home buyer or seller who manages their own transaction.  Companies like Assist-To-Sell are, in my opinion, simply using the word "discount" as an advertising term.  They advertise discount real estate fees but it doesn't include the co-op.  I believe that their advertising is misleading and for that reason, they will remain on the fringe. 

However, that doesn't mean that they do not employ some very good, dedicated agents.  They do.  As does "Help-You-Sell" and a few others that I've had the pleasure working with.  They have an a la carte service menu, but the consumer can buy what they need.

When the consumer goes to the Internet and starts managing their own transaction without the advice of an experienced agent, that consumer is in dangerious financial territory.

Read the UPDATE that I just posted.  I received mail from a consumer a few minutes that was right on target.

Roberta.  YOU HIT THE NAIL ON THE HEAD.  We are regulated from beginning to end. 

Does the government propose that the public follow the same risk reduction and consumer disclosure that we do???   That is a riot.  Thanks.

This is halarious.  No one would ever fly.

Sharon.  Thanks for commenting.  I've looked at the consulting or fee for service model.  I don't believe that the public will pay in advance. 

I believe that the full service / limited services is important because with the limited service, the consumer is still practicing do-it-yourself real estate which I don't believe that many are competent to do.

TLW.  See you later.

Thanks for dropping by Cindy. 

I'm very happy with the full service contingency fee model.  I only want to give full service and I want full pay for my services. 

I don't work with buyers who just want some services.  Nor would I work with sellers who want to do "some of the work" themselves because I believe it increases my risk. 

Donna.

I don't respond to such inquiries.  I'm a buyers agent.  What can I say to a person who believes that my services have no value. 

I posted it on this article because it so clearly demonstrated my premise that the consumer NEEDS us.  This lady doesn't know what to do, she just knows that she wants to do it herself.  When I get mail like that, I just junk it.  She's seen my web site.  She knows what I do.  There really isn't anything to say to her and the last thing I'd do is get in a conversation trying to sell my services.  I'm not interested in working with someone who insults me and what I do.

I work with folks who want my help and know that it's invaluable to their peace of mind and financial health. 

Sally.  If I had a buyer for is property, I'd show it, sell it and clean his clock.

Mike.  "20 failed transactions this year"????  Good grief.  Something is dreadfully wrong!  I haven't had 20 failed transactions in the last 20 years.  Where do they fail?  If they are just offers that don't get accepted, that's not a failed transaction.  However, if the offers are getting to contract and then not getting to the settlement table, something really is wrong.  A good analysis of your processes and procedures would be a good idea.  That's too much spinning wheels. 

I was very disturbed with one of my agents when she had about 4 failed transactions in 5 years.  Her problem was that she was "rushing" to contract and not doing a good analysis of the buyer's qualifications.  Or, she was writing on homes that the buyers selected because of price and didn't consider that the homes were in such bad condition that they would fall apart in the home inspection process, which happened 3-4 times. 

Once she slowed down and did more thinking and less writing, things went much better.  She now has her own broker license and her own company. 

Karen.  It's wonderful that some brokers offer training.  However, the agent on the other side may not be very well trained and that's where experience is valuable.  Training is great for awareness, but experience in transactions trumps any amount of training. 

I had an agent who declined to take several buyer referrals because of training scheduled.  IMO, she would have learned a lot more through three transactions than a few hours of CE.  Training is essential, but experience is invaluable.  She could have collected a few $$$$ at the same time.

Mike.  I agree completely.  I deleted her mail without thinking about it.  There's nothing I can do for folks like that.  Let her go to the listing agent and ask for one.  I'm sure the listing agent will write the contract for her. 

Lenn, it all boils down to risk when it comes to full service or partial. As a California Assoc. Broker, I will ONLY handle full service. Since we are an extremely litigious State I am only willing to put my license and E & O on the line for full service.

Gena.  Not for me either.  We have a new category of AGENCY in Virginia.  It's called Limited Service Agency.  It requires disclosure and a list of the services that you agree to provide and your fee for the agreed services. 

However, I know buyers.  They want services for free and, while it might work for sellers, I don't believe it will fly for buyers, unless they are persuaded by the rebate offered if they "do the work themselves".  We'll see how it works out.  Virginia did what it did to keep the DOJ in Washington.  It's quite innovative on paper.  But, as an agent and broker, I know that no matter what limitations we put on services to buyers and sellers, they will want the agent to be responsible and responsive for every facet of the transaction. 

Gary.  You bring up a great point.  It IS lawyers at the DOJ who want to degrade the value of agents.

In MD and VA, agents and brokers control the transaction all the way to settlement.  Title companies are popular in MD and Title attorneys in VA, but agents control to the day of settlement.  VA lawyers have tried, over the years, to get the state to mandate more attorney provided services, but the legislature has refused to give them any more power over real estate transactions.  Lawyers charge a LOT more for settlement services in VA than title companies do in MD, about twice as much. 

Josette.  You are so right when you say that the consumer does not understand.  They do not.  Risk is also the reason I provide ONLY full service.  I trust myself to perform within the law and the COE.  I can't trust a consumer to perform to the same standards in a limited agency basis.  The risk is just too great for me.  Reducing real estate fees isn't always the best benefit to the consumer.  Considering the value of the transaction at hand, I don't believe our fees are high at all.

Gabriel.  It seems to me that minimum service requirements can mean more than just trying to eliminate competition of the limited service brokers.  Minimum standards can also mean the requirement that we provide those services to the consumer required to protect their interests and provide a legal and orderly transfer of real property. 

The DOJ has been egged on quite a bit by the "Consumer" groups.  The Consumer groups believe that the public is harmed by high real estate fees.  They see no harm, however, with limited service brokers who leave a trail of failed transactions, inadequate property condition disclosure, fraudulent financing agreements and more.  Go figure.

Joan.  That is a PERFECT example of why I would NEVER have a Limited Service Agency Agreement with a buyer.  There is not ONE component of buying a home in which the buyer does not need representation.  Not a single one.  If the buyer's agent doesn't go to the inspection, who writes the Repair Addendum or Release of Contingency???  Good grief!!!  That must have been a nightmare.  Not for me.  I am a genuine, confessed, proud CONTROL FREAK. 

Thanks Brandan.  Thanks Karen.  It is featured.  Hurray?  I love gold stars.

Jennifer.  You bring up a good point.  When I sold my home in Bethesda in 2005, I hired an experienced broker to list and manage the listing, showing, open house, contract, inspection, settlement FOR ME.  Of course I could do it.  But, I was happy to pay my broker $42,000 to assume the risk for me.  I'm no fool.  I know how complicated a real estate transaction can be and it involved a lot more than the broker fee.

Lanre.  Your comment brought a chuckle.  I'm often contacted by first time home buyers who say they are not ready to select an agent yet but ask where they should start "their research".  I always recommend that they start with "real estate school".  That doesn't get much of a laugh, but I don't really care.

Christy.  I thought they did.

Ruthmarie.  There are folks in every single profession, trade, industry that don't give 100% to their customers or clients. 

That said, on the whole, I believe that, given the minimum requirements for licensure, real estate practitioners, especially REALTORS, work very hard to provide a very high level of service for our customers and clients. 

Ours is basically sales and until we are compared with the industrial sales positions that require engineering degrees to sell for TI or a degree in chemistry to sell for Pfizer, I believe we do well to keep high standards in our own industry.  I agree that there are some bad apples.  But, there will always be.  Higher standards for licensure is where I want to start. 

Katerina.  You are so right.  When an agent takes a listing and a customer buys without an agent, the listing agent who manages the transaction then has the risk for the listing and seller, then then also have the risk for the buyer.  Fact is, buyers present more risk than do sellers. 

If a buyer thinks that they are going to benefit by the buyer's agency part of the fee, I tell them I'll be glad to pay them that fee if they can show a license.  Emininating one agent doesn't eliminate any risk, any work or save any time.  Where do they get these wierd ideas.  If anything, they are the MOST risky buyers we see.

Kris.  That is exactly what I did when I sold a home in 1995, hired the best broker I knew and paid her her full fee.  She did give me a 1/2% credit at settlement as a "professional courtesy", but I never asked for it.  What I got was wonderful service and a worry free, risk free transaction.  Just what my clients get when they hire me and yours do when they hire you, I'm sure.

Allison.  Good point.  That's what I'm doing, one day at a time.

Maggie.  See ya later.

Kris.  Thanks.  I hired a broker to sell my home.  That was $700K.  I cut my own hair.  No risk there. Snip,snip.

Bryant.  It's simple.  Do we want to offer a la carte or full service.  Or, I should say, do we want to be forced to offer a la carte by the consumer and the DOJ? 

Bruce.  I agree completely.  I've never been threatened by "do it yourself" folks.  They always have been, are now and will forever be "fringe". c'est la vie.  The consumer is entitled to the level of service they are willing to pay for. 

I'm not interested in providing limited service because I see it as increasing my risk.  I'm the most risk averse person in Realtordom.

Eric.  You are right.  How many leaning decks, leaking toilets, dripping disposers, leaking roof repairs, spattered paint, Harry Homeowner basements, etc. have you seen???  Oh, I forgot the do-it-yourself fellow that thinks he can make auto repairs today because he could in the 70s.

We live in a very complicated, technical world.  Give me someone who knows what they're doing.

I do, however, support a home owner's right to sell his real property himself, as long as he can take the risk.

Rich.  That sounds like a plan.  I like that.  Of course, I still want control of the transaction so I can control the risk.

Brian.

That, "You don't know what you don't know" was my favorite Rumsfeld quote.

You are absolutely right.  But, here's the thing.  If the is a true "do it yourself" person, the risk is primarily to themselves and eventually they go to an agent to get the job done, luck out and handle it themselves or cause havoc for themselves and others in a transaction.

If, however, a licensee is working with a consumer who is doing "some of the work" themselves, they put us at risk too. 

I don't care if the buyer or seller want to handle their own real estate transaction.  I just don't want to be a part of that transaction.  That's what limited service does, puts the agent at risk.

Mike.  One thing I always tell agents when something doesn't happen the way planned.  O.K., but I 'm sure you learned something through the transaction.  We learn, even on the ones that don't finish.

Bob and Carolin.  My pleasure.

Bryant.  I have to laugh when you talk about the "45 step marketing plan".  They only work when everything falls in place and everyone does what is incorporated into "the plan". 

I've found that when you talk with folks, get them to talk about themselves, their needs and expectations, you can design a plan that will accomplish their goals.  For sellers on our contingent sales, I let them talk about their house, the neighborhood, the shopping, etc., they're ready to help you sell their home.  Letting folks talk about themselves helps them to trust you because you listen.  Of course, if they're going to overprice their home, they can contact someone else.  I'll still get paid on their buy, if it settles.  None of the brokers I work with will handle an overpriced listing no matter what.  If they start taking overpriced listings, I'll take my business elsewhere. 

That's hard for new agents to learn because they always want to impress folks with their brilliance. 

I agree that the standards need to be improved.  We can't demand good fees if we aren't offering good services.  I will not negotiate my fees.  I offer benefits to buyers or sellers to work with us, but I won't negotiate with them. 

If we start letting the consumer tell us how to run our business, it wouldn't be any fun. 

Charlene.  I know some folks who lost significant money in the stock boom.  One gentleman withdrew his retirement from his government job and lost every penny.  Then there was a gentleman that made a cool $800,000 trading.  Paid cash for a home I sold him.

Most folks can't make wise investment decisions.  However, many stock brokers don't give good investment advice to the average Joe either.  I spent some time with the SEC.  How many ways can you say "churn"?

There is something to be said for mutual funds. 

John.  You're right, of course.

and

John.  You're wrong, of course.

My posts in this matter are inspired by the many buyers and sellers who want information from me, for free, and they then want to "do it themselves".  They would like for use to be "information centric" because they're doing a limited service transaction and don't have the skills to get the job done, like the lady that e-mailed me yesterday. 

Or, they believe that what we do is simple and with a little information (centric), they could do it themselves and save a broker fee.  They don't understand that I charge for what I know and not what I do. 

The FTC and DOJ could probably have succeded in stopping the abuses you correctly describe by going after the brokers who actually committed the acts and not the entire NAR membership. 

I have nothing against limited service brokerages.  I've sent dozens of folks to Gil Clark to sell their home.  The problem with most limited service consumers is that they don't know the questions to ask or the services to buy. 

Buyers and sellers can use the limited services of any broker.  But they can't expect me to guide them through a transaction when they don't want to sign anything or work with just one agent.

No, no, no, John.  Not I.

I only provide FULL SERVICE brokerage services.  If someone wants my advice, I have to come with it.  For me, it's a matter of risk reduction.  My greatest fear of limited service brokerage, fee for service brokerages is that it leaves too much in the hands of the consumer.

I begin with the premise that the consumer is not competent to provide real estate brokerage services for themselves.  Therefore, they are risky.  Prividing anything less than full services could very easily give a consumer just enough information to make them dangerous to themselves and others.  If something goes very wrong and litigatin ensues, I will not have my name associated with that consumer in any way. 

TOTOH, if I have an agreement with them and I'm managing the transaction, I can anticipate problem areas and if something goes wrong, I have E&O insurance.

The limited service is just too risky for me.

Consumers who wish to buy information will have to go to someone else.

Consumers who want full service brokerage services can call me.

James.  Thanks for stopping by.

Thanks Leigh.  Risk reduction determines a lot of what I do and don't do in daily practice and planning.

Fran.  I agree.  The foundation to management of real estate sales in real estate sales licensure.  Without that, continuing education, experience in contract management, the consumer is not well represented by do-it-yourself real estate buying or selling. 

This belief is not a self protection attitude.  It's a recognition that real estate sales management is a complicated, highly regulated, and complicated process.  I do not beliee that the average consumer has the knowledge or skill to manage their own transaction.  Of course, they are free to do so.

Neal.  When is continuing education NOT a good idea?? 

Forrest.  Good insight.  NAR have insight????  Shucks.  They have one mantra, "It's a great time to buy a home".  Then cannot get beyond that hackneyed phrase.

Keith.  Agreed.  We need much high entry standards. 

The NAR did nothing to promote higher entry standards thinking that simply more REALTORS following the COE was quality enough.

It wasn't and it isn't.

We need higher entry standards.