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This past March I was contacted by a woman who said she had a referral for me. Would I accept a referral?
Is the Pope Catholic?
This was my introduction to the RE Expert organization, Jeff Guthrie, and the Real Estate Advocate, which is, as I type, is melting down along with the $3500+ fee paid by what sounds like over 1000 brokers and agents looking to grow their business.
Jeff Guthrie, founder and owner of the RE Expert organization, has lots of explaining to do. I was emailed his phone number, and he actually answered. We had a brief conversation, and he told me I would get an email that sheds light on industrial espionage in his organization and what he'll do to make things right.
Here is the email, complete and with all errors in spelling and grammer intact:
Jeff's Urgent Letter
It has been some time since you all have heard from me, and as many of you have noticed, our business is undergoing another period of change. Some of that change has resulted in additional frustration and confusion, and I want to take a few minutes of your time to let you know, to the best of my ability, what is happening and how the company intends to address current challenges. I have spent the better part of the last 20 years involved in the sale and marketing of residential real estate. This experience has brought me into contact with some of the top producers in the real estate market, and allowed me to witness first-hand the keys to their success even in market downturns. Common attributes that all of these individuals possess is a single-minded dedication to their clients that filters through every team member, and relevant expertise to make the dream of home ownership, the American dream, a reality for so many of their customers. Many of those top producers became the seed investors in the business now known as REexpert, dba the Real Estate Advocate. My initial concept for this business was to harness the power of the internet to connect real estate buyers with the very best professionals in their market, realtors that we knew were ready to deliver customer-centric expertise and service at the highest levels of the profession. Our revenue model was tilted toward referral fees, so that we would succeed only when our partners succeeded. A free trial for realtors in several different markets showed great promise, and I was approached by several major players interested in the concept. But I was not satisfied. At that time, I engaged outside IT vendors, including i2 Communications, to develop what I thought would be a template and back office platform to capture the market with niche or specialty web-sites that would quickly and organically rise to the top of the search engines in their respective markets. By employing economies of scale, and conveying a consistent brand message supported by the excellence of our Experts, our cost to deliver those landing pages was expected to be far less than the cost to a realtor going it alone, with far greater returns. Within six months of forming the business, we had signed up more than thirty investor or platinum partners and more than 100 strategic alliance partners or Experts. Against my better judgment, we launched in the summer of 2007. Again, the early results were promising, but depended entirely too much on the use of pay-per-click services to drive traffic, at a cost to the realtors of several thousand dollars per month. The pages we had paid i2 to develop were too thin to perform well organically. With the real estate market dropping into the worst slump most of us have ever seen, we could not in good conscience go forward with what we thought was a less than efficient service. Your marketing dollars are too precious. In the fall of 2007, we began a total revamping of the IT platform in conjunction a new partner, Tony Pugh and his company Smart Zone. Although Tony was a neophyte in real estate matters, we regarded him as a visionary in articulating the possibilities of social networking as applied to our existing concept and customer base. Tony toiled for several months, without a contract in place but still being paid, helping us to define and promote the networking concept. Many of you to signed-up for our revised program, which involved a very competitive set-up fee and no monthly commitments. Unfortunately, like the IT vendor that came before, Tony was more talk than accomplishment, and by early February, after we had paid him more than $100,000, he was demanding additional money for a platform that was already late and still unfinished. When Tony did not get what he wanted, he took what we had developed while working together and has tried, in fits and starts, to use it competitively against us. He is still looking for money he thinks we owe him, and has resorted to smearing us in the market and fostering dissent among our partners. During the period we were working with Tony, I turned my attention to another marketing tool, IVM, which most of you have now had an opportunity to see and which will soon be available to all Experts. In February, I returned to REexpert long enough to install what I thought was a team of professional managers, and to reinstate i2 to pick up where Tony had left off. By June of this year, we determined that i2 was again late and simply did not have the skills needed to complete the full platform, and we began to develop that function internally. The issue is not that we have failed to deliver on our contracts with you. Every realtor that has paid the set-up fee has received exactly what we promised and more. But we have not, until recently, met our own expectations on the usefulness of the web-sites, and we have frustrated many of you who have been counting on the system to generate quality leads, quickly, in a depressed market. For that I am embarrassed and sorry. In reading this, it is probably all too clear that I placed far too much confidence in technology experts who were unable to deliver on time what we paid handsomely to create. I have learned that a few weeks away must mean something different to these developers than it does to you and me. The good news is that we are receiving a growing number of testimonials from Experts who have embraced the system, learned how to work with it, and are generating real activity from qualified buyers. Many of those realtors believe that our company, as imperfect as it has been, has saved their careers in these tough times. When it comes to operations, I have long realized that my management skills are less than perfect. I am most comfortable in the creative arena. The concept of REexpert as a consumer advocate resonated with you, because it resonated with me as the best way to meet a difficult market with a truly valuable service. IVM is another example of my efforts, and its initial positive reception, from you and others in the market, has been gratifying. I have tried to address my shortcomings by surrounding myself with others that could manage the business to both your benefit and mine as the founder and largest stakeholder. No fewer than five individuals have sat in the president's seat at my company and remained there until your complaints, or some crisis, have brought me back into a more active role. When I have returned to the business, I have always found it in worse shape than it was when I departed, with processes still not in place, accounting issues unresolved, and bills not paid. The most recent example was an outside consultant named Charles Johnson, who in less than a month drove off most of my best staff, like Tara Dikos. When I refused to simply give him the business for nothing as he demanded, he failed to process transactions, wrote checks with my signature forged, shut down essential systems such as phone and internet, and departed with a server that held all of our critical information. We are pursuing these issues through appropriate channels, but we suspect that Mr. Johnson may be working in concert with others to continue in the effort to steal the business or move it to a new company. Since he has our server and customer data, I would not be surprised if you heard from him or someone acting on his behalf. Mr. Johnson is not our only critic. You may be familiar with a realtor named Donald Leske or visited a blog that he is running. He may also be soliciting you to join with him in some type of lawsuit against the company. Although we believe that any claims would be unwarranted, we will leave it up to you to decide what your rights and potential remedies might be. In making that decision, however, there are some facts you should know about Mr. Leske. Earlier this year, he was a vocal critic of the business. Rather than exchanging accusations with him, we invited him out to our offices to review our operations and check on the site development and plans. When he went home, with nourging from us, he drafted a ringing endorsement, which he allowed us to share with those of you involved in the business at the time. Several months after he left, just as many of the developments he witnessed were coming on line, he apparently became disillusioned again and contacted us with what we regarded as a blatant piece of blackmail-pay me $10,000 for a domain name, or I will go negative again. We refused. For the sake of completeness, we have posted the string of Don's e-mails and prior endorsement on our website, and you can make up your own mind. Please understand that I am not denying responsibility for the company's performance to date. We have experienced delays and direction changes that would cause anyone counting on the company to wonder whether their involvement would ever pay off. I was the one who chose my managers and developers poorly, and it has created an uneven experience for you and financial distress for the business. And I have come to the painful conclusion that these missteps have caused irretrievable damage to the REexpert brand. They have also deferred for too long the receipt of referral fees, which were the essence of our revenue model. For those Experts actively working the system, they and the company are starting to see returns, but too many others are sitting back and waiting for the technology alone to deliver results that we are convinced will come over time but not soon enough to make sense for either of us. Many of my friends and advisors, in looking at the hurdles we still must cross, have counseled that I simply close the business down and walk away. After all, we have taken no more than a non-refundable set-up fee, have delivered the web-sites and landing pages promised, and have the right to terminate our contracts on thirty days' notice. But this concept has been in my blood for far too long, and we have come too far to end on a sour note. I have decided to take the concept back to its roots, which will require rebranding and converting to a new revenue model for those Experts interested in participating. Effective immediately, and perhaps through early next week, we are taking the system off-line while we assess the damage of recent activities and introduce the new contract terms. All of the Experts choosing to continue will be assigned to a new company that will focus all of its energies on serving you and the consumer, and will charge a monthly fee to ensure that we have the resources to drive the results you deserve. Some of you may decide not to move over to the new business, and we understand that decision. Rather than insisting on our contract terms, however, we are committed to making that exit as palatable as possible. If and when the new company resells your territory, and in no event more than 24 months down the road, it will pay REexpert a fee equal to 100% of your initial set-up fee, and RExpert will in turn provide you with a full refund of the only moneys we received from you, with interest. Until you receive that refund, you will be able to use the IVM magazine with your clients and prospects at no charge. We hope that you will decide to try the new brand and new terms, but if you don't, know that we plan to be in this business a long time and want to part company as friends. This is not an effort to run away from our commitments, but to keep them, and to give those Experts who continue with us both better tools and a better brand. For those of you choosing to walk away, although we can't guarantee it and legally don't owe it, our plan is to get you your money back. When the transaction occurs with the new company, it will be transparent, every penny will be accounted for, and all of the assets that could otherwise be available to provide this voluntary refund will stay within reach. Look for a video e-mail from me by week's end announcing more details on this transition, followed by a call from our customer care staff to explain the options in more detail. As always, I am grateful for the trust you have placed in our company, and promise you that I will work tirelessly to ensure that we not only survive this market and our own growing pains, but emerge in a stronger position.
Tara Dikos The Real Estate Advocate
This email was sent from email@example.com, which is suspicious (at this point, what isn't?), because it is a gmail account and it isn't Jeff Guthrie's email, so he might claim later that he isn't the author (of course, Tara Dikos, who is the byline, has left the firm, as the letter says). However, Mr. Guthrie TOLD ME he was sending an email to explain the situation.
The email itself is a rambling, quasi-self congratulatory deluded excuse fest which begs many questions, such as how he could be selling this as a legitimate thing as recently as 2 weeks ago knowing all this was happening.He also appears to have been busy fiddling as Rome burned.
Donald Leske, the broker who explored the class action suit and is mentioned unflatteringly in the letter, has told me that his lawyer doesn't think we have much recourse. He has also explained quite clearly how he has been misreprented by Mr. Guthrie.
So be it. But anyone who googles Jeff Guthrie will know what he has done in these pages, and they will be well advised to stay away from him. I'd hate for my name to be mud. Maybe Jeff Guthrie doesn't mind. If he had integrity, he'd refund everyone's money whom he mislead. Don't hold your breath.
Every agent who has been scammed by this firm should immediately contact their state attorney general as well as the Colorado Better Busines Bureau.
Phil Faranda is broker and owner of J. Philip Real Estate LLC in Briarcliff Manor, NY. Since founding the firm as a sole practitioner in late 2005, the team has grown to over 30 agents & closed 350+ transactions valued at $140 million. He is in his 4th term as Vice President of the HGMLS. This blog commentary is geared toward consumers and industry colleagues alike. You can reach him at (914) 723-8900. Warning: *Sarcasm and irony advisory at all times.*
There is no doubt in my mind that the house would still be on the market if it wasn't for Phil's proactive efforts.
Phil was very responsive to our requests; he was very professional and respectful; he always gave us his honest opinion on the questions we asked. ... more
Phil is a very honorable and respectful realtor. He has gone way above and beyond the call of duty for me not only once, but twice. He helped sell ... more
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.