By Heino Molls – I wonder if it is time for real estate agents to consider charging a fee for listing and sales presentations. Do you think that’s crazy?
It may seem like a radical concept, but give it some thought. Twenty-five years ago a real estate agent was primarily thought of as a sales representative. The industry has gone far beyond that today. Now, we all know, real estate agents are more accurately described as facilitators rather than salespeople. Real estate agents are professionals.
Twenty-five years ago commission rates were generally set. Today commissions are negotiated. Fine. Good. Twenty-five years ago listing presentations were made free of charge. That has not changed. Why is that?
The expertise, marketing concepts, planning strategies, financial commitments and investments that a Realtor brings to a presentation are vastly greater today than they have ever been before.
Just consider licensing fees and education courses. The cost of these things alone to a Realtor is far and away more than it was 25 years ago. Things have changed. I wonder if it’s time to consider paying a fee for the expertise that a Realtor provides at a listing presentation today. Before a commission agreement is signed.
A lawyer may speak to a potential client for the first half hour without charge. Then a strategy for legal action is planned and presented. The client is unquestionably charged for the time spent on that presentation before legal action even begins.
It is common practice for a company to select an advertising agency by creating a short list of agencies, then paying each agency on that short list a fee to create and present a marketing plan. The agency with the winning plan gets the job, but the others are paid for the time they put in for creativity that was not selected. It is a fair process.
A project specialist is often brought in to shepherd a particular business initiative through for a fee. The primary purpose of the specialist is to outline a course of action before the action begins. If the project is successful, these specialists are paid a bonus, much like a commission that is negotiated before the deal happens.
It is common practice to pay a consultant for financial planning or an expert to create a marketing strategy before any action is taken. An additional fee, much like a commission, is negotiated if the rewards of the plan are particularly lucrative.
So why not have a similar arrangement for residential real estate professionals?
If a house is the most important purchase or sale that anyone ever makes, why wouldn’t you pay a professional Realtor to create a presentation on how to market the property or plan the purchase of one before you decide to begin the process of buying or selling?
A house is not a simple product like a piece of furniture or a computer or a car. It is more important than an advertising campaign, or a financial plan or even a legal action.
After the presentation is made the client can make an informed decision on selling or purchasing a property. At that point an agreement can be signed with a negotiated commission for a successful transaction.
I think that if anyone is thinking of buying or selling a house today, they should pay a professional Realtor a fee to provide the expertise they need to make a decision on how to proceed.
I think they would be crazy not to.
Heino Molls is publisher of REM. Email [email protected].
By: Heino Molls
[email protected]
