This is an issue that is gaining momentum and is starting to get legs. But, perhaps this is a question of perceived value more than anything. When I hear other agents compare themselves to used car salesman (and apologize to the used car salesman for the comparison), or hear that we may lose clients that we don't have, it makes me think that maybe we question our value from the start. Some time ago, I listened to a Real Estate agent from little St. George up the road who made somewhere between $500,000 and a million Dollars last year talk about how he built his business on the same model that a doctor uses. To illustrate his point, he put on a Doctor's jacket and a stethoscope and spoke to us about how we need to elevate our attitude about our services in order to elevate our results and therefore our income.
We tend to do things the way we do things, because that is the way we have always done things, and that is the way everyone else is doing things. But, is that sound business? So, lets put on different glasses for a moment and try to consider the way a "Professional" might approach the business. If for instance you were an Attorney, would you take every client who walked through your door (as we often do), and take every client on contingency (as we always do), and not bill them when they walk away (as we never do), and put hundreds of miles on your car and gas usage without charge (as we most often do)? If you were an Attorney and you did, you would be called a "Pro Bono" attorney. Substitute "Attorney" with "Doctor". If you did that, you would be a great asset to the community, but you would likely not be able to pay back your student loans that got you your degree. Substitute Doctor with CPA, or Dentist, or any other career you would refer to as a "Profession". They get paid up front (sometimes after a free first time consultation) for any work that they perform on the behalf of their new client. Think about this... Am I the only one who is surprised by all of the people who pay large sums of money up front to Attorneys and loan modification companies to help with their Real Estate problems without a guarantee of results? There are a lot of Attorneys in Las Vegas who are negotiating loan mods and short sales, and collecting retainer fees before they make their first call to the Bank.
Now, in Las Vegas, with property values down 50 to 70% from the peak, our income per unit has been cut by 50 to 70% as well. And with short sale negotiators routinely giving us commissionectomies for an additional (approximately) 20%, we have to work even harder to make what we used to prior to the collapse of the Real Estate market.
Perhaps it is time we started charging an up front "Retainer fee". I know top producers who do because they understand and communicate their worth to the client, who willingly pays, or walks away. But how many of those who walk away, end up not buying any way. You cannot lose what you did not have. On the other hand, if you are convinced of the worth of your effort, perhaps your client might be also. I have been in the Real Estate business for 32 years, and now many of my clients come to me by way of referral, or word of mouth. I have not been gutsy enough to seek a retainer fee, because i feel that if you don't see the value of my work, and we don't get along, I want to be able to fire you as a client.
But maybe, I need to raise my own opinion of my value and consider a entering into a contract with a retainer fee. If I did so, I bet my client would be more apt to listen to my advise. And maybe if we operated from an abundance mentality, instead of a scarcity mentality, we would approach our profession and clients a bit differently. I for one have a fairly full plate, so maybe it is tie for me to be a bit more choosy who I work with, and charge what my services are worth...from the moment we meet and I decide to take you on as a client.
So, perhaps it is time we put on a Doctor's smock, performed an initial exam on our clients financial, emotional capability, and readiness, and collect a fee from those we decide to take on as clients. And maybe if you are afraid of a potential buyer walking away, you need to market more so you can move from scarcity to abundance in your mind, as well as Bank account.
I'm not sayin', I'm just sayin', ya know...