The real estate business model of "one size fits all" is being challenged in the industry as consumers are demanding and getting what they want - unbundled services. Whether you call the new models fee-for-service, flat fee service, discount brokerage, or alternative brokerage, the full service model of yesteryear will give way to more consumer options in the millennium.
The good news for traditional offices is that the full-service package will not disappear as many home sellers and buyers will still need a full complement of service and due diligence. The time constraints and the lack of knowledge about complicated real estate transactions facing many home sellers and buyers will reinforce the need for full-service brokerage.
Many home sellers with their "do-it-yourself" caps on, on the other hand, are wondering what they can do to cut down on the workload of the agent and thus, save money. Items like showing the house, taking phone calls and holding Open Houses, for example.
The proliferation of dot com real estate services offering discounted and fee-for-service business models are part of this emerging trend (ziprealty, ehomes, eRealty, econobroker, etc.) and it is expected that some of the traditional companies will follow suit.
Predictions of an increase in 'for sale by owner' sales have proactive agents and firms considering how to tailor their full service programs to meet the new consumer demand for assistance with select services from the full package. Coldwell Banker has announced plans to experiment with fee-for-service in select markets in the first quarter of 2001.
According to an Internet survey conducted by Mike Russer, a/k/a "Mr. Internet", 85 percent of those responding to his recent poll reported that they are interested enough to take a course on the subject.
Julie Garton-Good, author of "The Frugal HomeOwner's Guide to Buying, Selling, and Improving Your Home", has done research about the hours real estate agents work to perform the various services they offer to home buyers and sellers. Her findings show that it takes about ten hours to negotiate a sale between a qualified buyer and a 'For Sale By Owner' seller.
Real estate consulting is expected to flourish in the millennium as real estate agents start to charge for the many tasks they now perform for sellers and buyers 'on contingency' of a sale. Julie believes that the bottom line is that consumers will get what they want as the real estate industry catches up to the financial industries' move to unbundled their services.
As the result of her research on emerging trends for unbundled services, Garton-Good has created a real estate consultant program, "Consumer-Certified Real Estate ConsultantTM" (C-CRECTM) through the National Association of Real Estate Consultants® (NAREC®).
Step Out Of The Box: Fee-For-Service
Opening The Door to Fee-For-Service
Fee-For-Service At Regional RE/MAX
Your Customers Are Changing....Are You?
Pat Rioux
