Fee advocate teaches agents new ways Source: TimesDispatch.com ©2001- Lindsay Kaster Ready to sell your home? Ready to provide your real estate agent with a hefty commission? You may not have to. After brokering real estate for more than 20 years, Julie Garton-Good said she's found a new way to do business Garton-Good, who founded the National Association of Real Estate Consultants in 1999, advocates fee-for-service arrangements instead of traditional commissions. She spent five years "debriefing" real estate consumers and said that fee-for-service is something they've asked for repeatedly. "The consumer does not like some of the things that the real estate industry has typically done," Garton-Good said. She said one consumer told her that if a divorce attorney wanted to charge a percentage of someone's marital assets, it would be considered ludicrous but in real estate transactions, that type of payment is the norm. The industry is changing as more consumers gain information and conduct transactions via computer and the Internet. Consumers are handling many of the traditional services real estate agents offer, such as researching properties, so many see it as unfair to pay for services they have provided to themselves. To better service consumers and to help real estate professionals adapt to a changing industry, Garton-Good developed the Consumer-Certified Real Estate Consultant designation. The designation is not meant to compete with other designations, such as that of Realtor. "The two can coincide nicely," she said. Instead, Garton-Good said she simply hopes to provide real estate professionals with new options to offer their clients. Real estate professionals don't have to be Realtors to be members of NAREC and have the C-CREC designation. About 100 individuals hold the C-CREC designation, and Garton-Good estimates that roughly 95 percent of those have real estate licenses. "Probably the majority of those are Realtors," who are members of the National Association of Realtors and its state and local affiliates, she added. Soon, several more real estate professionals will become C-CREC designees. This week, Garton-Good will be in Charlottesville to teach her C-CREC course at the invitation of the Charlottesville Area Association of REALTORS®. David Phillips, the association's chief executive officer, said the response has been "huge." The class, designated for 75 people, sold out quickly, he said, and the association already plans to offer the course again, probably in March. Garton-Good said becoming a consultant involves more than simply restructuring one's system of fees. The two-day course will teach practitioners to think about real estate in a new light, she said. "We basically take the attendee's head and open it and shake out all the things they know about real estate," she said. A consultant, Garton-Good said, offers a disinterested, consumer-oriented approach to real estate that doesn't hinge on things like securing a listing. "This is a more even-handed approach," she said. For instance, a consultant could offer advice to a client who was trying to decide whether to improve his or her home or move and sell it. If the client chooses to improve the home, the practitioner charges a fee for the consultation and the client benefits from an unbiased consultation with someone who isn't simply after a sale. If the client decides to move, the practitioner can offer to handle the sale, either providing traditional, full service with a commission or helping with certain aspects of the sale and charging fees accordingly. Peter Scherman, an agent at Montague, Miller and Co. Realtors in Charlottesville, is one of those enrolled in Garton-Good's course. "The real estate industry is changing, and as it changes, real estate practitioners need to be able to change the way they offer services," he said, explaining that agents need to be prepared to work with people who aren't interested in a full-service arrangement. A member and past president of the Charlottesville Area Association of Realtors, Scherman said he hopes to learn how to best offer unbundled services to his clients. And he said he plans to integrate fee-for-service options into his business right away. "I've been wanting to begin doing this for a long time," he said. The association's current president and an agent at Real Estate III in Charlottesville, Robin Amato, is also enrolled in the upcoming C-CREC course, though she doesn't share Scherman's eagerness to incorporate fee-for-service consulting into her business. "I think it's possible that we may see our industry change," said Amato, who signed up for the class so that she could keep up-to-date. She is unsure whether fee-for-service will benefit consumers, however, and she's waiting to see what course the real estate industry takes before she makes any changes. "I don't know whether the consumer is ready to go that route," Amato said. Both Amato and Scherman say they haven't received any consumer requests for fee-for-service consultations, but Scherman said he thinks that is only because consumers don't know that it's an option. He said he's sure many people would be interested in unbundled services, especially in his specialty: selling bed and breakfasts and country inns. Scherman said a trend is developing among innkeepers to sell their property themselves. These individuals might not want full-service arrangements, Scherman said. "But they might be very interested to buy some of my services." Garton-Good said this is exactly the type of consumer C-CREC designees should target. "One of the first approaches of the fee-for-service should be for-sale-by-owner," she said. She anticipates an increase in the number of homeowners who decide to sell their own homes. "Consumers are feeling pretty good about doing as much to sell their property as they can," she said. Fee-for-service consultations help homeowners with details they aren't comfortable handling on their own. They also mean that for-sale-by-owner doesn't have to be simultaneous with a loss of business for the real estate practitioner. James H. Boykin, Alfred L. Blake Chair and professor of real estate at Virginia Commonwealth University, said he isn't aware of any increase in for-sale-by-owner endeavors. "I'm not sure that there's a great upsurge in this area," he said. Boykin, who was not familiar with Garton-Good or her C-CREC designations, said he isn't averse to the idea of consultants who charge fees based on service, but he isn't ready to offer a sweeping endorsement of the new designation either. "The idea of fee vs. commission probably has merit," he said. "I'm just not sure that two days really prepares people to provide this service for consumers." Boykin said he welcomes change if it benefits consumers. "Always people are looking for ways to cut transaction costs, and I think the key is being able to sell the property in a prompt and professional manner without a lot of headaches," he said. If Garton-Good's system can do that effectively, then Boykin said it is probably worthwhile. Garton-Good said she hopes the C-CREC designation will catch on, but she's not trying to replace traditional service. The same practitioner who offers some fee-for-service options can still provide commission-based, full-service help to those who prefer it, Garton-Good said. Scherman said he doesn't think commissions will ever disappear entirely. "There are always going to be the people who don't want to deal with the details," he said. Those people want one person to handle everything from start to finish, Scherman said, "and they're willing to pay for it." Contact Lindsay Kastner at (804) 649-6495 or lkastner@timesdispatch.com