Boston Globe: New on the menu Source: By Allison E. Beatty, Globe Correspondent (The Boston Globe) Service fees gain popularity, but many realtors still favor commissions Here comes a movement to drastically change the way real estate agents are paid. Called '`fee for services,'' this price structure is akin to an a la carte menu that allows consumers to select and pay for only the services they want. You might pay a flat fee for listing a house for sale, but an hourly fee for contract negotiation, for example. The fee-for-service concept has evolved over the past few years with the expansion of the Internet and online brokerage activities. With many Web sites offering property listings and discounted services, consumers began to expect more flexibility. Some see this ''consultant'' image as the wave of the future for real estate agents, but it is being met with resistance from traditional brokers. "'When I started in real estate and became a buyer's agent there was a lot of resistance to it [too],'' noted Mollie Wasserman, an agent with Keller Williams Realty in Medway who uses fee-for-service pricing. ''Realtors didn't understand it. Now, everybody is calling themselves a buyers' agent. I think fee for services is where buyer's agency was when I started.'' Wasserman recently completed a certification course sanctioned by the National Association of Realtors and is fine-tuning a three-level price structure. She is among a handful of agents in Greater Boston who offer fee-pricing or are considering it. ''It's a real new concept that's gradually making its way out east,'' said Judy Moore, regional vice president for Boston for the Massachusetts Association of Realtors. "The fee-for-services model is not for everyone, but certainly there is the consumer who only wants a certain level of service.'' Moore offers traditional commission-based service - most agents charge 4 to 6 percent of a sale - but she is following the fees trend. ''I find that everyone I deal with wants full service,'' said Moore, an agent with Re/Max Premier Properties in Lexington. ''If they wanted something less I would have to look at it and see how it would fit into my business model.'' Wasserman has been offering flat fees for groups of services for three years, while trying to find the right mix and deftly dodging ''arrows in the back'' from other real estate agents. ''It's kind of like union workers going on strike,'' she said. ''They think you're working for substandard wages and keeping them from getting fair wages.'' Proponents of fees say the traditional commission system needs to be overhauled because many agents are giving away services and are not being properly compensated for their time. The new price structure defines what an agent's time is worth and what a consumer will receive for the fee, proponents say. A constant criticism of the commission structure is that consumers do not understand what they are getting. Housing prices have been so high in New England that many homeowners faced the prospect of paying more in sales commission than the equity they had in their homes, Wasserman said. ''Most of the for-sale-by-owners I talked to didn't want to pay a realtor. They hated it,'' she said. ''But a lot of them couldn't afford to hire a realtor with the typical commission structure.'' Opponents counter that such a pricing structure is motivated by agents' greed. ''If we all want to be lawyers and get paid by the hour that's one thing, but I don't think those agents are serving buyers and sellers,'' said Deborah Cohen, an agent with Carlson GMAC Real Estate in Brookline. ''If the whole industry is to change that's one thing, but to mix it and to say I deserve to be paid no matter what is not right.'' A new price structure also will confuse an already overwhelmed consumer, Cohen said. ''I think everyone has to be on a level playing field. It's bad enough that we have to explain buyer agency, but to add another layer on top of that ... '' With commissions, a seller pays only if the house sells. While this appears to be a good deal for consumers, some agents argue that the cost of the agent's time is just spread around to others. With fees, agents get paid for the hours they work. Unlike discount brokerage, the consumer pays the going rate, but can save money by choosing to take fewer services. Some agents offer it as a substitute for commission pricing, but others offer both methods, or a combination. A consumer who starts off by selling a house on his own, but wants a fee-for-service agent to negotiate with the buyer and handle the last steps in the transaction, might pay about $2,000 for 10 to 15 hours of work. In comparison, a 5 percent commission on a $300,000 house is $15,000. One significant change for consumers, however, is that they typically will owe a fee whether or not the house sells. And there's no guarantee the fee will belower than a typical commission. ''What I would be concerned about from the seller's perspective would be moving brokers into additional fees and ending up paying more money than you expected,''said Kathleen O'Donnell, a lawyer with Kopelman and Paige in Boston and president of the Massachusetts Conveyancers Association. ''Certainly in the legal profession you have clients coming in and saying they just want the purchase-and-sale agreement, and all of a sudden you find something wrong with the septic tank, so you end up doing more, and they have to pay for that,'' she said. ''You never know what issues are going to come up at the last minute that you may not have expected.'' The main proponent of fee pricing is Julie-Garton Good, an author and real estate agent in Winter Park, Fla., who started the certification program. ''One of the things that has always been missing is the fact that most agents don't have any clue as to how much their time is worth,'' she said. While pricing can vary with each brokerage office or agent, the average hourly fee is $150, she said. One example of a service agents should charge for is the comparative market analysis they prepare to define a property's value, Garton-Good said. Typically, an agent spends three to four hours creating one, then leaves it with a prospective client after being interviewed. Some consumers take that information and try to sell the house on their own. With this new pricing structure, agents would charge about $300. Moore predicts the real estate industry will continue to look for creative ways to opeate. Another recent entry into the area is Help-U-Sell, a national franchise that offers fee-for-service pricing. The company opened an office in Concord last year, and one in Newton this year. Their approach is to do everything a traditional agent does, except show homes and handle open houses. By having the sellers take on those tasks, the agent can focus on pricing and marketing the home, and handling calls from prospective buyers. "'Our agents are infinitely more efficient because we don't have to drive people to two-hour listings,'' said Michael Marino, regional developer of the Help-U-Sell franchise in Eastern Massachusetts. The fee is $2,995 for a seller whose house is listed below $300,000 and $5,250 and $9,450 for higher price brackets. The fee applies only if the house sells. ''Obviously, the concept has a real attraction to sellers in a seller's market like the one we're coming off of,'' Marino said. ''When they see their neighbor's house going on the market with a traditional commission broker and coming off in a week, it's hard for them to see the value in paying the commission.