Excellent article! The system is broken and requires that paradigm shift to fix it. Now, how to do it? Blanche Evans' article gives a possible answer...fee-based compensation...

"There is a solution - fee-based compensation. I've developed a Fee-for-service program for sellers which allows them to choose (and pay for) just those professional services they want and need. Because I'm not paid on contingency, I can charge a reasonable price for my services and the seller can pick and choose those services they need at the time." - Blanche Evans

Cafeteria-style real estate.  Very interesting.  

It has been done with some moderate success in the health insurance industry.  A company contributes "X" number of dollars and the employee chooses what they want.  In some cases an employee can also "bank" money in payroll deductions for things like orthodonture.  It's not an exact mirror of what the article is talking about, I agree, but it's still Cafeteria-style in a different industry.

I rather like the idea myself.  I've actually done that math exercise and while I made a little more than minimum wage I could be waitressing during the summer and making a heck-of-a-lot more!  But I'm a better Realtor than I am a waitress so I won't quite my day job.

However, how do you put a price on prospecting, developing Buyer relationships that can sometimes take months, if not years and then explain to a Seller the charge-back and the value of that time.  How do you explain to a Seller the value of the time an Agent spends on the internet improving her website for better SEP?

I think we can explain the tangibles (cont. ed, fees, memberships, advertising, etc) that actually come with a receipt.  I'm just not sure how we explain the value of the intangibles.

Another thought, in a cafeteria-style system, what happens when the Seller's house doesn't sell because of something they opted out of?  Are we now telling the Seller that s/he knows what will sell better than we do?  So just make your choices and I'll get it done?

One other thing and then I'll shut up and go think some more (and hopefully find some answers to these questions).  Many employees are reluctant to choose a cafeteria-style insurance plan because they're afraid they'll make a mistake and have to pay out of pocket for care that would otherwise be covered under a more traditional plan.  I believe there is a correlation here.

I think this raises some very good questions!  Great Post.

OK, I'm done!

Actually it was Mollie Wasserman, not Blanche Evans that wrote these articles...  Mollie could easily be labeled one of the "internet pioneers" in real estate.

And the quote that Gail used was from an article Mollie published SEVEN YEARS ago....  very interesting stuff... Mollie is WAY ahead of the curve on a lot of things.

Working for less than minimum wage? What happened?

I met with a first-time seller today to go over a market analysis and he  asked me three times throughout the conversation if he had to pay for anything up front. Imagine how nice it would be to get paid 'up-front'! I created a 'menu of services' several years ago when Mollie was discussing this type of offering but the broker wouldn't embrace it so it never got implemented or even experimented with.

I've often pondered getting some sort of up front "retainer" fee from a seller, to be reimbursed from my side of the commission at closing. Not much, say maybe $1000 - $1500 (more or less, depending on the property).

I'd earmark it for marketing expenses. It might help sellers be less likely to "jump ship" as well as give them a more vested interest to get the house sold.

I don't know of any other industry that the service provider doesn't get paid until the deal is completed, with the possible exception of injury attorneys, and many of them have some sort of retainer fee.

The problem of course, is Mr/Mrs Seller could just go to another of the 20,000 agents in town who wouldn't request a retainer...