As the real estate industry changes, brokers’ job descriptions have been stretched. Instead of just being real estate scouts, most brokers now function as consultants — helping improve a home by staging or recommending a slew of appropriate resources for renovations. Yet so far, there’s no extra charge for this extra treatment.
“Corcoran does a very full-service job for our clients and responds to all their needs,” says Patricia Cliff, director of the Corcoran Group’s European sales. “We have an internal list of recommended vendors — roofers, appraisers, a myriad of services. It’s like an internal blog because it’s constantly updated by our brokers.”
Cliff says that she’s done more than just recommend services to her clients — she’s put in the effort herself.
“I’ve gone to the point of hiring a detective to find the owners of a brownstone when one client wanted to buy it and the owners weren’t there. My mother was a spy in World War II, so I guess it runs in my blood,” she says.
But why do Cliff, and other brokers like her, not require a fee for all the consultations that they do?
Chris Peters, executive vice president and director of sales of Prudential Douglas Elliman’s Chelsea office, says it’s part of the job to make recommendations, but not to go further.
“We refer contractors and other workers to clients and we don’t charge a fee for that,” he says, noting that he often refers clients to Elliman’s Web site for public information. “But clients have to make their own decisions.
“If a client needs a lawyer, we’ll recommend a few lawyers; the same with architects and electricians. But we don’t get involved with consulting. We have a license for real estate, not for consulting.”
Others see charging for this consultation as prohibited not by lack of licenses or expertise, but by the competition in the industry.
Tom Le, a vice president in the Corcoran Group, says, “I do a lot of consulting but it’s a courtesy. [Brokers] would love to get paid for consulting, but as the industry is now, it’s part of our service.”
As many people start to look at real estate as more than just their homes but often as investment properties, Le has seen a “different dialogue” emerge in terms of what clients need from brokers; often that discussion centers around long-term investments.
“It’s important to be able to help people make informed decisions. I’ve become a resource and a financial adviser in real estate because it’s necessary to be able to service clients appropriately.”
But as the requests veer closer to traditional forms of financial consulting (rather than just helping a client find a good contractor), brokers continue to offer up good advice without charging any additional hourly rate.
Some real estate firms have created their own formal consulting firms or divisions with this more serious financial and investment advice in mind.
Brown Harris Stevens, which was first established as an appraisal company in 1873, has its own residential and commercial appraisal and consulting company through the firm’s parent, Terra Holdings.
Alice Palmisano, executive director of Brown Harris Stevens Appraisal and Consulting, says that while some of their work comes from brokers, the vast majority comes from other sources.
“Brokers are excellent at their own appraising, but when a client wants a neutral consultant, they come to us,” she said.
So does the future for real estate firms include expanding the boundaries of what a broker does to include consulting — financial and otherwise?
As always, it’s hard to forecast what brokers will be doing in a few years.
Cliff recalls, “People once said brokers would become less relevant, like travel agents or stockbrokers. But because of the services we provide, we are entrenched in people’s lives; practically a member of the family.”