Are you working for free?
I know I have – and still do… and I’m not alone.
Realtors often do a great deal of work for which we are never compensated. Not all of our listings sell, and not all of our buyers actually purchase a property.
For most of us, we perform a service – investing our time and money – with no guarantee that we’ll ever see a dime in return.
It is typical of many commissioned sales people.
And yet if you surf the Internet, you’ll see countless examples of people claiming that commissioned sales people don’t earn their money… and how they are only in it for the buck.
Let’s shift gears for a moment.
When I was checking out of the hospital a few weeks ago, my attending physician was writing up my prescriptions and we chatted for a few minutes. He told me that he would give me a referral to a pulmonary specialist.
Before I left the hospital, I bumped into this specialist out in the hallway – and our brief encounter went something like this:
Me – “Hi Doc – they gave me your contact information and told me to call and set up an appointment in the next week or so.”
Specialist – “When you call my office, if they try to schedule you for five or six weeks out, tell them you spoke with me and that I said to schedule you as soon as possible.”
Me – “No problem. I’ll tell them.”
That was pretty much it. If there was more, I don’t remember it.
What on Earth does this have to do with the subject at hand?
Well, you might draw the inference that this specialist was performing a little commissioned sales work. You might conclude that he was trolling the hospital for new patients… and he spent a few moments with me in the interest of future business.
Well that’s the inference I had, anyhow…
So I get this letter from his office today – marked personal and confidential. I’m thinking that it’s just a reminder that I should schedule an appointment, since – at this point in time – I had failed to do so.
No, that would be too much like a commissioned salesperson.
Enclosed in the envelope was a bill.
A bill for our two minute meeting.
A bill for $237.
Now I’m not trying to begrudge the specialist from earning a living. I know that he’s spent over ten years in school and as an intern to get where he is today. I know he needs to stay on top of the latest procedures. His knowledge is valuable.
But I do question the amount – and the wisdom of sending it.
I know that he spent more time instructing his office on how to bill me than he spent with me, so I must question the amount.
Let’s be extremely generous here, and say he spent ten minutes with me. I know he didn’t – but for the sake of argument… let’s just say he did.
That would be a billing rate of $1422 an hour.
Pretty high rate… especially for a consultation I didn’t request.
Maybe he should have acted like a commissioned salesperson
Since I am self-insured, I will be the one paying this bill… not an insurance company. Just like I will be the one paying the $5000 that the hospital found a way to bill me for my stay.
No wonder health care costs are out of control.
If this is what this specialist charges for doing nothing – what do you suppose he will charge me for actually performing a service?
I think I’m going to have to pass on this specialist. I don’t think I can afford him. I wasn’t in the position to doctor-shop when I went into the emergency room… but I have choices, now.
And frankly – I’m not sure I’ll pay this bill. In fact I’m pretty sure I won’t. I fail to see how he deserves this money.
What if Realtors started using a business model like this?
Now there’s a new concept in real estate.
Kris Berg says:
Doug – Working for free? Coincidentally, I just returned from a one-hour appointment in which I spent the entire time suggesting that the homeowner NOT sell due to their particular circumstances. One hour, plus two hours preparing, plus a prior 30-minute phone conversation scheduling the meeting and discussing the market and their “circumstances”, not to mention 12-hours a day every day preparing for the phone conversation and meeting by studying the market and doing all that stupid business management “stuff”. Dumb or ethical? Whatever, I sleep nights. Find a new specialist.
January 4, 2007 — 9:40 pm
NYCJoe says:
But if I were that person, I would be much more likely to return to you when it was time to sell my house than some other agent who tried to convince me that some unrealistic price was achievable. So hopefully, it will turn out to have been time well spent after all.
January 4, 2007 — 9:48 pm
Kris Berg says:
Joe, I have no doubt that you are correct, but that was thankfully not my motivation. Bucking the conventional wisdom, let me tell you that not all agents are insensitive, unscrupulous, dollar-driven “salesmen”. These were two-time clients who are going through a difficult personal situation, and they continue to place their trust in me. I do not take this lightly, and am proud to lose a “deal” in order to help someone achieve their goals. (Stepping down from soap box now).
January 4, 2007 — 9:56 pm
Doug Quance says:
You help make my point, Kris.
Often, we are called upon to help – and we respond. We spend more time working behind the scenes than anyone will ever know.
You did the right thing, Kris. I just wish more people understood why we deserve what we earn – when we finally do get to collect it. 🙂
January 4, 2007 — 10:22 pm
Marty Van Diest says:
Yes…this is just what I say to people when they ask me what I will charge to list their home. I always say I work for free. I don’t charge anything unless I sell it successfully. And even then I have a 100% commission back guarantee if they aren’t happy with my work.
I have seriously flirted with real estate consultation by the hour. I have done it a little. I realize that I have to charge quite a lot just to cover all the extra paperwork of keeping track of every call, every trip etc.
January 5, 2007 — 12:08 am
Jay Thompson says:
We’ve advised more than one that given the situation, now wasn’t the time to buy or sell. We’ve also “lost” listings because we wouldn’t list a property at a ridiculous price. I follow these lost listings and it’s staggering how many wind up selling, usually months later, at or within a couple percentage points of the price we suggested.
As for that bill…. no way I’d pay that. I’d dispute it until I was blue in the face. That’s absurd.
January 5, 2007 — 12:28 am
David Saks says:
Doug, Perhaps it would be prudent to shop for corridor hall rates initially, and then see if a credit might be applied toward the bill if services are provided. The $237 dollars is the good Doc’s way of securing earnest money and further assurance that you’ll benefit from his “exclusive right to remove spleen” listing agreement, which becomes effective when you pay the two minute rate. 🙂
January 5, 2007 — 2:09 am
Doug Quance says:
Marty – I, too, think about the hourly consultant concept. I think it has some merit. Marketability is another issue…
Jay – I lose most of my potential listings that way. If I know they won’t appraise at a certain price… I will walk away. The ones that are listed AT the price they can appraise at aren’t selling… why would I take a listing at a HIGHER price? 😆
David – I knew someone would find the humor in all this.
January 5, 2007 — 10:39 am
NYCJoe says:
Doug, I think part of the problem is that the compensation model for agents is the same regardless of the quality of the agent.
A long time ago (back when I still used buyer agents), when I bought a house in Lake Tahoe, “Michelle”, my agent, was a complete waste of time. Without getting into all the details, she started out well enough but midway through the process it was clear she was a bonehead who only cared about making the deal go through, and I was the one who needed to do most of the work. Contrast this with the selling agent, who was very competent, and did a great job for the seller (and even helped us out a little when he saw what a loser our agent was). They both got their 3%. I think it’s clear that one deserved their check while the other didn’t.
There will always be agents who clearly deserve their commission. The problem is that it’s hard to know a good agent from a bad one before you make that choice.
January 5, 2007 — 10:49 am
Monica Ricci says:
Do not pay that bill. I just don’t see how he can bill you for 120 seconds of time IN THE HALLWAY, especially given that he did NOTHING for you. NO consultation, NO medical advice, NO opinion, no nothing. So what exactly is he billing you for? Would he have billed you for a conversation about the weather or the latest football scores? I swear, some docs just bill you because they want to see if you’ll pay or they can milk the faceless insurance company for some cash.To me, that it totally unethical behavior and if he pushes you, I’d push back and take it to a review board.
It would be one thing if you had called him on the phone and spent time explaining your symptoms, your past history, and asked for his opinion. But generating a bill for a 2-minute conversation in the hallway about getting an appointment?? Give me a break. I’m willing to bet that when you do choose a pulmonary specialist it certainly won’t be him.
January 5, 2007 — 10:58 am
Cathleen Collins says:
The same, unfortunately, is true for doctors. How many of us have been treated for symptoms unsuccessfully by one doctor only to find out, eventually after a second, third or even fourth consultation with different doctors that initial treatments were wastes of time or worse yet, counter-indicated. A misdiagnose when I was a teenager resulted in me spending over a week in Intensive Care. But Doctor #1 got his fee over the six months he was treating me for a problem I didn’t have and not for the problem I did have. And by-the-way, our friendly pharmacist also got paid for those drugs I shouldn’t have taken. But neither I nor my parents who footed the bill believe all doctors are quacks or that we’re better off not using doctors.
People make decisions based upon the information they have. It’s up to us to try to gather as much information as possible to make the best decisions. Just as the internet has helped us make better medical decisions than we could have made in 1972, we hope that people with real estate needs will use information available today to make better decisions. This is one of the reasons it’s so exciting to be a real estate professional during the age of Real Estate 2.0. Sure, the sloppy agents are still out there (and probably the sloppy doctors, too), but I hope that a better educated public will help drive the slobs out of the business, by not giving them business.
BTW, Doug, I hope you’re much better now, and getting the follow-up care you need, if not from the One-Minute-Specialist. Great post!
January 7, 2007 — 5:47 am
Monica Ricci says:
Cathleen, what an excellent response, and so true. The same happens in my industry and indeed, in all industries. There will always be a few bad apples that spoil the reputation of a larger group.
January 7, 2007 — 8:22 am
Paula Bean says:
Great post Doug! And to Marty and the rest who wonder about charging by the hour, you CAN. A new course to teach you how to do this debuted at the NAR convention in November in NOLA. You can take it on-line at your convenience, and you get a year’s worth of coaching and follow up to learn how to implement this into your business. For info go to http://www.ACREcourse.com
The good news is you’ll get more leads, you’ll get paid for more business that you normally wouldn’t have, and you get the chance to educate the consumer on how we work and what their choices are.
The better news is that mosts often, they still choose to hire you on the traditional commission basis and they don’t squabble over fees.
The bad news? It takes a bit to learn this new model to implement it into your business streamlessly, and – once that happens, you may need to hire an assistant or two and a buyers agent to help you out with all the extra business.
January 9, 2007 — 4:12 pm
Bonnie Erickson says:
Now that is hilarious. Reminds me of a phone conversation I had with an attorney. He called and asked for my boss. Boss was not in, so the attorney proceeded to chit chat with me asking about my family, my interests, etc. The following billing cycle included a quarter hour bill for that conversation with me which had nothing to do with the reason he called!
January 9, 2007 — 7:37 pm
John Thieszen says:
As a physician who enjoys reading your blog, I have a lot of thoughts on what you have said about physicians and how they ought to be paid (but I only have time for a short response). I admit that I’ve had similar thoughts on how realtors should be reimbursed. My last realtor got a 3% commission from me for several thousand dollars, and we only spent an hour or two face-to-face. Similarly, I’ve paid car mechanics hundreds to thousands of dollars for only spending 5 minutes with me (and often not more with my car). My point is that (and I’m taking a chance defending a physician and a story that I only know part of, although you’ve seen fit to criticize based on very limited information) the vast majority of a physician’s time is spent outside of the patient’s room, not face to face, and only a portion of that time is in school and residency. The chart review (electronic or paper), discussion with your primary physician, writing orders, etc take up the majority of the time. True, you are paying for their expertise, but you may also have been paying for real time spent that simply wasn’t face-to-face with you. Physicians are frequently judged by their bedside manner, physical touch (a pat on the shoulder), and time with the patient, but these things do not necessarily correlate to the quality of care you are receiving. I couldn’t care less if you pay your bill or not, but I don’t think you really have any idea the amount of work the physician spent on your case. You’re just thinking of the time he spoke with you. I’ll think of your case the next time I have to pay (or maybe not pay?!) a realtor for their service.
January 10, 2007 — 1:44 pm
Doug Quance says:
But John – you won’t be paying the Realtor for casual conversation…
This doctor didn’t review my case – he just met me while I was checking out of the hospital. Had I left a few minutes sooner, he wouldn’t have even known I was there.
Now had he pulled out the stethoscope and listened to me breathe and talked to me about my condition – then I would think he did something worth billing me about… but alas – that was not what happened.
January 10, 2007 — 2:36 pm
Paula Bean says:
I hate to say that I agree with John the MD – I can’t tell you the times I’ve met people who want to pick my brains, and expect to get it all for free.
NOW, having said that…I will also freely admit that it is not the amount of time an agent spends on your transaction that makes it worth what you had to pay to get it, it is the amount of years and the accumulated knowledge, database and experince we have to bring to the table that makes us worth what others pay. So, dear MD, when you buy or sell your next house, bear this in mind 😉
It is not the time you spend that makes a bill worth paying, but the outcome that you expected to receive.
January 10, 2007 — 4:43 pm
John Thieszen says:
Thank-you both for your replies.
Doug – What I’m questioning is primarily your assumptions. How do you know the doctor didn’t review your case? How do you know he wouldn’t have known you were there? What makes him listening with a stethoscope valuable, or speaking with you about your condition what matters most? For all I know, he was consulted by your primary doctor, discussed the case with him/her, reviewed your xray, CT, or labs, and gave your primary doctor feedback and arranged an appointment. In my opinion, that (if that happened), is more valuable than listening to your lungs and speaking with you. I don’t know for sure if any of that happened, I’m just questioning assumptions. You may know more about what he did or didn’t do than what you’ve shared with us. If not, maybe you could ask him why he sees fit to charge you so much, and give him a chance to explain himself. Then again, he might bill you another $275 for the time 🙂
Paula – You are absolutely correct. The knowledge is valuable, and worth paying for (I personally believe buying and selling with a realtor- and paying them their fair due – is the best way to go).
Have you heard about the man who hires the contractor to fix his furnace? The contractor comes buy, briefly looks at the furnace, pulls out a tiny hammer, and taps it on the furnace, fixing the problem. He then bills the client $300. The client is upset and says something like, “how can you charge me $300 for tapping the furnace in one place?” The contractor replies, I only charged you $1 for tapping the furnace, the other $299 was for knowing exactly where to tap.
Also, there is the dentist who offers to extract a woman’s tooth for $300. When she asks how long it will take, he replies, “about 5 minutes.” Startled, she says, “that’s pretty expensive for 5 minutes!” “Well,” he answered, “I guess I can stretch it out to an hour if you prefer.”
I’m just adding my 2 cents to the discussion. Medicine is getting expensive (whether or not it is physician’s salaries that is the problem is another discussion – but I will suggest that salaries are generally not increasing). There are bad doctors out there. I’m just a little frustrated with trying to be a good one, and yet hearing a lot of negative press (which is admittedly sometimes valid and sometimes invalid).
January 10, 2007 — 7:46 pm
Greg Swann says:
> There are bad doctors out there. I’m just a little frustrated with trying to be a good one, and yet hearing a lot of negative press (which is admittedly sometimes valid and sometimes invalid).
Welcome to our world… 😉
January 10, 2007 — 7:48 pm
David Saks says:
Here’s one for you Dr. Thieszen:
A pipe burst in a doctor’s house. He called a plumber. The plumber arrived, unpacked his tools, did mysterious plumber-type things for a while, and handed the doctor a bill for $600.
The doctor exclaimed, “This is ridiculous! I don’t even make that much as a doctor!.”
The plumber quietly answered, “Neither did I when I was a doctor.” 🙂
January 10, 2007 — 8:11 pm
Doug Quance says:
You make some very good points, Doc… I will give you that.
If this specialist was reviewing my case – I will grant you that what he was doing was obviously of more benefit than the small talk in the hallway.
But I am fairly certain that he knew nothing of my case when we met. The attending physician gave me his name – and the name of another specialist – as referrals.
Of course, I could be wrong… it wouldn’t be the first time… 😆
January 10, 2007 — 8:15 pm
David Saks says:
I forgot this one Dr. Thieszen:
“The doctor said he would have me on my feet in two weeks.”
“And did he?”
“I had to sell the car to pay the stinking bill.”
No more….promise
January 10, 2007 — 8:15 pm
David Saks says:
I know I lied but I can’t help it Dr. Thieszen:
Patient to the eye doctor: “Whenever I drink coffee, I have this sharp, excruciating pain.”
“Try to remember to remove the spoon from the cup before drinking.”
January 10, 2007 — 8:26 pm
John Thieszen says:
Doug – It is hard to tell if you were billed unfairly or not. It really might not hurt to call the pulmonologist’s office to ask about the bill’s validity. Also, I work for the government, so I’m not used to the private billing systems, but I believe that even if the charges are reasonable, often times there are discounts when you are paying with cash rather than billing medicare or another entity that may create a lot of hassle. Regardless, I hope that whatever you had going on healthwise you’re doing better.
David – Good ones! I’ve got to remember the one about the plumber. In regards to the last one, I can’t tell you how many times patient’s tell me, “it hurts when I do this,” and I have to bite my tongue not to respond, “so stop doing that!”
I guess we’re getting a little off topic, but this discussion has helped me see that doctors and real estate professionals have more in common than I might have initially thought. I take public criticism of my profession personally, and I can understand how some of the recent criticism of realtors may decrease your job satisfaction, as well.
Let me offer my encouragement to you by stating that I am well aware that a good agent can be worth much, much more than they are paid, and that the work done behind the scenes can make all the difference in the world to the buyer or seller.
January 10, 2007 — 10:30 pm
David Saks says:
Dr. Thieszen:
Thanks for the nice reply. Your a great physician and it’s a privilege to share the blog spot with you, as Doug, who is a great professional in our industry. I might mention, as a matter of recourse, that Doug’s thoughts hit home particularly hard because I live in Tennessee. Our motto is “the Volunteer State”. I live by that motto daily. I assisted the completion and dedication of five homes in north Memphis with Habitat for humanity recently as an example, and paid nothing. I build web sites for agents and tutor real estate license candidates for nothing. I feed the neighborhood stray cats for nothing. Sometimes I give lousy advice for nothing ( not intentional, just not informed). No value can be placed “on” life. The value lies “within” life; in one’s heart. It’s neither the doctors, nor real estate professionals obligation to respond to every request pro-bono in fashion.
Abernethy, the great healer said:
“The hospital is the only proper College in which to rear a true disciple of Aesculapius”.
The world is the only proper college for the real estate professional because mankind must have shelter, a home, a structure that provides privacy and protection from danger, and a place to provide love for a family.
January 11, 2007 — 5:46 am
Mark Robinson says:
Hi Doug –
Did the doctor happen to be wearing a bright orange jump suit with a 5-6 digit number around where the pocket would normally be above his heart?
Unfortunately, I’ve also fallen victim to inflated billing practices, and not just from those in the medical profession. Ever take your car to a dealership to get it worked on without really knowing what was wrong with it before you dropped it off? Now there’s a happy time.
However, I’m in sales myself and I can speak confidently about the topic of under-appreciation. Many times, consumers are given exceptional levels of genuine service, only to treat the salesperson like an annoying homeless person begging for 50 cents. Those sales pros that go above and beyond deserve every penny they get, and then some. Unfortunately, they’ll miss out on some income because of the customers that don’t appreciate the long-term value of awesome service. Instead, they’ll be content to buy from some clerk that was $8 cheaper on a $1,000 product, and drove an extra 58 miles to do it.
Mark.
April 21, 2007 — 9:17 am