Fixed Fee Realty?

The concept of a fee-for-service Realty agency has been thrown around a lot but the old commission-based model still seems to be the only game in town. I happened to pick up a copy of this week's Business in Vancouver newspaper and find this article on the last page:

Auto advocate does the legwork for car-buyers (subscription; if you want to read the whole thing, find a copy or pay the subscription fee)

I will quote from the article so as to make my point:

After working in auto sales for years, - something he admits he wasn't very good at -- [Rob] Fournier decided to launch Burnaby-based Cornerstone Concepts in 2007 and took it full time in February 2008

The purpose: to act as an advocate between members of the vehicle-buying public and new, used and private car dealers.

Sounds like a Realtor but for cars. Perhaps he's an... Autotor? Actually he's not. There are places around that will act as brokers shopping for a car but here Rob's business model, or at least how he spins it, is a bit different:

While similar to car brokering services, Cornerstone Concepts does not accept money from dealerships for bringing in potential buyers or making sales on vehicles, according to Fournier. "We are completely unbiased."

Fournier charges $700 for finding new cars for his clients and $850 for used cars, including taxes. His fee covers vehicles priced from about $5,000 to $90,000. The used-car fee also includes CarProof, a vehicle history reprot, a BCAA mechanical inspection as well as a BCAA membership

So he's not really like a Realtor at all. He gets a fixed fee and makes a fixed amount ensuring he can match a car with the client. The way Fournier is selling his business is that he exclusively focuses on his clients' best interests without being induced to work for a buyer-paid commission.

I don't know how Fournier's company's sales are doing but I can see a definite business case for such a service. He purports to be grossing six figures on an annualised basis. His business is operating on his clients trusting his expertise and honesty, something to be honest I see generally lacking in the real estate business.

So for all Realtors out there looking for a tangential journey in the real estate world, such a parallel client-focused fee-for-service business could generate some noise, especially in a few years when some more tentative clients start looking to buy property again. The key, of course, is experience and trust, the latter is hard to gain but very easy to lose.