Refusing part of the scope is what turned it into an $1,800 retainer

Followup to the market summary question I posted a while back. That job happened, badly priced, and it turned into something.

The original $600 became a $2,900 fixed scope once we wrote down what he actually wanted. Two markets, submarket screens, a rent comp set of 60 units I pulled and verified by phone on 22 of them, and a written screen of eleven properties against his criteria. 34 hours, so about $85. Fine for a first real engagement.

Where it nearly went wrong. Six properties in, he asked me to put a value on each one so he could decide what to offer. In my state that's appraisal territory and I'm not licensed for it, and the licensing lines around opinions of value differ state to state, so I told him I couldn't produce that and he should get an appraiser or a broker's opinion depending on what his lender needs. He was annoyed for about two days. Then he sent it to a lender who asked for exactly the appraisal I'd told him to get, and after that he stopped arguing with anything I wrote.

What I gave him instead was the comp set with the sale dates and the sources, which he could hand to whoever did the valuation. In this state sale prices are public. About a dozen states don't publish them at all and that whole section would have needed a different approach.

He's now on $1,800 a month, which buys 12 hours and a standing Thursday call. Third month in. First month I did 19 hours and ate it, so I put a written hours cap in for month two.

What I'd keep: saying no to the valuation. That's the whole reason he trusts the rest.

5 replies

2mitchell_ray4 Get yoursPRO6

$85 an hour on the fixed piece and $150 on the retainer if he uses all 12. So the retainer is the business and the project was the audition. Worth saying plainly for anyone reading who thinks the first job is supposed to pay.

4paulgrant17PassivePRO5

22 of 60 comps verified by phone. Why those 22 and what did you find? I ask because the rents I'm pulling for my first rental look clean on the listing sites and I have no way to know which ones are fiction.

1devon_pierce Get yoursPRO5

The valuation refusal reads clean now because the lender happened to back you up within two days. If that lender hadn't asked for an appraisal, you'd be three weeks into a client who thinks you're withholding the one thing he needs. Did you have a plan for that version, or did it just break your way?

Not arguing you should have done it. Asking what you'd do differently if he'd stayed annoyed.

1tonyv88SO4CPRO6

The standing Thursday call is what I'd watch. Retainers die when the call turns into a chat and neither of you can point at anything it produced. I put a two line written summary out after every one, what we decided and what I'm doing before next week. Takes ten minutes and it's the reason clients renew, because at month six they can scroll back through 24 of those and see what they bought.

Also, 12 hours at $1,800 means one bad month of scope creep wipes the margin. Does the cap reset monthly or roll?

Refusing part of the scope is what turned it into an $1,800 retainer

5 replies