What a fee should look like on a $90k deal when the scope does not shrink with price
In counties where the median sale sits under $120k and a good rental buys at $65k, the pricing conversation on outside advice tends to break down in the same place every time. The scope does not shrink with the price. Confirming a septic situation, pulling what few comps exist, reading a title commitment, calling the county about a nonconforming use takes the same hours whether the house is $90k or $900k, sometimes more hours on the cheap one because the data is thinner. A county with twelve sales last year and four of them between relatives forces an analyst back to phone calls fast. But the client cannot pay a metro fee. A $3,000 fee on a $90k purchase with maybe $14,000 of first year cash left after closing costs is a fifth of the annual return, and no rational buyer pays that twice. Meanwhile a consultant pricing on hours is right on the merits and struggling to stay in business. Four ways this tends to get handled: a flat fee regardless of deal size, which prices out the small end of the market entirely; a fee scaled to deal size, which subsidizes small work with big work until small work stops being taken; refusing anything under a threshold, which is at least honest; or treating cheap scopes as lead generation for something else, management, a stake, referral relationships, which changes what the advice is actually for. There is a real argument on each side of that last one, and reasonable operators land in different places depending on how they want their practice to run.
How should consulting fees work on small, low price point deals?
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