Some agents will front repair costs before sale
Sellers who need to bring their kitchens up to date, repair foundation cracks or make other fixes before putting their places on the market might not have to reach into their own pockets to do so. Over the last year, several options have emerged that allow sellers to pay for the work out of the proceeds from the sale.
Better yet, perhaps, these outfits promise to sell your place faster, and for more money, once it goes on the market all nice and pretty. One even vows to do the work cheaper — and better — than if you had hired your own contractor.
A number of real estate franchises now offer to foot the costs of renovations and repairs, agreeing to be paid when the sale closes. Some don’t charge an extra fee for the service, and some don’t even charge interest. Some will even pay for staging: a service to make your house as appealing as possible to as many buyers as possible.
Real estate professionals have always offered advice about boosting a property’s appeal so that would-be buyers can visualize themselves living there. They’re also quick to point out improvements and repairs that need be done in order to sell quickly and at the highest price. But when it comes to actually taking action on their recommendations, about the best most can do is offer the names of prized contractors and professional stagers.
But late this summer, the Coldwell Banker chain expanded its RealVitalize program to its entire network of some 94,000 agents in 3,000 offices. The move came after what the company maintains were “remarkable results” from the program’s pilot, in which participating houses sold as much as 25% faster than their competitors and 4 percentage points closer to list price.
With RealVitalize, listing agents connect their sellers with a dedicated project consultant from HomeAdvisor, which matches homeowners with local service professionals. The consultant manages the work from start to finish, including finding experienced, pre-screened contractors.
The brokerage will cover the upfront costs of the repairs, which will be repaid by the seller when the sale closes or the listing expires. There are no additional fees and no minimum listing price. Available projects include staging, appliance purchasing and installation, simple repairs, painting, and kitchen and bathroom upgrades.
Under the Concierge program from Compass, another realty franchise, the agent works with the seller to decide which projects can most increase the home’s value and sets an estimated budget for the work. Among the more than 100 covered services are pest control, moving and storage, landscaping, fencing, custom closets and deep cleaning.
When a seller is ready to start the work, Compass says your agent will help find a reputable contractor and “be by your side” during the work. Once the job is complete, the house will be listed for sale. You’ll pay for the services either when the house sells or when you terminate your listing with Compass.
But if the place doesn’t sell within 12 months from the Concierge start date, you’ll have to reimburse the company out of your own pocket. Redfin also offers a presale renovation service. But the chain, which charges only a 1.5% listing fee (as opposed to the typical one-half of the entire commission), charges 2.5% to cover the design and project management of the work. Moreover, sellers are responsible for funding their own renovations, but the program includes preferred pricing from a list of trusted vendors.
Real estate franchise Keller Williams has been testing a concierge program in Texas, Georgia and California, with the goal of making it available nationally. Like
Coldwell Banker and Compass, the Keller Williams concierge program will front the cost of improvements and modifications. During the pilot period, the company is compiling data to determine what projects give sellers the best return on their investments. Meanwhile, Curbio, an independent presale renovation company based in Maryland, works through real estate agents — regardless of their affiliation. As a licensed contractor, Curbio handles the entire project: everything from selecting materials and hiring subcontractors to supervising the job and backing the work with a one-year warranty. It currently operates in and around 22 major markets, but projects must cost at least $15,000.
Under Curbio’s system, the company will provide a ballpark estimate during a telephone conversation. Then a technician will arrive to take a 3D video that allows the company to prepare a fixed-price proposal. Once a deal is agreed to, an onsite project manager will handle everything, from pulling permits to completing any punch-list items. Clients receive regular text, photo and video updates.
Curbio claims it completes projects 60% faster than the average general contractor, allowing sellers to sell quicker and at higher prices. The company is paid at closing and never charges interest or fees, but sellers must agree to lower their listing price by 2% every 30 days until the property is sold.
No sale? Just pay the cost of the project, nothing more, and move on.