Profile picture for SoCal Engr

A real estate broker who helps the seller renovate?

Just curious to see if other REAs have heard of this brokerage approach, or if other potential sellers are aware of similar business models in their area.

Essentially, the seller and brokerage agree on renovations and price as part of the listing agreement. The brokerage then performs the renovations (presumably, at an "in house" price) and re-coups the costs from the eventual sale. Inherent to this model is that the renovated house sells for a sufficiently higher price to cover the cost of the renovations.
  • November 30 2013 - US
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Answers (5)

There's a place for this - the contractor generally gets paid at closing, and the work is often less than particular.
  • November 30 2013
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Profile picture for SoCal Engr
"Anyone doing renovations on a property would need to be legal owner."

My read is that the seller (i.e., legal owner) actually contracts for the renovations. The "catch" is the brokerage is also a licensed contractor (haven't looked into how this works), and performs the renovations in-house.

I have to believe there is some clause in the event the house does not sell, because the "standard" method of payment for both renovation and listing is based on the proceeds from the sale.

"...and it's especially useful when the seller is out of the area and "just wants it done.""

Maybe, but it also seems like a win-win-win scenario (assuming it works)...
- The seller is able to get work done to maximize the sale price, without any upfront out-of-pocket
- The brokerage could realize a bit larger commission on a higher sale price
- The contractor keeps their crew busy and intact, and maintains a revenue stream
  • November 30 2013
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I don't think it's new, and an extension of "white glove service," and it's especially useful when the seller is out of the area and "just wants it done."
  • November 30 2013
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yes...it's new
  • November 30 2013
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Profile picture for Frieda Triebel
In the New Jersey area, this is not done.  Anyone doing renovations on a property would need to be legal owner.  Laws, rules, & regulations are strict in New Jersey.
  • November 30 2013
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