Presale Renovations Take Off - A couple in Cambridge, Mass., were looking to sell a two-bedroom condo. The property had been rented bent three college students and needed work if the sellers were getting to get top dollar for it, says Carol Kelly, a Compass land agent based in Cambridge.
“[The couple] didn’t want to succeed in into their own pocket to buy the renovations,” Kelly says. “They didn’t want the strain of investing their own money into the property.”
So Kelly recommended Compass Concierge, a service the brokerage unrolled in 2018 to buy presale renovations. Sellers pay back the cash using the proceeds of their sale. Compass put $17,000 worth of improvements into the Cambridge condo, installing new flooring, painting the kitchen cabinets, and power-washing the house. It paid off: The condo, which was listed at $589,000, sold for $640,000, enabling the sellers to repay Compass and eke out bigger gains from their investment.
New Value-added Service
Real estate professionals have long promoted the merits of staging a property before taking photos or scheduling showings. Many have even made staging a part of their value proposition. But until recently, when sellers wanted or needed to form quite decorative enhancements, all most agents could offer were referrals to reliable contractors. Sellers had to read their own pocket to hide the prices . Now, companies are offering a replacement value-added service: how to save lots of sellers the upfront cost, and therefore the headache, of renovating their home before they put it on the market. In essence, these services enable sellers who’ve built equity in their home to repair and flip their own house instead of accepting the lower return that always comes from working with an iBuyer or house flipper.
In addition to Compass, Realogy announced last fall that its Coldwell Banker brand was piloting a presale renovation program called RealVitalize in Columbus, Ohio; Denver; and Orlando and Tampa, Fla. round the same time, Keller Williams announced its own pilot in California, Georgia, and Texas through the Keller Offers Concierge Program.
Then there’s Curbio, an independent presale renovation company that launched in 2017. Its services are available to sellers only through a true realtor . the corporate , based outside of Washington, D.C., in Potomac, Md., was a member of NAR’s Reach Technology Accelerator class in 2019.
Unlike other presale renovation programs, which farm out home improvements to third-party contractors, Curbio performs all renovation projects—from selecting building materials and hiring subcontractors to overseeing installation and ensuring the standard of the work with a one-year warranty.
“We’re a licensed general contractor in every state that we operate in, so we handle everything throughout the whole remodeling process,” says Rikki Rogers, Curbio’s vice chairman of selling . “We want to make a turnkey experience for home sellers, where they don’t need to worry about managing their remodeling projects or paying for them up front.” the corporate doesn’t charge home sellers interest on the cash they borrow. Instead, Curbio gets deals on labor and materials so as to earn a margin of profit on a client’s home renovations.
Redfin Concierge, which started in November 2017, features a different business model. The brokerage charges home sellers a tenth listing commission and offers a presale renovation service for a 2% commission fee that covers design and project management. The fee also covers staging and residential cleaning but, unlike with Curbio and Compass Concierge, home sellers who use Redfin Concierge are liable for funding their own renovations.
“Our designer will do a walk-through and generate an inventory of improvements we recommend. Sellers decide what renovations they need to form , then our concierge oversees the development ,” says Mia Simon, director of land operations at Redfin.
Like Compass Concierge, the Redfin program is aimed toward sellers who are looking to form small facelifts, “not those needing major remodeling projects,” Simon says. “Our goal is to form the house shine by doing little things like painting rooms with neutral colors, patching holes in walls, replacing dated lighting fixtures , or painting bathroom tiles.”