Ok, so I'm sure you read Craig's awesome post Homesellers - I'm not Popeye, so don't be Wimpy . If you didn't, you should. Here's the thing, in my response to it I said, "Here is one more thing that most agents don't talk about but have knowledge of being an ex-office real estate office manager. MOST real estate agencies have AR accounts (um... that being Accounts Receivable, not Active Rain.... hopefully they'll all have Active Rain accounts eventually). When agents 'foot the bill' for newspaper ads, virtual tours, etc they very often have their companies footing that bill until closing for them. Those expenses then come out of their end of the commission check. If their companies (Prudential, Keller Williams, Century 21, etc) were willing to put us on their AR lists the way they do the newspapers and virtual tour guys/gals I would be all for it! Maybe that is what AGENTS need to work for... your companies to help by allowing stagers to be added to the AR bills!"
So, I walked away from my computer and thought, huh..... I need to think about this a little more.... I wrote my broker - I do hold a real estate license, but don't buy or sell... I just like having access to MLS. Here is what I said to him...
"I came up with an idea - inspired by another stager in another area of the country - that I thought may be mutually beneficial. What do you think about the idea of allowing agents to offer my staging services to their clients on AR account? The fee could be flat 1% of sale payable at closing. On average staging is approximately ½ of 1%. I would get paid when the home was staged (by insert brokerage name) but at closing you would receive 1%. This would double your initial investment (money paid for staging). In addition, it would probably increase the number of homes actually staged, increasing the likelihood of a quick sale, referrals and possibly increase perspective listings by offering this service with no money paid in advance by client.
There would be some initial kinks I would think, but it could be a WIN-WIN-WIN situation for the company, the agents, the sellers, yourself and me. Let me know what you think."
I mean the idea is simple, right. His response - about 5 minutes later - was that he thought it was a plan that may work on an individual basis. He is going to present it at the next company wide meeting the end of next month.
So..... what do you think about the proposal? I would love both agents, stagers, & any possible consumer/home sellers out there to chime in.....
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Melissa Marro, a published artist, now turned staging advocate and national speaker speaks her mind about real estate and the home staging industry. In her 'no holds barred' approach, audience members find real answers to the industries pitfalls and learn how to overcome them with tried and true information and guidance. With marketing as her passion, she turned a small home based business into one of the nation's largest home staging and training facilities. She now operates as the CEO of First Impressions Home Staging & Interior ReDesign as well as an instructor for Staging And Resign and regularly speaks at the StagerList Expos and Real Estate Staging Association (RESA)'s trade events.
For more information on having Marro speak at one of your real estate functions, please contact her at 843.822.2622 or email at marro.melissa@gmail.com
If you would like Marro's team to provide information on staging a property in the state of South Carolina, or the Greater Charleston Area, please visit www.WeStageSC.com, email marro.melissa@gmail.com or call 843.822.2622.
Vicki - The agency pays my fees up front. They then collect the 1% at closing. If the home never makes it to closing, then they are in a much stronger position to either take the hit or go after the money.
Julianna - When I calculate my average of 1/2 of 1% for the cost of staging, the majority (over 95%) of my homes are vacant needing furniture. This amount would take care of it for about 4-6 mos typically.
In my opinion, while this hasn't actually been tried yet, the beauty will be that I'll get paid 1/2 of 1% which may give me a little more wiggle room - particularly on the more expensive homes.
I recently sent a letter to the owners of some of the local real estate offices suggesting that they consider hiring me part-time to do staging consultations while I was in college. I figured at 20 hours per week, I could perform at least four walk-throughs (I was thinking of hard to sell occupied houses) and prepare detailed reports on what the homeowners could do to stage their property. I could then assist with the final touches (furniture arrangement and accessorizing). Please be aware that home staging is a fairly new business in Joplin, MO. This would be an inexpensive way for realtors to test the waters. The thought process was the same. I figured with all the money that these companies spend on advertising, paying someone a modest hourly rate of pay for 20 hours of dedicated staging work would be a no-brainer. Of course, I haven't heard back from anyone. I'd be curious to know your thoughts on this approach.
Thanks!
Charissa
Charissa - Brokerages are unlikely to EVER respond to a mailing. If you know them well enough that you can email the broker directly (you actually KNOW the broker) then maybe email will work. If you really want to go on this course then you will have to be driven and probably do some things that will be uncomfortable (for most) at first. You will need to research who the brokers/owners are of the actual company (not just the individual office if it is a chain - for example, our Prudential has 16 offices, but 3 co-owners who all work in the 'resource center' - they are who you would need to contact.) Once you know who the brokers are, you will need to call their office and set up an appointment to meet with them. You will probably be given 10-15 minutes to sell yourself, your services and what you actually want from them. I will say this, not because I don't believe in you, but am a little 'in the know' in this industry - it is unlikely you will sell them on this concept, at least in the beginning. If you do, expect it to be at a very reduced rate of service. This would be OK because if you are only doing consults on their time then you can upsell your services for the rest of your week. If they say no, go to another office and keep 'bothering' them - this is what they teach their agents to do to get a client. I know my old brokerage once taught that certain jobs only hired agents that came back 10 times applying for the job. If they stopped before 10 then they didn't have the initiative to do the job.... something to think about...
Good luck!
Thanks for the feedback, Melissa! I would not feel uncomfortable at all visiting with realtors in person and am prepared to do this when I'm ready to start my business. At this point, though, I just need a part-time job and I'm still employed full-time until August 10 so that doesn't leave me alot of free time. Originally, I thought I'd just take a job with Home Depot or Lowe's, but you can't really line up that type of job several months in advance. I thought this was something I could just try to see what happens. I do have one week off between work and school so I could always do some follow-up work then in addition to applying for typical part-time, college student jobs. Just FYI, here is the text of the letter I sent.
How would you like to set your business apart from the competition by offering a free home staging consultation to your clients for considerably less than the market price? According to the National Association of Realtors, staged homes sell 50% faster than non-staged homes. While most real estate professionals are familiar with the concept of home staging, they may not always have an affordable solution to recommend to their clients. If you understand the value of home staging, but haven't been able to find a reputable provider in the area and don't expect your agents to have to spend their valuable time coaching clients on what they need to do to speed up the sale of their house, I may have a cost effective solution for you.
I am a college-educated business professional that is leaving her 10+ year career in Human Resources to pursue her dream career of Interior Design. I will be attending Pittsburg State University full-time for three semesters starting in August. After completing most of the classes required for a degree in Interior Design, I plan on starting my own business, specializing in home staging and budget decorating. I am trying to get a part-time job lined up before I start school in August and believe that I could make a significant contribution to your company for a modest hourly rate of pay. My Fall semester schedule will allow me to work a regular eight hour shift on Tuesdays and Thursdays and I can also make myself available for about four hours on the weekend. I anticipate that I could complete at least four walkthroughs on Tuesdays, prepare and deliver written reports on Thursdays, and provide clients assistance with the finishing touches after they've completed the suggested improvements on the weekends. Home staging consultants are charging between $100 and $200 for just the home staging evaluation. If you were to hire me to work 20 hours per week at $10 per hour, I could realistically provide four of your clients with "hard to sell" properties an itemized list of things they could do to get top dollar for their home as well as assist them with furniture arrangement and placement of accessories each week!
I have enclosed my resume for your consideration. I would welcome the opportunity to meet with you and discuss your short and long-term objectives and my ability to direct the company toward successfully achieving those goals. Thank you in advance for considering this business opportunity. I truly believe that this sort of arrangement could be mutually beneficial to both of us. I'll look forward to hearing from you soon.
Melissa,
I really like this idea. Will you keep us posted as to the outcome with your broker? I am moving my real estate license to another company at the end of the month and this may be a good option for more staging opportunities. It's all about being creative...I love the way you think!
Melissa, this is an interesting concept. Do I have it right that the idea is to charge the client an agreed price payable at closing, and the Stager gets paid 1/2 of that amount up front from the RE office AR account. So if the house doesn't sell w/in the contracted time the Agent pays the Staging fees, but if it does the Agent makes the other half of the agreed amount- more than he would have w/o Staging?
Please keep us posted!
Melissa... THIS is totally something to take out there and discuss. I'll let you know what we find out.
Thanks for taking my blog and STAGING IT FORWARD...
THIS POST is an amazing example of how this group is changing the Home Staging Industry.
Me
Gina - kind of yes... technically its the agency (Prudential, Keller Williams, Century 21, etc) paying for the services. I would be willing to make the same deal with the agent as well, however.
Craig & Loretta - If we could all work on this I think we could really grow the industry
Sandra - GREAT! Good to know its already working in one area.
Interesting idea. Who takes the hit if the home doesn't sell for whatever reason? Most brokers have cut their expenses as much as they can in this market. I can't imagine they would "carry" the staging expense for very long. My broker will only extend so much money on our behalf and then the bookkeeper comes asking for a check from us.
This has to be the most innovative concept in home staging in a very long time! You've got a great idea and I am excited to see what comes of this in the future.
After reading your response to Craig's blog, I wondered if this could be a possibility, but knowing nothing about the workings of brokerages wouldn't know how to move forward.
I hope everyone who presents this concept to brokerages lets us know how it is received.
I will definitely be setting up meetings to promote this, thanks Melissa!
I have discussed this idea with several office managers and they have really not wanted to have anything to do with it. One of the office managers said that i could not even mention it during an office presentation. This idea was part of the training program that I went through. I have had no luck with it. Maybe I'm selling it wrong.
When you say that the agency would pay up front who pays at the end? The seller or the listing agent?
I was suggesting that the agency pays up front and the seller pays at closing.
Last year I staged a home (for a realtor) using the very same payment concept discussed here.
The realtor (let's call her Jane) hired me to stage one of her occupied listings.
Once I completed the staging, I billed the real estate company that Jane works for directly, under the pre-arranged terms we all agreed on. In this case, the terms were my staging fees would be paid in 10 days, which the companies AR department honored with no problem. So, the staging was done, Jane's sign went up in the yard, and I was paid in 10 days and went smiling all the way to the bank.
This house looked wonderful, and Jane and the seller were both very happy. The neighborhood was flooded with homes, so buyers were taking their time shopping around, checking out every house in the area. Since the home that I staged for Jane stood out from it's competition, it generated a lot of interest. After a few open houses, Jane received an offer at 98% of the home's original asking price! It looked like everyone involved was going to win, but that's not the case. The buyer's offer was contingent on them selling their current home out of state, and they just couldn't get it sold. Eventually the whole offer fell apart. The home remained on the market now vacant, because the family had to move on, even without a sale. The real estate market hit a stand-still, and Jane had to reimburse her employer's accounts receivable for my fee.
Jane continued to carry this listing for a number of months, and finally, after a few prayers and price reductions, she sold the house! Of course, Jane's commission was less than expected, due not only to the sale price reduction, but also due to the out-of-pocket expense incurred for my staging fee.
At first I felt bad for Jane. She busted her buns to get this home sold, but circumstances beyond any of our control, caused the offer-to-buy to fall apart. But this whole story really has a happy ending. Jane does NOT regret working this arrangement out with me. In fact, she's now a full blown Staging Believer! Jane made it very clear to me that my staging got her that fabulous first offer! The fact that the sale fell apart had nothing to do with my staging, and she knows that as plain as day! Together we made a great team... I staged the home, and Jane found an eager buyer. It was the buyer's situation that squashed the deal. Not the stager, and not the realtor.
I still work with Jane today, and we have a great relationship. We advertise together from time to time and we respect each other as professionals. Jane and I know that taking risks is part of business. Just because things didn't turn out once, doesn't mean it won't in the future. This payment arrangement can be great if everyone involved agrees on a few reasonable terms. Lay your expectations out on the table, be willing to compromise a little, and work together towards a common goal. In my opinion, that's the formula to make this whole scenario work.
Leah Fritz, Perfect Place Home Staging
I appreciate all the great comments and am possibly working on the first deal of this sort with my brokerage.
Leah - Thank you for the story! I had a similar situation with a home that didn't sell but the agent knew it wasn't the staging. In the case of something like this happening their would need to be a timeframe set up by the agent/agency that would protect them. For example, if the home doesn't sell within the original listing period (usually 6 months) then the client owes the 1% to the agency.
I also would not recommend this service for ALL homes. In my opinion it would only work for homes that are in good locations and priced correctly. If the homes are over-valued or in a not so good location then there is more than just making a good FIRST IMPRESSION. It would need to be used upon discretion by both the agent and brokerage.
Hi Melissa,
Just wondering if you've been able to try this out yet and how did it go if so?
What is the lowest price of home you would make this arrangement for? If I understand it right, an example would be 1/2 of 1% on a $300K home would bring you $1,500 for the staging--what is the time limit you would put on a $1,500 staging? I'm assuming thats jut for a 30 day contract?
Thanks again for sharing your creative business ideas!
Sandi
www.detailsRedesignAndStaging.com