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Old 08-29-2019, 02:13 PM
 
Location: Rochester, WA
6,156 posts, read 3,416,564 times
Reputation: 16702

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Quote:
Originally Posted by MikePRU View Post
I like the idea that it gives people who don't have a ton of disposable cash the ability to maximize their sale price. I can't tell you how many times I've had clients say they don't want to paint a room or two that I've recommended simply because they don't want to layout the money. So this kind of removes that objection.
It's not even that they don't want it, they may not ~have~ it.

I have often done this... and I know many other Real Estate Agents who have repaired roofs, fixed downspouts, pumped septic tanks, serviced heat pumps, purchased refrigerators.

I had to do it as a gift. I never got paid back. It would be cool to have a brokerage who would bankroll bigger projects! It's definitely a needed value-added service, I just think it may end up losing a lot of money!
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Old 08-29-2019, 02:16 PM
 
Location: Rochester, WA
6,156 posts, read 3,416,564 times
Reputation: 16702
Quote:
Originally Posted by AndreaTownsley View Post
Also, what’s to stop investors (flippers) from taking advantage of this?

Why shouldn't they? I'm not sure why they wouldn't be wanted. Other than I bet there is a price limit and the budget isn't near high enough with these loans to completely renovate a home...
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Old 08-29-2019, 02:18 PM
 
Location: Rochester, WA
6,156 posts, read 3,416,564 times
Reputation: 16702
Quote:
Originally Posted by luv4horses View Post
Who assumes the risk? If the house doesnít sell can the owner change agencies?

Yeah I would assume there is a payback clause if the owner does not stay with the firm.
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Old 08-29-2019, 02:36 PM
 
463 posts, read 176,901 times
Reputation: 1585
First of all I am impressed that the OP suggested painting and/or other renovations to a seller. I've sold 7 times and even when I ask for suggestions about improvements have never had any agent agree or suggest any. Maybe my properties were already in good condition?

We're prepping for 2 sales now and doing limited renovation plus painting as needed. My spouse is telling me we don't need to paint the smaller property. In his words "we bought it that way" 2 years ago so it's fine as it is. My opinion is that inexpensive improvements more than pay for themselves (of course I can't prove that).

The dichotomy of a seller getting a loan from the realtor is that it's people hurting financially that need this kind of loan, they are not great credit risks. But having the property as collateral makes the risk go away.

I agree with others who think there are some warning signs for the seller about this. Once someone loans you money the relationship has fundamentally changed.
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Old 08-29-2019, 05:50 PM
 
Location: los angeles county
1,232 posts, read 1,284,091 times
Reputation: 1270
do they still pay you for the home improvements if the home doesn't sell?
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Old 08-30-2019, 02:23 AM
 
Location: El paso,tx
2,321 posts, read 878,053 times
Reputation: 3730
I've done it to a small degree (paint, fixing a leaky faucet), and been reimbursed at closing.
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Old 08-30-2019, 04:36 AM
 
Location: Gainesville, FL
360 posts, read 80,427 times
Reputation: 459
Quote:
Originally Posted by Diana Holbrook View Post
Why shouldn't they? I'm not sure why they wouldn't be wanted. Other than I bet there is a price limit and the budget isn't near high enough with these loans to completely renovate a home...
If flippers catch on that the brokerage will bankroll some of their repairs, I personally do not think thatís good for the investing community. It absolutely will be pushed to its limits. I foresee it making them more liberal with their spending as a whole since they donít have to fund as many repairs themselves.
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Old 08-30-2019, 04:38 AM
 
Location: Gainesville, FL
360 posts, read 80,427 times
Reputation: 459
Quote:
Originally Posted by oh come on! View Post
do they still pay you for the home improvements if the home doesn't sell?
This is another issue. Some flippers operate on tight margins already. What if it doesnít sell at the price they need to pay off their loans? Who has first priority on the loans? Will the brokerage place a lien?
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Old 08-30-2019, 11:18 AM
 
5,976 posts, read 6,824,509 times
Reputation: 15453
While I personally wouldn't be interested, I can see where it might be attractive to some sellers.


If the info we heard during this year's gubment shutdown is true that most people cannot fund a $400 "emergency", such a loan arrangement might be useful to people who need to paint or replace a furnace or what have you in order to get their property on the market...and be attractive to potential buyers.


Sure. Why not?
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Old 08-30-2019, 12:38 PM
 
Location: Southern Most New Jersey
1,189 posts, read 856,917 times
Reputation: 1955
I see value.

I would want to be able to use preferred/proven contractors (chosen by lender would make things easier). Defined time frames. Solid pricing.

Listing agent can also supply cost benefit at time of sale.

One stop shopping..
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