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Old 08-29-2019, 08:53 AM
 
Location: Needham, MA
6,545 posts, read 9,790,906 times
Reputation: 5569

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Some RE brokerages are starting to roll out something they are calling "concierge" service. Personally, I think this is a bit of a misnomer but the short version of what this service entails is basically the RE brokerage makes an interest free loan to their seller clients to fund home improvements. Then the loan is paid off when the house sells.

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.

I know another brokerage in my service area is already offering this service and agents I know who work there tell me their clients like it. I just read yesterday that Keller Williams (where I work) is going to start rolling out the same service soon.

So, I'm just wondering . . . all other things being equal would the offer of such a service be a plus to you, the consumer? Would you hire one agent over another (again all other things being equal) because of this?
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Old 08-29-2019, 08:57 AM
 
Location: Cary, NC
33,915 posts, read 58,945,394 times
Reputation: 32806
Who picks the contractors? Owner or agent?
Does the firm offer concierge services from preferred vendors?
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Old 08-29-2019, 09:01 AM
 
Location: The Berk in Denver, CO USA
14,167 posts, read 20,661,743 times
Reputation: 23153
Not interested.
When we sold our house in 2011 we spent $27K getting it ready. It sold for $634K.
We paid cash.

This "RE brokerage makes an interest free loan" will only be true when interest rates are super low. Would Keller Williams be willing to do this in a repeat of 1983? I think not.
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Old 08-29-2019, 09:11 AM
 
Location: The Triad (NC)
28,902 posts, read 63,021,708 times
Reputation: 32952
Is this supposed to be something new or just doing the loan formally?

This sort of thing has been getting done for decades with smaller/rough properties
in the $2-5000 range to 'clean up a mess' or eliminate a 'question mark' issue.
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Old 08-29-2019, 09:32 AM
 
Location: NC
6,657 posts, read 8,188,034 times
Reputation: 13807
Who assumes the risk? If the house doesn’t sell can the owner change agencies? There are a lot of details to spell out. But in today’s market almost everything sells. Next year though?
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Old 08-29-2019, 09:39 AM
 
Location: Bloomington IN
6,615 posts, read 7,942,219 times
Reputation: 16254
As a consumer I would have a lot of concerns and questions.
  • Does the listing contract differ in anyway from a non-loan contract? Does it absolutely tie me to the broker until my house sells?
  • Will there be extra pressure to sell at a lower price so the loan gets paid off?
  • What if my house doesn't sell? Where I am getting the money to repay the loan if I didn't have it to use when I listed the house?
  • How long is the loan interest free?
  • Will my sales price cover the loan and still leave me walking away with money?
  • Will spending this money really bring me a higher price?

While this might be a solution for some in a fast moving seller's market, it kind of feels like a payday loan situation and a bit loan sharky to me.
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Old 08-29-2019, 09:57 AM
 
Location: Salem, OR
14,088 posts, read 33,202,231 times
Reputation: 13006
I have carried small repairs, flooring costs for a client before on a listing where we needed to do it before we listed. I only do it when I am 100% sure that I can sell that property quickly for the client though. I would not do it in a slow market.

It is easier to find contractors that will bill escrow for things. So I have a flooring company that will do that. We put out some samples for the new buyer to pick and it gets done after we have underwriter approval. That way the seller doesn't have a potential construction lien hanging out there that they can't pay and the contractor isn't place in a position where they won't get paid.
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Old 08-29-2019, 09:59 AM
 
Location: Gainesville, FL
360 posts, read 80,427 times
Reputation: 459
Seems messy. I wouldn’t want to participate in that as a consumer or an agent.
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Old 08-29-2019, 10:01 AM
 
Location: Gainesville, FL
360 posts, read 80,427 times
Reputation: 459
Also, what’s to stop investors (flippers) from taking advantage of this?
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Old 08-29-2019, 01:59 PM
 
Location: NY
6 posts, read 956 times
Reputation: 10
When we sold our house we spent $15k getting it ready. It was sold $599k
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