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Strategic Partnerships in Real Estate: The benefits of collaborating with renovation experts

November 19 2023

showing exterior couple pointingEvery seller wants the maximum price for their home. Until recently, it was pretty easy to sell every listing as the demand for homes exceeded the supply. And while inventory remains low and prices high, the market is changing, and not every seller is maximizing their home price. Why?

In today's market, one of the largest proportions of homebuyers — Millennials, who comprise a full 43 percent of the homebuying population — are seeking homes that are ready for them to move in today. Research shows that 70 percent of Millennial home buyers will choose a smaller home that's move-in ready over a larger one needing attention.

Real estate agents and their sellers may be tempted to rush a listing to market because inventory remains low. But for many seller clients, there's a proven alternative that could produce a much more lucrative sale: going the pre-sale renovation route.

How to maximize the list price

renovation couple outsideDoing a pre-sale renovation today can be faster and smoother, plus it doesn't require cash out-of-pocket from the seller. The key is for agents to collaborate with a pre-sale renovation firm because they are the home improvement experts.

By partnering with a pre-sale renovation firm, you can unlock for your sellers the same resources and expertise that successful home flippers use to maximize their return on every investment.

Here are six core benefits of a pre-sale renovation path:

1. It's a win-win for agents and homeowners

Partnering with pre-sale renovation firms provides proven and measurable benefits for agents and their seller clients. Agents can offer a unique selling proposition in their listing presentations, demonstrating their commitment to maximizing the client's property value. Simultaneously, homeowners can increase their potential returns without the immediate financial burden of providing upfront funding.

Example: When listing a home that needs some TLC, an agent working with a pre-sale renovation firm can provide specific, real-world examples of how similar renovations yielded a higher sales price for the seller. When a home sells at a higher price, the seller wins by increasing their proceeds, and a commissioned real estate agent wins by earning more, too.

2. Seamless partnership with renovation experts

tools level hardhatBy incorporating a pre-sale renovation firm into your real estate listing strategy, you streamline the home improvement process for your homeowners. They won't have to juggle contractors, designers, and timelines; your partner firm manages everything, providing a near-effortless experience.

Example: Your potential seller has an outdated kitchen and old-fashioned wired shelves in their walk-in closet. Instead of the seller managing multiple contractors, you help them engage with a pre-sale renovation firm. The entire process is coordinated seamlessly, from design to execution, and they keep you and your client in the loop every step of the way.

3. Tailored renovations for maximum ROI

Having local market knowledge and specialized design teams ensures the renovation aligns with current trends and buyer preferences. Homeowners don't have this expertise. Using this tailored approach ensures that homeowners receive the best bang for their buck.

Example: A neighborhood is close to great schools, so it is popular among young families. A pre-sale renovation firm might prioritize creating an open-concept living space, given its higher demand among that demographic.

4. Faster sales for market-ready homes

sold sign couple diagonalHomes that have undergone pre-sale renovations sell faster than those listed as-is. With modern designs and finishes, these homes are appealing to more buyers, resulting in quicker offers.

Example: Two homes in the same vicinity are listed for sale. The renovated home is more likely to receive multiple offers than the as-is property, which may linger on the market, depending on its condition.

5. The turnkey advantage

Pre-sale renovation firms offer turnkey solutions. From conception to design, securing contractors to completion, everything is handled. Agents and sellers don't have to break a sweat and can focus on other aspects of the sale. Even the financial part is covered, as there's no out-of-pocket expense because all renovation costs are paid at closing.

Example: When a homeowner decides to sell and goes the do-it-yourself route to make improvements, they enter an often riskier, more complicated, and lengthier process. They must know the best improvement to yield the best return, find and hire contractors, pay for the materials and labor up front, and oversee the entire process. All of this is a turnkey option that is taken care of by experts who do this every day.

6. Commissions boost for agents

commission checkFor agents who earn a commission, a higher sale price directly translates to higher earnings. While sellers benefit from a higher home price by using a pre-sale renovation firm, agents also benefit financially from the resulting property value uplift.

Example: An agent is earning a 3% commission on an as-is property worth $500,000, that's $15,000. But if renovations increase the home's value to $580,000, that commission jumps to $17,400.

Maximizing your client's happiness

Strategic partnerships in real estate can be powerful, especially when trying to find ways to go above and beyond in providing the best experience for your clients. Working with home renovation experts can transform your listings into their best versions. For your clients, you not only meet but exceed their expectations. A happy client is a customer-for-life client who can bring you more referrals.

Jessica Morrow, a seasoned real estate veteran, is Head of Operations for Revive. Revive's mission is to guide home sellers through pre-sale renovations without upfront costs. Working with Revive, home sellers gain an average of $186,000 in additional profit when selling their homes.

Thank you to Revive for sponsoring this article on RE Technology!

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