Continuing the Thread... Contingency, Deferred or Real Estate Developer?

By
Real Estate Agent with Watson Realty Corp

Ok, so I've been reading the blogs... The C-Word- Yep..we're going there...CONTINGENCY!  by Michelle Molinari and RE: 'Contingency' vs. 'Deferred Payment Plan' by Tom Scanlon, which I'm pretty sure were sparked by my blog Why is 1% of the home's list price unrealistic for staging services?.  I would like to continue the concepts and ideas of both in this blog.

In a comment on Tom's blog he writes,

"The home staging service-menu that is presented to the citizenry of  Lafayette is extensive and (no doubt) impressive.  So extensive in fact, that the services you now offer go beyond the scope of what we now call 'Home Staging'.  The final product/service that you are offering your market is not known as 'Home Staging'. What is being described, is a: "Real Estate Developer".  Real Estate Developers have complete control over the project.  There are no complaints about the wrong sofa, and there is no controversy over the removal of wallpaper.Real Estate Developers customarily receive payment on a contingency basis. "

Michelle commented back,

"And as far as developers, go, that is exactly what I am, and what we all are. I am developing the concept of staging to exceed beyond what it is presently. I think there is a huge loophole in the system, and I noticed it right away."

So... here's my thoughts on this. 

Are we in fact Real Estate Developers?  Sometimes I think we are and sometimes I think we are not.  In discussing the contingency issue I think it becomes a MUST.  I don't know how things work in your personal business but typically when we go into a home we give them a play by play of recommended changes and then provide a quote for doing the work.  Sometimes we get to do the work, sometimes the homeowner does the work and sometimes no one does the work - as in it remains undone. 

Under a contingency contract I would assume that the work that is necessary would in fact be done.  Wallpaper would be removed and fresh paint would find itself on the walls.  Things that would remain undone due to budget restraints would actually take place afterall.  This should yield a higher sale price - perhaps enough to cover the staging budget.  It should also make it more likely that the home will in fact sell - again covering the assets of the stager who did the work and took the risk.

What I would think to be important is to address these costs.  If the home was pulled off the market, it would be important for there to be a clause that the seller would in fact owe a certain fee.  This would need to be disclosed in the contract itself. 

I tend to agree with Michelle in that such a premise could revolutionize the staging industry.  I've always been a supporter of get paid in advance.  Over a year ago I wrote, in response to Homesellers - I'm not Popeye, so don't be Wimpy, a Craig Shiller post, with Craig - I'll call your Wimpy & Raise some Olive Oil.  We began the discussion of getting paid at closing here.  I definately feel it is a viable concept.  The trick is getting the contract just right.  You will need to ask for enough to cover homes that don't pan out and perhaps even more importantly, you will need to control how fast your business grows under such a plan.

A great builder here in town once told me something very interesting... Many business don't go under because they fail, they go under because they grow too fast and ultimately can't keep up

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 Author Bio: Melissa Marro, Home Staging Industry leader, Realtor, and entrepreneur offers a unique perspective on New Home Construction, Resale Residential Real Estate, and Home Staging

For more information on buying or selling in the St Augustine, St Johns, Jacksonville, or Ponte Vedra area, visit StageListSellNEFL.com or call Melissa Marro (marro.melissa at gmail.com), Watson Realty, for more information (904-466-2093).

 

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Comments 41 New Comment

Rainer
132,512
Michelle Molinari
Feature This Real, Estate Staging & Curb Appeal Concepts
FEATURE THIS... Real Estate Staging & Interior Decor

LOL.

Jeri Ryan is just plain hot, no matter WHO you are.

I wish someone would say I looked like her!

~Michelle

August 06, 2008 02:34 PM
Rainmaker
70,231
Gary Barnett
Home Matters Property Stylist Group, Indianapolis
Home Matters

Gee, this post got a whole lot shorter than I remember it from the other day..??

August 07, 2008 08:04 AM
Rainer
111,288
Toronto's 2 Hounds Design: Decorating + Staging
2 Hounds Design + Home Staging

OMG I can't believe I made it to the end of all these blogs on getting paid our worth and the 'mechanics' of getting paid. I swear I thought I'd have to continue reading tomorrow...but I just couldn't step away.

LOL, I guess I finished sooner than I thought because some comments were deleted. I was thinking "I'm such a great speed readier"...then Gary burst my inflated bubble by pointing out the missing comments. DRAT.

I've bounced around reading the posts...I'll deferr payment...OMG, no I won't!...Oh, OK...I will! Won't...Will....maybe I'll sleep on it.

Actually I've wanted to do the deferred payments option for some time now and I am *so* glad you started this whole chain of blogs Melissa! I currently do rent the majority of the furniture I use...but I have a plan to avoid being burned until I can acrue enough $$ to purchase all my own inventory.

It was Michelle Molinari's comments...oh so many of them...that has convinced me that I am stupid if I wait a moment longer to get my act together and work this out.

Bookmarked!

August 12, 2008 09:24 PM
Rainer
132,512
Michelle Molinari
Feature This Real, Estate Staging & Curb Appeal Concepts
FEATURE THIS... Real Estate Staging & Interior Decor

Yes, Dane, I can get a little passionate.

I saw my attorney yesterday morning. He is absolutely confident he can cover all the millions if bases I want covered. I will have my new contingency contract in 2-3 weeks.

Thanks to all who helped point out the potholes and shared your ideas, theories, concerns, and validations.

I only have a couple of weeks now to determine our new advertising campaign to announce our new service that will allow  complete real estate stagings for more people who need all their deserved equity!

I cannot thank you all enough!

~Michelle

 

 

 

August 13, 2008 10:56 AM
Rainmaker
418,546
Melissa Marro
St Augustine, St Johns, Ponte Vedra
Watson Realty Corp

Michelle - couldn't agree with you more about Jeri Ryan!  You will definately have to keep us posted on how that new contract and plan works out!

Gary - hmmmm -- wonder why that is?

Dane - excited to have you in the conversation now.  I think there are a lot of great parts of the plan, but it certainly isn't for the faint of heart (or the cash flow poor)! 

 

August 13, 2008 06:14 PM
Rainmaker
418,546

Melissa Marro

St Augustine, St Johns, Ponte Vedra
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Author Bio: Melissa Marro, Home Staging Industry leader, Realtor, and entrepreneur offers a unique perspective on New Home Construction, Resale Residential Real Estate, and Home Staging