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Sherley Alti…,  in New Jersey

I would like to hear the advice of other realtors about my question. Starting in January I want to add

Asked by Sherley Altidor, New Jersey Sun Nov 11, 2007

something new to my Listings business. I was going to start off to offer the sellers $500.00 towards repairs if they need it or what every it may be repairs or staging. I will keep receipts for all the things that I pay for. I will spoke to my broke and rec to make sure I am not violating anything to lose my license.

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Hi Sherley. I hope one of the New Jersey real estate professionals will answer your question as they would know if your idea is ok in New Jersey. I know some states don't allow rebates, but it doesn't sound like you are offering a rebate.
Anyway, why do you think you should pay for repairs or other things out of pocket before escrow closes? Why would you invest in someone else's property just to get their business. You'll be out that money whether the property sells. What if you pay for repairs or staging and then they cancel the listing agreement prematurely. Of course you can make the cancellation contingent upon them paying your out-of-pocket expenses, but I can guarantee you that they won't be happy if you actually follow through with it.

My suggestion to you would be that you offer to pay for certain things at the close of escrow (I have offered to pay for the pre-inspection termite report at COE or the appraisal), but I won't pay for those items if escrow does not close. By offering to pay you also make it look like you are desperate to get their listing.

My advise is, if you feel you have to make a contribution, do it when escrow closes and you have a commission to pay it from. You'll have plenty of opportunity to spend your money during the listing period because you'll have to spend at least some money on marketing the property. You need to lead by revenue (i.e., don't spend money that you have not yet earned). I would highly recommend that you read the Millionaire Real Estate Agent (co-authored by Gary Keller, co-founder of Keller Williams Realty).
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3 votes Thank Flag Link Sun Nov 11, 2007
Ute Ferdig -…, Real Estate Pro in ,
I think it is a great idea, because some sellers just don't have the money to do what they need to do to sell the property. But, I've also found that sellers that don't have their own money involved aren't as eager to be as dedicated to the marketing decisions, such as staging.

We do similar things with our sellers and here is the concern and solution that we came up with:

We as listing brokers are out money on the front end of taking any listing before we offer the seller incentives of this nature. If for any reason (difficult seller included) we don't sell the listing how do we recoup this additional loss? To overcome this hurdle we offer reimbursement of these incentives if the deal closes.

In regards to violations, law, ethics etc..., you'll need to talk to your attorney to ensure you don't open yourself up to liability.
1 vote Thank Flag Link Sun Nov 11, 2007
I agree with Gone Fishing. If you do a great job and have a wonderful reputation, you don't have to offer anything; when you do the right job, you are worth every penny.

With that said, two things I do offer if they don't already have it - sellers home warranty coverage while the property is listed with me (you only pay at close of escrow), and the initial staging consultation if i feel they will get the points accross better than I. Those are just part of my standard services so we can help sell the house.

0 votes Thank Flag Link Mon Nov 12, 2007
Sylvia Barry,…, Real Estate Pro in Marin, CA
To Cindi, I write off repairs that come out of my commission. I've paid for broken skylight handles, a beam under a deck the buyer insisted on having, and other things. Along the lines of what you are doing, I had renovated my kitchen and sold a seller a refrigerator to replace one missing from a kitchen and plan on giving him back the money when it closes. If it didn't close I would have kept it. (It was $300 and they insisted on paying me for it.)
0 votes Thank Flag Link Mon Nov 12, 2007
Actually... who really cares?

Offer them $5,000.

You don't have to give anything in this market. If you get the job done you earne your commission with no discounts.
0 votes Thank Flag Link Sun Nov 11, 2007
I wonder if that $500 is a tac write off? Check with your tax pro.
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0 votes Thank Flag Link Sun Nov 11, 2007
The Hagley G…, Real Estate Pro in Pleasanton, CA
Check with your broker and/or attorney to determine what you can do within you State.

If you upfront costs and the proeprty does not sell you could be out of pocket money with no reimbursement. If allowable in you state you might be able to offer a reimbursement at close of escrow so you are not out of pocket.
0 votes Thank Flag Link Sun Nov 11, 2007
Pam Winterba…, Real Estate Pro in ,
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