The Role of Agents in Pre-Sale Renovations: Navigating the Challenges and Opportunities

Selling a home today can be stressful for the seller and their real estate agent. Interest rates are fluctuating, buyers' needs are changing, as are homeowners' options when they are ready to sell their homes.

The emergence of pre-sale renovation firms in the last few years has given homeowners ready to sell a better way to sell a home. Instead of agents rushing a property to the market in an "as is" condition, sellers can renovate now to maximize the sale price later.

As an agent, it's vital to present today's pre-sale renovation option to each seller during every listing presentation.

While a pre-sale renovation may not suit every client, more often than not, it ensures homeowners receive top dollar for their property. This also allows agents to take home higher commissions.

Let's explore the role of agents in pre-sale renovation and the key benefits this innovative service provides to sellers and their agents.

Maximizing property value

The number one advantage of pre-sale renovations is increasing a home's final sale price, an average of 28%.* With the average US house selling nearing a half-million today, that additional equity could mean tens of thousands extra in the seller's pocket.

Rather than accepting offers at a property's current-dated value, strategic renovations tailored to local market trends help homes sell for top market value. Research shows average profit gains can exceed $140,000, with an average return on renovation of a stunning 236%.*

The projects also update homes to suit modern buyer preferences. Open-concept kitchens, spa-like bathrooms, and outdoor living spaces often provide the highest ROI. Pre-sale firms manage every aspect of these renovations with in-house or contracted experts. They know the local market and the right improvements to make.

Catering to Millennial buyers

More buyers than ever desire a move-in ready home, with Millennials making up the largest share of current home shoppers. They don't want as-is houses.

Industry research finds that most Millennials would opt for a smaller move-in ready house over one needing work.

Pre-sale renovations deliver the modern, Pinterest-worthy interiors this demographic seeks. Homes updated in this manner often sell faster as they check more boxes for a larger buyer pool. This approach helps agents reach more potential buyers.

Streamlined process for sellers

Navigating a renovation can be complicated, time-consuming, and plain exhausting for sellers or their agents. For years, real estate agents have been offering, often on a limited scale, improvement services to sellers to get a home ready for the market. Pre-sale firms eliminate the hassle by handling everything turnkey from design to permitting to contracting.

Rather than helping sellers sort through endless decorator and contractor options, the seller gets matched with specialized experts tailored to their particular property needs. No researching materials or keeping projects on schedule – a project manager handles it all.

Renovations can start in as little as seven days, and most renovations are complete in 4-6 weeks, while lighter updates may take only a few weeks or less. Deep cleaning and staging can get many homes to market within days. This accelerated timeline gets properties listed faster. This streamlined process is a considerable benefit for agents too.

No up-front cash needed for sellers

One significant barrier that often discourages renovations is the upfront costs. Pre-sale firms have also solved this problem. Homeowners no longer need available funds to update their property, as the pre-sale renovation firm finances all improvements.

The seller requires no up-front cash – even for major overhauls as all the funds are provided by the pre-sale renovation firm, which recoups their costs at closing.

The best part is that any profits beyond the renovation fees and expenses go straight to the seller at closing.

Higher commissions for agents

Increasing a home's market value translates directly to higher earning potential for commissioned listing agents.

If the "as is" price jumps 20-30%, thanks to strategic updates, so too does the agent's total compensation. It's a win-win, allowing sellers and their trusted real estate professionals to maximize profits.

Agents key to success: Update your listing presentation

Pre-sale renovations have greatly simplified and amplified earnings for those looking to sell residential properties. As an agent, it's important to educate yourself on this innovative new sales path and ensure you add it as a central talking point to every listing presentation.

Once aware of the option, the streamlined, cost-free nature sells itself to most sellers. Allowing a property to realize its total market value through smart renovations is the easiest way to win a client for life and ensure future referrals.

If you are already talking to your sellers about pre-sale renovations, great. If not, it's time to rethink your approach, embrace innovation, and seize an opportunity that could boost your GCI and change the way you do business forever.

*Note: Based on Revive data collected 2020-2023; individual results may vary.

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 $140,000 in additional profit when selling their homes.

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