You’ve been looking forward to this home staging consultation for a week. When the home sellers first contacted you about decorating their home to sell, you learned it would be very extensive home staging project.
Your new clients want to sell a vacant, 2400 square foot home in a great neighborhood. You’ll need to bring in new furniture, draperies, art and accessories, arrange to have it painted, landscaped – the whole works. You know the project will be worth thousands of dollars, and you’re confident when you’re through with it, it will sell quickly and give you a great case study, or home staging success story as I like to call them, to use in your future marketing efforts.
While you’re sitting down with the sellers at your home staging consultation going through all your recommendations, you’re envisioning how powerful your before and after photos of this property will be, and what a great addition this project will be to your home staging portfolio.
The homeowners are extremely receptive to your ideas and they want to continue working with you. But, they aren’t prepared to pay for your services until their home sells.
What do you do?
Please comment below with your answer and I’ll do a follow up post soon on what I would do as a home stager in this situation.
Debra Gould, The Staging Diva®
President, Six Elements Inc. Home Staging
Debra Gould knows how to make money as a home stager and she developed the Staging Diva Training Program to teach others how to earn a living doing something they love.
[tags] home staging job, home staging consultation, home staging portfolio, debra gould, staging diva[/tags]
Interesting. We haven’t come across this situation yet. We have been asked by realtors if we would consider staging a home and then get paid when the house sells. Our response has been that like any service, we require payment once we have completed staging the home. Especially if rental items are being brought in because the warehouse charges *us* for those furnishings. Normally, we require a 50% deposit of the complete staging quotation prior to starting and the remainder on the day of staging. For any professional trades, we require payment up front as these workers will not wait for their payment until the house sells.
Does that mean we would never consider waiting to be paid until the house sells? Maybe for our staging fee only. And I would also suggest a specific time period – ie. give the seller 60 days to sell the home and at the end of that time the stager is paid regardless of whether the home is sold or not. In the contract it should be stated that regardless of whether the home sells or not, the home stager is to be paid.The rest of the items need to be paid for as soon as the contracts are signed. What if the house never sells? We have no control over so many things in the home selling process. If a stager agrees to hold off payment for everything and the house doesn’t end up selling then all of those costs incurred are the responsibility of the stager – not the home owner.
Bottom line: If you are going to agree to a situation like this, ensure that whatever you agree upon is stated in a contract and that the seller is fully aware of all expectations.
I would treat it like any other design related situation. I would require a 50% deposit to order materials, than expect the other 50% after to work has been completed. If this customer came to me as a referral and I felt like I could trust them then maybe I would re-write my contract with them to something like this- 50% deposit to order materials, 25% after work is completed, and 25% after 60 days of being on the market. All open accounts after 30 days are subject to a 2% finance charge per month. If the customer was not able to work with any of these situations then I would not get myself involved with the project.
These are great responses. I’ve always said “No” to these requests, but I like the 60 day time limit suggested above, as well as the percentages described above. Staging is one piece of what I like to call the 3 legged stool: staging, pricing, and marketing. All 3 have to be done and done right, and we only control one of them. I also like the finance charge concept as well, though that could be a pain to calculate. Also, I use a furniture rental company that requires payment up front, so the homeowners would have to at least lay out money for that.
Walk away. Since you have no control over the sales process and negotiations you could wait a very long time to be paid depending on the market you are in. If you accept this approach how many of these homes could you do before you are faced with a lot of debt very quickly, and what do you do with all the stuff after the home sells? And how many contractors are you potentially paying but not being paid for until who knows when. If you rent the furniture, the liability ends up with you and not the homeowner. Also, what if at the end the owner doesn’t get as much as they wanted for the house then wants to negotiate down what they paid you. I feel there are more risks and work here than are worth a few thousand dollars and your time would be better spent with someone who is going to pay you to do your work when they should.
I would agree with Myra. Just think of all the extra bookwork and chasing of money. Also, if these people tell others about your “new financing program”, you basically are locked in to doing the same for future clients. I would again press the point that their staged home will sell much faster and for more money than they would get as is, collect your consultation fee, wish them luck, and wait for them to call you back in a few weeks to stage their home on your financial terms!
I need more information. Why do they want me to wait to be paid? Are they divorcing? Are they in bankruptcy? Will they allow me to get a credit and background check? Do they have a job now? Where do they live now? Will they go on contract with the rental furniture company of my choice? Who will pay for the landscaping? Who will care for it by watering, moving, clipping, and replacing flowers so that there is something blooming all the time? How long has the house been vacant? Who will check on it after every showing and keep it clean and showing ready? If it is already listed will they change to use my realator of choice? Will they use my professional photographer for their listing photos? Will they pay a real estate attorney to draw up a contract and put a lien on their house so that I can be sure of payment at closing? What happens if the house never sells?
I would have to say no. Even if they were willing to do all of the things I have asked I could still not get paid. If the house goes into foreclosure it wipes out all liens below it.
My time is better spent elsewhere.
I turned down a smaller-scale job. The client asked what I would charge to stage a 1-bedroom, 1000 sq. foot condo. I told him I normally start with a fee-based consultation and recommendations report. After reviewing the report, he could decide to what degree he wanted to use the recommendations and to what degree I would be further involved. He then proceeded to tell me that a stager in St. Louis (2-1/2 hrs. away) staged a 2-bedroom vintage condo for him for $1400 total, payment contingent on the sale of the condo. He invited me to see photos of the place on a website; the photos focused on original architectural details (glass doorknob, a ceiling fixture in the hallway, a shot of the bay window overlooking the street, and a front exterior shot. He insisted I give him a price for a total staging for the 1-bedroom property w/o seeing it, and payment would be contingent on selling price. Thanks, but no thanks.
I would say sorry, but can not work that way!
Imagine Debra’s response if a potential student offered to pay for the whole Staging Diva course only after s/he had received, studied and staged her first paid project.
This very situation did happen to me. Twice..as I had two back to back jobs from the same person. The realtor was going to have me ‘stage; every one of his homes. However, after I staged 2 homes for him, he informed me that he was not paying until ‘after’ the homes sold. When we spoke about payment, he stated he would either pay me after the staging or after the house sold to which I agreed, not IF THE HOUSE SOLD. He thought it would be good advertising for me as I was just starting out as well. HUH! The homes never sold as he was a new agent just starting out; very inexperienced.. I never saw my money and needless to say I wrote off my losses and will NEVER work with him again. Unfortunately has had bad mouthed me to others now stating “I expected to be ‘paid”…go figure! What is even worse, is this was a relative of my friend. Never again! I am clear about my fees now BEFORE I head out to a job. Experience is a good teacher. As I see it; services are rendered; service paid for… Like Kay says, my time is better spent elsewhere than with people like that.
Deborah, Thank you for sharing your story as a warning to others.
BTW, I’ve found that it’s generally the clients who are the most difficult who expect the special “deal”, and if you say no to any request they make, they’ll bad mouth you all over town.
The “high cost of difficult clients” is an excellent subject for a future article I plan to write.
Debra
I’m glad I received this info today. I was thinking of setting up some type of contract so that my potential customers could pay for my services when the house sold. I was thinking of 1% of the price of the home as I’ve seen other websites talk about that type of commission. However, now I can see that there are lots of problems with that type of scenario. I am concerned though that only a few people will actually be able to stage their homes (even though they know they need to do it and really want to do it)because they do not have an extra couple thousand dollars available. So what is the answer? I want to help everyone get the highest price for their largest investment. I know that Staging will get them more money when they sell. So how can I help them if they don’t have the money NOW??
By asking you to wait until a house sells to get paid for home staging or photography of a listing, in effect your client is asking you to lend them money.
Ask yourself:
– Do I want to lend this amount of money to this person?
– Am I in the best financial position to be making this loan, knowing I may never get paid back?
– Do I think this person might have someone else in their life who could lend them this money instead of me?
Put in this light, I really feel the answer is clear 🙂
Keep those comments coming….
Debra