Many home stagers have faced the dreaded question, “Can you wait until closing to get paid for your home staging services?” How you answer that question will have a big impact on how long you remain in your home staging business.
You’ll hear this question mostly from real estate agents.
There you are, a brand new home stager. Anxious to please the real estate agents who you imagine will be sending plenty of clients your way in the future.
They seem to like you and admire your talents. Your ego gets a bit of fluffing.
Then they say, “We wait until closing to get paid, it’s only fair that you do too. Besides, you’ll be making so much money because we’ll be sending you 90% of our listings!”
It’s a bit like the wicked witch luring the hungry Hansel and Gretel into her gingerbread house with promises of lots of goodies to eat. You might remember the witch had another agenda, driven by her own circumstances.
Now I’m not saying all real estate agents are wicked witches waiting to fatten you up and eat you, but I think the metaphor holds in many cases.
After all, real estate agents can show hundreds of homes before getting paid. They sometimes carry real estate listings and promote them for months on end, only to see the home seller pull the listing off the market. Meaning they don’t get paid for all that time and effort.
Let’s face it, that’s a really crappy business model unless you’re a well established real estate agent in a very hot real estate market. That’s why most real estate agents earn less than the college-age kid managing the local McDonalds®!
Why so many people want to become real estate agents is another question, but beyond the scope of this post.
My point is, just because real estate agents have a challenging business model, doesn’t mean home stagers have to fall into the same trap!
5 Reasons Home Staging Not Like Real Estate
Home staging is a completely unregulated and relatively new industry. This means YOU get to make your own rules about when and how you get paid.
Here are 5 reasons you don’t want to wait until closing to get paid the way real estate agents do:
1. The home might be pulled off the real estate market before it sells. What does that do to your home staging business income?
2. When you do a top notch job at home staging, why shouldn’t you be paid for that? You have no control over most of the variables that determine when, and if, a house will sell. Waiting to get paid until closing means you many never collect.
3. Your funds won’t be held from the proceeds of the sale at closing the way a real estate agent’s commissions is. How do you know you’ll actually get paid at all? And what recourse will you really have if you don’t get paid in the end?
4. Because real estate agents never get paid for a lot of the work they do, they earn more in situations where they are able to close a deal. In other words, they are compensated for all the risk they take on. As a home stager, you’re not earning anywhere near that 2% or 3% commission on the selling price of the home, so why should you accept all those inherent risks of nonpayment?
5. If you started your home staging business because you want to earn a great income and you need cash flow, then don’t tie up payment for months or years. Get paid immediately (and get paid well) upon services rendered. At least that’s what I teach all my Staging Diva Home Staging Business Training Program students.
Home Staging Business Needs a “Bird in the Hand”
Remember that old expression “a bird in the hand is worth two in the bush”? This totally applies here. You might not earn a percentage of the selling price of a home, but as a home stager you can earn anywhere from several hundred to several thousand dollars from each home staging client. And you don’t have to wait to get paid until closing! Is it any wonder so many real estate agents are becoming home stagers instead?
I hope you’ll do your home staging business a favor and just say “no” the next time a real estate agent asks you to wait until closing to get paid.
And that promise of getting 90% of their listings? This may or may not happen. But who is to say how much home staging business that actually represents for you, or whether it’s the kind of business you’ll even enjoy. In a future column I’ll share what it might look like to be dependent on a single real estate agent/broker for the bulk of your revenue.
I am not a real estate agent because I never wanted to be on call 24/7 the way agents are. Being a home stager gave me a higher income, the real estate buzz I craved, and means I only have to go to an open house when I wants to.
Please share in the comments whether you’ve ever been asked to wait until closing to be paid for home staging, and how you handled it. I’d also love any questions related to this topic so I can cover them in my next article.
If you know any home stagers struggling with the question of when they get paid, perhaps you can share this article with them via Facebook or Twitter using the sharing links below.
Illustration Credit: Grimm, Jacob and Wilhelm. The Fairy Tales of the Brothers Grimm.Mrs. Edgar Lucas, translator. Arthur Rackham, illustrator. London: Constable & Company Ltd, 1909.
This totally happened to me. It was my first ever consultation and I said “Sure! you can pay me at closing” Even though I knew better. Well, the sellers wound up not selling after all. But I did talk the agent and said going forward, I’d like to get paid upfront and she was okay with it. We have a good relationship, she’s given me a few referrals since then.
Suzanne, I’m sorry that happened to you and glad that you’ve been able to turn it into future business. Thanks so much for sharing your experience, I know it will help others.
Lots of excellent points made here. I just wanted to comment on how surprised I am at the number of stagers that provide furniture for clients. Maybe it varies by region, but that’s just not a headache I ever wanted to partake in! I’ve been staging since 2006, and I’ve never provided furniture, and luckily no one has ever asked me to wait until closing to be paid for my services. Not “yet” at least 🙂
Thanks for sharing your experiences Vanessa and congratulations on your 8th year in your staging business!
Is it alright to ask for a deposit or payment before you stage a home, once you know that the person wants you to do the job?
Jennifer, absolutely you should be getting money upfront if you are putting furnishings into a home. In Course 3 of the Staging Diva Training Program I teach my students how to get paid at their first consultation and how to get deposits for future work.
Nothing beats actual money to demonstrate who is seriously making a commitment to your staging services!
Signed contract and full payment. If the contract is not signed they are not on the calendar and staging items are not held.
Boy does this strike a nerve with me! I only did this once in the beginning, never again! It turned out ok and I did get paid, but realized quickly the down side of waiting til closing! I had the exact same comment from a realtor “we don’t get paid til closing, so you shouldn’t either”. I have it in my contract that I get paid as soon as the staging is complete. We must stand firm!
Susan, thanks so much for sharing your experience. It helps your fellow home stagers more than you probably realize!
Your article certainly makes logical sense to me and will prevent me from having sleepless nights; wondering if and when I’ll eventually get paid?
As well, I won’t have the need to keep regularly contacting the realtor to learn if it he property has closed yet; as it will be irrelevant to my business finances! I’m sure the realtor doesn’t wish to be hasselled by their stager either; if they even bother to answer my call. Who’s to say they’ll be honest and pay you when the house settles? This way there’s no fear of being duped! Great plan Debra!
Thanks Sandy. You are right there are so many worries to keep you up at night when you don’t get paid for your services until some nebulous date in the future!
I have been asked to do this and have provided two different replies because different folks were paying for my services. Scenario 1: Client hired & paid. I advised that I am one contractor they hired pre sale to help prep the home. They understood fully. Scenario 2: Agent wanted to reimburse client. I suggested client pay up front & agent reimburse client @ closing. Once again I advised that I am part of the presage team. Everyone wants to understand the why behind the words. We just need to be prepared.
Laura, you make excellent points, thanks for sharing how you handle this!
I would just like to hammer In the point of how vague, “90%” really is. An agent cannot ever guarantee something like, “8 houses per year” because they can’t guarantee they themselves will get 10 listings per year, let alone 10 listings that actually sell. They could be an agent who is also a buying agent. Of these supposed 10 listings, half of the owners could decide not to stage. Your time is one risk. Purchasing furniture, accessories, gasoline and paying movers are immediate costs for the stager. I protect myself by requiring a 50% non refundable deposit and the remainder is due after initial set up.
Fantastic Lea, I’d say you hit the nail on the head with your comments!! Thanks for sharing.
After finding out that larger companies actually require full payment up front, I now go by this policy. Especially with new clients or when the seller is paying. I spent/wasted plenty of time chasing after my remaining 50%.
Thanks ladies for sharing your stories; I’ve learnt from each and every one if your experiences! I’m putting together each of these in a file for my future reference-reminder!
The way I see it; the realtor gets paid at closing, and Stagers get paid a upfront deposit and the remainder upon the completion of their Staging project. Why should they wait once their work is done; as the Stager moves on! Besides; even if the seller pulls their property off the market; the seller has been living within and will continue to enjoy the Stagers transforming changes of / to their house! So absolutely they should be paid in full upon completion of their Staging project.
Thanks for commenting Sandy! You make an excellent point about the sellers getting the benefit of a transformed property, whether they eventually sell or not.
We have been asked to do this on several occasions by both realtors and home owners. In 90% of those cases, they wanted rental furniture – which we outsource – plus our own decor rentals. We very firmly refused to those proposals and said that like any contractor, we needed a deposit to start and the balance was due on completion of services. We are not in a position to be able to extend credit to people, waiting for repayment as we would never make any money that way. In fact it’s a great way to go out of business very quickly! Some people understand and we get hired, others don’t. For us, this helps us weed out the clients who don’t value our services and who aren’t committed to the process. We want to help but we aren’t a charity and we expect to be paid for our services once the staging is complete so that we can continue to offer our services.
I love what you said, “we are not in a position to be able to extend credit to people.”
Exactly, no home stager should be a bank for their clients. It’s amazing to see stagers feeling like they have to bail out their clients; especially when they are selling homes worth far more than their own. What’s up with that?
Heather, it’s been great watching your business grow over these years since you and Alana took the Staging Diva Training Program. Thanks for popping in to comment!
Great comments for a new home stager! Thanks for sharing.
Thanks for adding yours Cynthia! Isn’t this an awesome community? I’m so proud of all my Staging Diva students!
I have learned to watch for those famous words, “There will be lots of future work….” Those people are almost always trying to get me to lower my price with promises. And not ONCE have they been any use to me later. I think their business model is to try to cheap out, and they aren’t very successful.
Thanks for commenting Beth! I totally agree with you!
As both an interior designer who specializes in staging and a licensed Realtor. I explain to my fellow agents when they ask THAT question…..
that I’m providing a service for the seller & them and just like when the home inspector, bug co, heating & air co come out and preform a service for that listed property they get paid at the time of service not when they close on the home. I have lowered my price for agents since I personally understand their side of the situation but 9 out of 10 times the seller pays for the staging since its their home and I need their permission to hang art, move things, etc. So my advice is to get paid by the seller and market the agents for the referrals to make their listings look amazing.
Excellent points Tiffany, thanks for sharing — especially since you have the perspective of being both a stager and licensed Realtor.
I also agree that being paid by the seller is best. In my training program I teach that the real money in home staging is actually with the sellers not the agents and then I share a detailed marketing plan for both and how they fit together.
Tiffany-
You make a very valid point; 90% of the time we the home stagers, get paid by the Seller/Investor, not the realtor.
It is not wise for a stager to negotiate postponing their payment with a realtor on providing a service for a house that does not belong to the realtor. That’s just stupid.
So, if the realtors can get away with it, then good for them. But from where I stand it’s the job of the stagers to understand and know who pays their bills. When I am contacted by a realtor on a project, I always ask: who is paying the bill; that way I know who I need to talk to and have a legal and binding contract with.
Well said Keti, thanks for commenting!
Hi Debra, I appreciate all of your comments and help you give to everyone. I have been officially in the the staging business for over three months. But I have been doing decorating or staging for years,,,,just never got paid for it. I just did a job for a RE agent, and the owner was a bank, because I was excited about getting the job, I agreed to start without pay. It was basically a partial staging. Anyway, took three weeks to get paid. So I am learning the hard way about not giving my services away. In that job, I rented furniture and supplied all staging props. So I guess you live and learn. Thank you so much for sharing with all of us. Your Great!
Cynthia, thanks for sharing your experience of being a “bank” for the bank, how ironic is that?!
Sometimes we have to have a personal experience like that to really hit home why we won’t do something again. I’m sure you learned many things from that experience that will serve you well in the future.
I also appreciate your feedback and I hope that I’ll see you in my courses so that you can get ALL the pieces of the puzzle to really make money as a home stager:)
Thanks for this discussion Debra, very necessary for all Stagers to understand that in most cases this business model will drag anyone down. Like Beth, when I hear the promise of more and future business I mentally run for the hills! My answer is always a big NO (tactfully of course). I am a professional service provider not a lending institution:) and have stayed in business for over 6 years because your courses were a great lesson in this when I started out. Have a super Thanksgiving!
Ana, thanks so much for commenting and sharing your experience! I can’t believe it’s already more than 6 years since you took the Staging Diva Program. Congratulations on your continued business success! I’d love to write an article about you to help promote your business. All you have to do is fill out our easy peasy submission process and I do the rest, no charge to you!
Wonderful and empowering. Glad you hit the Publish button! – Amy
Thanks so much for that feedback Amy, much appreciated!
Debra,
This is an excellent article and very empowering.
I was asked by a realtor to stage a property and then wait until closing for payment. Realtor even promised a higher staging fee if I waited and additional home staging projects.With each additional phone call and my questioning how the deal would work (his comment-if the deal did not close I would receive no payment and that I should work in earnest ) it became evident that the business model you suggest to us which is …getting paid at the time of service …is the best business model there is.
It makes no sense to be busy staging numerous jobs only to wait endlessly to receive payment. Clients that are willing to pay you at the time of service understand and believe in the value you bring to the project.
Thank you for a great business model to follow and also for articles like these. It’s great to hear comments from other homes stagers and how they handle these situations.
Thanks for adding your experience to the discussion Lori, really appreciated. Feel free to share this article online too. Would love to have more stagers commenting as everyone can add their experience. Also comments always give me ideas for future articles 🙂
Thanks again for popping by!
Hello Debra, I have had the exciting opportunities and now lessons of
staging many wonderful homes I realize that at the end of each staging project I must ask for payment. However, huge learning curve….I didn’t. I said I would send them my invoice.
In fact, for May & June, I have sent out 20 invoices. Of which only 1 client has answered, left a great testimonial and above all PAID. So, I do know that they all received my invoices. Now, here’s my question. Now that all these homes have been sold, how do I politely ask for payment? Some, I contact by email and others by “snail mail”, letter & thank you notes. Many thanks in advance, Carell-Ayne Whalen
Carell-Ayne, Thanks for sharing your experience. What a perfect example of the perils of not getting paid when the service is rendered.
At this point I’d stop worrying about being “polite” and start worrying about actually getting paid. Every day that passes, makes that less likely.
Your clients aren’t not paying you because they forgot, they are taking advantage of you. You’ll have to step up your efforts to the point where they are embarrassed by their behavior, or just pay you to get you to stop pestering them.
Pick up the phone and call them and suggest a time that you’ll come by and pick up a check, or send them an invoice by PayPal that they only need to click to pay. In other words, make it as easy as possible for them to pay you and don’t accept “I forgot” as an excuse.
Lastly, I strongly encourage you to follow the business model I share in the Staging Diva Home Staging Business Training Program to avoid ever getting in this situation again and to learn how to get your whole business into shape for maximum joy and profits.
Thanks again for commenting, I know this will greatly help others too!
Debra is absolutely right. I always pay my stager right away. Her point #4 is true. We realtors spend a lot to make a lot. It doesn’t apply to staging services, just like it doesn’t apply to advertising. Both have to be paid right away.
Thanks so much for commenting and sharing your experience as a successful real estate agent Catharine!
Great post, Debra and all great reasons why as a home stager, we should not expect to be paid at closing. Not being paid immediately is a double loss as a home stager. Your inventory isn’t making your money (if you own) and also you have to go out and reinvest in new inventory to take on new jobs.
Great additional points Helen, thanks for commenting!
I’m a graduate of Staging Diva Business Program. Debra is 100 percent correct. She nails it on the head in everyway. Always get paid first. Never let persuasive promises change your business model. Doing business with real estate agents is great but it’s not the only way to get clients. There are so many different ways to market home staging:)
Jacob, I so appreciate your comments and love what you took away from the Staging Diva Training Program. Absolutely more ways than one to market home staging and way less frustrating (and more profitable) ways than focussing exclusively on real estate agents.
Hello,
Thank you for this wonderfully helpful info. I too recently started a”light” Staging Business in So Cal. Met a Realtor at an open house that said the way he works with Stagers is they come up with it all up front for the sellers and REALTOR then get paid after the home sells! Being new with this and happy to gain business, it still did not sound like a plan I’d want to be involved in. Having no control of my hard work, money tied up, etc. I did not pursue to work with this particular Realtor. A small job I just staged for an empty home for a Realtor and his seller was paid for all by the Realtor…at least to me. The Seller and Realtor may have made an arrangement. This is how I look at the STAGING process overall…
The Realtor makes a commission from the sell of the owners home. THEY SELL THE HOME. If the home doesn’t sell as quick as they like, it is up to the Realtor to price it correctly for the demographics and eval of home market, etc.. Waiting to get paid until the home sells is not good business sense and setting a STAGING business up for failure. The home could possibly not sell and this is not in the control of a STAGER. 1st time using a STAGER is putting money out there for the property.. it is a return to be gained by the REALTOR… the next time around they are rolling it over. I’ve sure appreciated reading these comments. Thank you.
Thanks for commenting Denise and sharing your experience!
I am still in the training process, but I have thought a lot about the concept of clients wanting “free estimates” (not exactly the topic here, but along the lines of not getting paid right away).
I’m aware that some businesses, such as painters, roofers, landscapers, etc. will do free estimates, but those generally involve a short amount of time spent looking at the home involved and taking some measurements, then sending the client an estimate. From my experience, this process usually takes less than half an hour.
Of course, most of these jobs are probably ones the client is not planning (or able) to do themselves, so it’s more a matter of who gives them the best estimate, and perhaps which contractor they feel most comfortable working with.
A stager can’t really go to a home and quietly look it over in half an hour or less and then give an exact estimate of the number of hours and cost involved to stage the home, as staging isn’t as straight-forward as painting or roofing or laying sod where the contractor has a good idea of the time and expense the job requires because there are fewer variables and they done nearly the exact same types of jobs before.
I doubt a realtor would try to tell a contractor who painted a home or did electrical work or resurfaced the driveway to wait until closing to get paid, despite the fact that those services would also be helping the home to sell faster.
The staging process will start when you enter a clients home and start answering questions and giving advice. I feel like this is an angle I can use to explain to clients why I wouldn’t do a free estimate as well as to real estate agents who think I shouldn’t get paid until closing.
Am I on the right track with this thinking?
I researched stagers in my area and came across two websites (stagers appeared to be trained in same way as both had the same so called “staging credentials” logos on their sites and both charged ten cents a square foot for staging, rather than an hourly rate).
The way I see it, a very large home could actually need very little staging and a small home could need a lot, so charging by the size of home doesn’t make sense to me at all.
Hi Vicki, You will get more info about all this as you finish listening to the full Staging Diva Training Program. I know you’re still in the process of listening to it.
You made an excellent observation about the difference between a painter or roofer doing a free estimate and a home stager doing one. Yes, when you go in and do a free home staging estimate, you’ll actually end up doing a free home staging consultation. As you pointed out, that’s because you’ll be answering the potential client’s questions like, “What can I do to make this kitchen look better without renovating?” A roofer would only be saying things like, you need to replace your roof and the client has no way of doing that on their own.
Also agree that a roofer wouldn’t wait until a house sold to get paid. Just because real estate agents are stuck with that ridiculous practice, we don’t have to be.
I love that the two stagers in your area have those bogus “credentials” I keep warning people about and that they’ve learned that they should charge 10 cents per square foot! If that’s not a recipe for working at or below minimum wage, I don’t know what is!!
Even in a 7,000 square foot home they’d be earning way less than you will as a Staging Diva Graduate!!! And you’re right, you could find plenty to keep you busy for hours even in a 500 square foot condo. Would they only charge $50 for home staging? Just plain dumb.
Don’t worry, your “competition” won’t be in business very long! 🙂
Keti, thanks so much for sharing this awesome example of another way to structure things! I’m curious, did you look into how complicated it would be to actually put a lien on the property had it come to that?
Keti, Would you be available to help with the specific lingo you used in your contract? Thank you!
Hi Debra. Yes I did. I discussed it with several Title Agents cause I wanted to make sure it was an option available to me if I ever needed it.
My husband is a contractor and placing a lein on the property is what we do if we are not paid. We have to provide some of our customers with a statement that all of OUR subcontractors have been paid in full upon completion of jobs.
Good for you Keti and thanks for replying so quickly. Do you care to elaborate on what the process would be? I’m picturing lots of paperwork and possibly the need for a lawyer’s services – both of which would discourage me from going down that road.
Thanks, Keti!
Thanks for commenting Sherie! The possibility of putting a lein on the property is something that came up in one of my Staging Diva Dialog calls. That said, I’d rather get paid along the way and avoid potentially being in this situation altogether! But, when necessary it’s good to know that option exists!
Contracts are discussed in detail (and templates provided) in the Staging Diva Home Staging Business Training Program.