Financing for Agent Out-of-Pocket Expenses

If you’re a realtor, every new listing or hopeful buyer presents an opportunity to earn a lucrative agent commission. But your success also depends on making certain expenses. 

The most obvious ones? Those associated with keeping your business afloat: marketing expenditures, licensing fees, and operational costs, like paying for lockboxes, transportation, and access to the multiple listing service (MLS). 

And if you’re a seller’s agent, you may find yourself making some additional expenses to ensure the success of a sale. You might dig deep to help a client fix up their home, boosting its value, and ultimately earning back your investment when the property sells at an excellent purchase price.

While the logic is sound, spending your own money on a client’s home can be risky—especially if you’re not flush with funds. Here’s more on what types of upgrades are wise to help with and how real estate agents can cover these out-of-pocket expenses with financing. 

Agent upgrades for bigger home sales

Picture this: you walk into a home with tons of potential, but its beauty is masked by an ill-advised kitchen update or dirty, old paint throughout. Your instinct, at minimum, is to let the seller know that fixing up the kitchen and walls will help their property look more attractive to a buyer. You’ll probably even give some advice on what hue to paint and how to make the kitchen more aesthetically appealing. 

You may even go one step further and offer to make the upgrades, contingent on getting paid back when the home sells. But how far is too far? After all, renovations can quickly rack up a big bill. And you don’t need to break the bank for maximum impact. Apartment Therapy cites a case where an agency did roughly $15,000 of work on a home and increased its sales price by over $180,000. Here are a few common upgrades realtors can do as efficient investments—without going overboard.

• A home inspection: Home inspections are often the first step in understanding essential repairs a property needs—renovations that can take precedence over cosmetic boosts. Consider covering the home inspection on your client’s behalf so that everyone is on the same page about known issues with the property. Then, you can make a plan to tackle these flaws, instead of having potential buyers negotiate down the home price because of them.

• Deep-cleaning and de-cluttering: One of the most detrimental eyesores for a prospective buyer is a dirty, cluttered home. It’s challenging for viewers to get a clear idea of what the property truly looks like under all that mess, and, in turn, it’s tough for them to envision imprinting their personality and lifestyle on their would-be new home. You can have the space professionally cleaned and organized as a moderate-cost (but high-impact) upgrade. 

• Landscaping: Great curb appeal makes viewers feel at home from the moment they pull up to a property. So, invest in landscaping and generally improving the look of a home’s exteriors by fixing up pathways or transforming a porch or patio into an inviting seating area. 

• Painting: Peeling, grimy, or garish paint can be a major turn-off for buyers. It makes a space difficult to imagine oneself in and adds one more task (repainting) to the prospective buyer’s move-in to-do list. You can have a contractor put a fresh coat of paint on the interiors and/or exteriors of a home, giving it a major cosmetic upgrade.

  

• Updating appliances: Even a gorgeous kitchen can lose some of its appeal if the appliances are dated. Not only can older appliances be less aesthetically attractive, but they’re also less energy-efficient and functional than newer ones. You can update appliances to state-of-the-art, resource-saving models and give home viewers two perks: a lower utility bill and a better-looking kitchen.   

• Refinishing floors: Floors are one of a home’s most expansive surfaces, meaning that they take up a lot of literal and visual real estate. So, they must look their best before viewers stop by. Some floors, like wood ones, are a perk for home buyers, meaning it’s especially important that they read as an asset and not something to fix. Have a contractor refinish floors to perfection, giving spaces an elegant refresh. 

• Staging: Staging means making a space more inviting and trendy by swapping out and rearranging a homeowner’s furniture, art, and decor. Call in a professional stager to remove excess furniture and move around attractive pieces the seller already has to maximize space. The stager will also bring in decor with universal appeal—helping the property connect with a wider range of buyers. 

Financing for agent out-of-pocket upgrades

Helping your clients earn more sounds great, right? You win as a realtor in that equation, too. But even relatively minimal upgrade expenses, when out of pocket, can be daunting. Thankfully, real estate agents have a couple of financing options to help cover these costs.

• Credit cards for listing agents: Your business credit card can help with expenses in a pinch but at the cost of high interest rates. If you’re able to pay off the credit card debt quickly, ideally before interest accrues, then this payment option might be feasible. However, if you’re looking to make extensive upgrades—spending thousands to get your client’s home market ready—fronting these charges on your card until the home sells may not be wise (or even possible if the card’s limit isn’t high enough). 

• Credit lines or loans: Unless your brokerage offers its realtors an internal line of credit to help with renovation fees, you may not have access to financing for this type of expense. That’s where Titus comes in. Titus offers lines of credit of up to $125,000 to homeowners using one of our partner agents, and repayment comes directly out of escrow.

  

Interested in partnering with Titus? Learn more

Titus works with top-notch realtors to offer a unique seller financing service. Unlike traditional lending options available to homeowners (like home equity lines of credit/HELOCs) or realtors (like their business credit card), Titus’s closing lines of credit combine amenable terms and ease of use. 

Closing lines of credit (CLoCs) supply home sellers with a substantial amount of renovation funding without upfront or out-of-pocket fees. Plus, borrowers don’t risk putting their home up as collateral or damaging their credit score—which could negatively impact mortgage rates on their next home.

To be eligible, the seller needs to be working with a Titus-affiliated agent. Want to offer this bespoke service to your clients by partnering with us? Get started here.