Dilemma of a home stager - when to charge?

Just for fun -- here is a post I wrote well over a year ago regarding payment titled, " When you pay me depends on when I do you! "

http://activerain.com/blogsview/351496/when-you-pay-me-depends-on-when-i-do-you

that being said, times have changed; homes are sometimes bank owned . . . just the same; stick to your guns and be cautious! 

Adam - You may find that many people do not have any extra funds at settlement time as they may be underwater on their mortgage and other debt.  You are better off collecting upfront.

My jobs are half up front.  Half when finished and rent is due each month starting with the 4th month.   I get three months rent up front.

This has been a real problem in the staging industry. Competitive stagers in our area who had a LOT of capital began doing this when the market was very busy. I did this for some clients because to NOT do it was going to lose me jobs. I don't bill to escrow anymore and the very large staging companies that used to do this are really pulling back on it. Since business has slowed down greatly due to the economy, they realized how very hard it is on cash flow to never know when you will get paid on inventory that is sitting out there. The last time I did this, the property was overpriced and sat for a whole year. I did get paid when they finally pulled it off the market ... it never did go into escrow. So, essentially, I had furniture on loan to them for a whole year, but did not make more money on that furniture than I did on other jobs that paid me each month. Not a good deal for me.

So, my best advice is not to do it. If you just feel you must, here are some tips.

1. charge more for this than for clients who pay as they go.

2. get an attorney to write you an iron clad contract covering all scenarios. The property may never go into escrow ... your client may go bankrupt before it sells or may go into foreclosure ... they may just pull it off the market without selling ... if the broker is your client as opposed to the seller, they may lose the listing before it sells.

3. See if your attorney can write the contract so that the seller grants you the right to put a lien on the property for payment.

Final advice ... don't do it. So many things that can go wrong.

I agree with others who say ... don't do it.  Too risky since you have NO control over the factors that govern whether the listing is priced right, the market conditions, the seller's financial situation, etc.

We've been asked about payment out of escrow and will not go down that road.  There are far too many unknowns, and especially in the current market, many homes are not selling for more than is owed, so there is nothing left at escrow.  I'd rather lose a job than do one and not get paid.  It's not worth it!

When we polled a group of Realtors about why they reluctant to sell, price was #1 and wanting to defer payment was #2.  So we offered to defer payment UNTIL THE CLIENT TERMINATED THE STAGING (not until it sold) and tacked on a 10% fee.

No takers.  I guess they didn't like the part about the additional fee. 

I would suggest you may the payment due when the staging is ended by the client, not when it sells.  What if it doesn't sell?  I'm not a lawyer and perhaps we should consult one for the right wording.  After all, what if the client never technically ends the staging and just leaves it there until you scurry over to protect your inventory because the house is basically abandoned?  On the other hand, we're in a small community and if a Realtor were to try this, word would get around.

Oh, and we do own 100% of our inventory.

I wouldn't do it.  Your inventory could become difficult to retrieve, if the house sits too long and the sellers lose the house...you not only don't get paid, you can't get your inventory back.  Too many issues for me to take the chance.