Are you paying twice for that allowance?

Real Estate Agent with Keller Williams First Coast Realty - The Marro Team

Are you paying twice for that allowance? 

home staging jacksonvilleI just finished reading Should I replace my carpet? by Stan Stepak. I completely agree with his supposition that buyers want move-in ready properties and worn carpets are not going to seal that deal. Some agents will recommend that rather than doing the necessary work, whether carpeting, painting, wallpaper removal or other updates, sellers provide an allowance. The argument is always the same... let the buyer choose the color or style that they want. 
As a professional home stager turned Realtor, this just makes me cringe. 
First, an allowance does nothing to overcome the initial problem of getting buyers to fall in love with the home. The shabbiness of the current problem will be a huge turn off and the pool of buyers who will see past it will be much smaller than if the problem was taken care of in the first place. This may mean more time in carrying costs or additional price reductions because the buyer pool is smaller and as a result the home will take longer to sell. 
Second, when a buyer does see beyond it, they will virtually ALWAYS offer less than list, equal or greater to the amount of the allowance. They will also still expect the allowance. This leaves buyers paying for the same thing twice. As if that isn't enough, buyers will also often expect a higher quality fix than the seller could have done, had they done it themselves. Guess who ends up paying for that? Yep. The sellers. 
When all is said and done, the seller, who is trying to save either time or money will end up paying more for both things. The profession of "flipping" has been lucrative, even during the recent decline (although there are far fewer in the market). My staging business had one flipper customer who averaged 15 properties per month for the last two years. Most of the changes were minor - Paint, wallpaper, flooring, landscaping. Still he made enough money with these minor fixes, including paying for staging costs, to earn huge profits and keep teams of workers moving. Wouldn't it behoove most sellers to do what the professionals do? 
Thank you for reading... Are you paying twice for that allowance?
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 Author Bio: Melissa Marro, Home Staging Industry leader, Realtor, and entrepreneur offers a unique perspective on New Home Construction, Resale Residential Real Estate, and Home Staging

For more information on buying or selling in the Fleming Island, Orange Park, or Jacksonville, area, visit or call Melissa Marro (marro.melissa at, Keller Williams First Coast Realty, for more information (904-466-2093).


Comments (34)

Julia Maher
Nestings: Connecticut Home Staging and Model Homes - Fairfield, CT
Connecticut Home Stager

Excellent argument and points, Melissa!  Suggested.  Why give buyers ammunition to lower their offers?

Sep 10, 2012 02:55 AM
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota/Wisconsin Real Estate Expert

I think getting the nice and updated flooring in first is the way to go.

Sep 10, 2012 06:13 AM
Kathy Nielsen - Marietta, GA
Atlanta Georgia Home Stager

Woot! Congrats on this well deserved feature.  Now off to read (and comment) on your other posts. You're on a roll.


Sep 10, 2012 06:48 AM
Melissa Marro
Keller Williams First Coast Realty - The Marro Team - Orange Park, FL
Jacksonville Real Estate and Home Staging

Julia & Kathy - Thank you for the "suggest" .... It looks like you did it!! This post has been featured!! Yay!

Chuck - I agree. 

Sep 10, 2012 06:59 AM
Beth and Richard Witt
Long Island Cash Home Buyer - Center Moriches, NY
Long Island Cash Home Buyer 516-330-6940

Congrats on the feature... always good advise... we have been flipping houses successfully for many years and the key to our success is not only buying right but selling right and selling right always means perfect condition!!!


Sep 10, 2012 07:06 AM
Bruce Kunz
C21 Solid Gold Realty, Brick, NJ, 732-920-2100 - Howell, NJ
REALTOR®, Brick & Howell NJ Homes for Sale

Hi Melissa. You make a great point toward making the home move-in ready. I'd not thought of the 'flipper' comparison. After-all, instead of leaving the home in need of fixing up and waiting for the buyer to make choices, the 'flippers' make the home sparkle and impress. Success is proof of being right!


Sep 10, 2012 07:38 AM
Beverly Carlson
Carlson Properties 325-721-2429 - Abilene, TX
Abilene's Staging Realtor
I agree Melissa. A recent listing got a10,000 concession to replace the $5000. Carpet. The buyers always have expensive taste!
Sep 10, 2012 10:43 AM
Mike Cooper, Broker VA,WV
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Melissa, that has been my experience too.  The buyers will deduct the change from the offer price.   Some of my buyer's wanted to have an allowance, but some wanted everything done before close. 

Sep 10, 2012 11:19 AM
Melissa Marro
Keller Williams First Coast Realty - The Marro Team - Orange Park, FL
Jacksonville Real Estate and Home Staging

Richard & Beth - exactly! If more sellers took lessons from the pros, they would be so much better off.

Bruce - Thank you. I'm glad my analogy worked for you!

Beverly - it always makes me scratch my head. I just reblogged another stager and her story showed how a seller didn't want to strip wallpaper and paint. So far saving this extra work has cost them over $70K in price reductions... *sigh* it is so frustrating!

Mike - yes, and whether they want an allowance, or it done before closing, the seller ends up paying more than they would have if they did it before it went on the market. 

Sep 10, 2012 11:23 AM
Joy Daniels
Joy Daniels Real Estate Group, Ltd. - Harrisburg, PA

You are so right - I like your analogy.  We ALWAYS suggest to the work - don't give an allowance.

Sep 10, 2012 12:12 PM
Melissa Marro
Keller Williams First Coast Realty - The Marro Team - Orange Park, FL
Jacksonville Real Estate and Home Staging

Joy - good for you! IMO, it is one of the characteristics of an outstanding agent!

Sep 10, 2012 12:46 PM
Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

Melissa:  Very wise.  It's like going to the dentist.  Delaying can cause much more pain than doing it now.  Same with fixing things before the home goes on the market... than trying to do it afterward.

Sep 10, 2012 01:27 PM
MichelleCherie Carr Crowe .Just Call. 408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years
I agree it is better to show than tell.
Sep 10, 2012 02:38 PM
Debbie Gartner
The Flooring Girl - White Plains, NY
The Flooring Girl & Blog Stylist -Dynamo Marketers

Great post, Melissa.  I so agree with you...they are often paying twice...or maybe even 3 times if you include the fact that they delay the offer.

Sep 10, 2012 07:40 PM
Donald Reich
Prudential Centennial - New Rochelle, NY

Great post. Personally, I am not a big fan of allowances. I would rather see the home in good condition to begin with.

Sep 10, 2012 10:32 PM
Brian Kuhns
Coldwell Banker Roth Wehrly Graber - Fort Wayne, IN
Fort Wayne Real Estate by Brian Kuhns

Thank you for putting into words what I've always felt. Rather than skirt the condition issues, get them taken care of and don't reduce the pool of prospective buyers in the process and diminish your negotiating power

Sep 10, 2012 11:27 PM
Mel Ahrens, MBA, Kelly Right Real Estate
Kelly Right Real Estate - Hood River, OR
Customized Choices for your Real Estate Needs

What a dilemma... replace the carpet or offer an allowance. While I agree with you for the most part, sometimes a seller simply can't afford to replace the carpet, while having the price taken out of proceeds of the sale is easier to take. That is, of course, if the house sells since it doesn't show as well with the worn carpet.


Sep 11, 2012 01:07 AM
Melissa Marro
Keller Williams First Coast Realty - The Marro Team - Orange Park, FL
Jacksonville Real Estate and Home Staging

Karen - the dentist is a great analogy!

Michelle - As a professional stager, I always tell people that buyers don't see the possibilities, only the reality. 

Debbie - Yes, sometimes even more than that when you factor in price reductions, etc. It is best to find the money and get the work done immediately.

Donald - It sounds like you understand good marketing!

Brian - Negotiating power.... that only works if you are the one with the power, right!? If they have a way to chip away at a price, that never works in the sellers best interest.

Gretchen & Mel - There are times when there just is no money up front. That's not the norm. The norm is that sellers just DON'T WANT TO spend the money, it's not that they don't have it. They hold onto the money thinking of how they'll need it for future mortgage payments or moving expenses and don't realize that what they are doing will actually further deplete their situation. 

Sep 11, 2012 02:39 AM
Shanna Day Team Leader AZ & UT - Call 480-415-7616
Keller Williams Realty EV (AZ) & Keller Williams SLC (UT) - Mesa, AZ
Top 0.33 of 1% of 79,000 AZ Realtors

I can't agree more - I have a client that is perfectly willing to drop the price $25,000, but to ask him to spend $2500 on paint is beyond his thought process!   Seriously.    I would suggest everyone read and re-read this blog!    Shanna

Sep 11, 2012 07:03 AM
Melissa Marro
Keller Williams First Coast Realty - The Marro Team - Orange Park, FL
Jacksonville Real Estate and Home Staging
Thanks Shauna! That is so frustrating to me!
Sep 11, 2012 07:09 AM