Getting Your Edge: How to Rightsize your Home and Life.

Revive and Thrive. Remodel to Sell without Upfront Costs

September 04, 2024 • Dennis Day

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Can strategic renovations really boost your home's value by 20%? Join us as we chat with Jessica Morrow, the Chief of Staff at Revive, to uncover the game-changing strategies that homeowners can use to transform their financial futures.

She's here to reveal how Revive not only connects homeowners with pre-vetted contractors but also fronts renovation costs, all designed to increase your home’s market value dramatically. You'll learn how skipping pre-sale renovations could mean leaving thousands of dollars on the table, and why downsizing is becoming a major trend, especially in California.

In the second part of our episode, we share a Revive life-changing success story—how investing $100,000 in client's home during the pandemic skyrocketed its value and enabled her to retire comfortably. Jessica also offers a glimpse into the future with Revive's groundbreaking Vision AI tool, set to revolutionize the way you analyze your selling options. Plus, hear about unique cases where homeowners decide to stay post-renovation, showcasing the unparalleled flexibility Revive offers. If you’re curious about maximizing your home’s potential and want to hear success stories that could inspire your next move, this episode is for you!

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Dennis Day:

Welcome. This is Getting your Edge how to Right Size your Home and Life podcast. My name is Dennis Day and I'm here with my special guest, Jessica Morrow of Revive, and we're going to discuss how to improve your bottom line when you want to sell your home. I'm really excited about this because Revive is a great product. I think it can really help people increase their home's value when they sell. So, Jessica Morrow, let's start off telling us who you are, what is Revive and how it can help people improve the sale price of their home.

Jessica Morrow:

Thank you. Thank you so much for having me, dennett. As you mentioned, I'm Jessica Morrow. Thank you so much for having me, dennis. As you mentioned, I'm Jessica Morrow. I'm the Chief of Staff at Revive. We're a California-based company and essentially we help homeowners maximize the value of their home. Our mission is really to transform the home selling experience for homeowners and real estate professionals by leveraging innovative technology, financial solutions and a network of fully supported contractors to renovate to maximize sales price, and essentially that's what we do help people renovate to maximize their home value.

Dennis Day:

Okay, how we know, is that.

Jessica Morrow:

Oh sorry, go ahead Well apologize, I interrupted, go ahead. It's going to say that today's buyers prefer turnkey upgraded homes. It's the HGTV generation, so we're helping to bring that product to market.

Dennis Day:

Okay.

Jessica Morrow:

So how are you different from a contractor who does remodeling, that's local? They just happen to be pre-vetted and trained by Revive. The difference is that Revive fully supports those contractors. We do a design tailored to buyer's taste. We bring that vetted contractor, we do all of the planning and getting everything into that contractor's hands. So front and back office for them, so they can efficiently and effectively do that job. And then the cherry on top is that we front the money, so we pay for everything up front and get paid back at closing.

Dennis Day:

So if seller wants to use Revive, they will not have to put down a deposit or pay any upfront costs. It all comes out at closing. Is that correct?

Jessica Morrow:

That's correct. So as long as that homeowner has enough equity to pay us back, then yeah, there's no upfront cost. It's all collected at the closing table.

Dennis Day:

And generally, how much equity must they have as a percentage? And generally, how much equity must they have as a percentage?

Jessica Morrow:

So typically we're looking for them to have what we would like to see as a 20% equity buffer. So we look at, do a simple math is we look at the after renovated values and calculate what we think the home will be for after renovation. And then we want to make sure that they have enough money to pay off any debt that's on the home, so pay off their mortgage. We want to make sure they can pay their realtor and pay us back for the renovation, and then we want to be about a 20% buffer there just in case of any market fluctuations.

Dennis Day:

What are the trends in downsizing? Have you noticed anything? Are there more people moving to smaller homes, condos, vacation properties? What have you noticed anything? Are there more people moving to smaller homes, condos, vacation properties? What have you seen at revive?

Jessica Morrow:

well, we've definitely seen people moving to smaller homes. Where, as I mentioned, we're at california-based company, we work in multiple states, but our backyard is cal, california, and so something we've noticed a lot is people downsizing and moving out of California and into more reasonably priced areas.

Dennis Day:

And what about the impact of remodeling on this? On the bottom line, how significant can the upgrades lead to a better sales price for the homeowner?

Jessica Morrow:

It can be very significant in many cases. There's a stat that I wanted to share that 6% of sellers leave anywhere from 15% to 20% of their home equity on the table if they don't do any pre-sale renovations. This is a value add large, especially if it's done correctly. And something to touch on is there's many ways to get a home ready for market. We see buckets, there's value preservation and then there's value add, and each could be right for different clients, but we can help people with renovations such as fixing a leaky roof or just simply decluttering and staging a house. Those are things that would be value preservation versus the value add. Items that are going to be appealing to the wide range of buyers, like peat flooring, new kitchens and bath landscaping, are typically the items that are going to bring the best return on investment.

Dennis Day:

So how do you figure out what the renovations will be the best for individual homes?

Jessica Morrow:

That's a great question. So the way that we do that is by analyzing. We analyze the home as it is and then we do an analysis, just like realtors do at the comps in the neighborhood, and we want to try and figure out what is the client's goal. So if the client's goal is to hit the highest exit price possible, we're going to want to look at the homes in the area that have sold for that highest price and we're going to want to see what did those people do and we're going to want to do similar renovations, and so we do an analysis to see what did those people do. We're going to want to do similar renovations and so we do an analysis to see what do we need to do to this home to meet the client's goal. And typically that's figuring out what other homes sold for it the highest and what they did and then tailoring those renovations. That way.

Dennis Day:

Okay. How is the customer involved in the home seller involved in the process of figuring out which renovations to do, and so forth?

Jessica Morrow:

The seller and the agent are have. It's really completely up to them as to what renovations they want to do, as to what renovations they want to do, budget they want to spend and what level of finish they would like. And then it goes to Revive, to do the actual design to fit into each of those boxes. But the homeowner we get together with the homeowner and their agent to really understand our goals and help be a guide, but at the end of the day the homeowner's in control of what gets done and how much it costs.

Dennis Day:

Do they have control over things like the paint color and which cabinets might go in, so forth?

Jessica Morrow:

So they don't. We have a product called Renovate to Stay for people who aren't selling their homes and they get to meet with the designers and go through the whole process. But our Renovate to Sell program is really designed for efficiency, for speed and it's really tailored to buyers' tastes. And oftentimes when a home seller gets too involved in that process, they start making decisions based on their own tastes and not necessarily based on what the buyers are looking for. So no, the paint colors. We try and make that as neutral. We've done it thousands of times and really know what the buyers are looking for.

Dennis Day:

So you're looking at what buyers are looking for and you're looking at trends in homes that have been selling in the area. So what are some of the common mistakes that homeowners do when they renovate by themselves?

Jessica Morrow:

So we touched on that a little bit in the last question. So the first thing is designing to their own tastes versus what the sort of HGTV next millennial generation are looking for. So that could be one. And then another thing is either spending too little or spending too much. So we see that when people renovate or make their own decisions, sometimes they feel like let's save money and just invest a little bit, but oftentimes then they miss the return because they're spending too little. Other times people over-invest and don't get a return on the investment, and so there's definitely a sweet spot and that it helps to have another professional involved to help make those decisions, another professional involved to help make those decisions. Some others are going with the wrong contractor or just trying to find the cheapest price over quality. Sometimes people just get in their own way, and something that we require and we can also help people with is to be out of the house during renovations. Living through a renovation can sometimes be really detrimental.

Dennis Day:

It's awful awful, especially kitchen renovation. It's just horrible.

Jessica Morrow:

Anyways, go ahead so those would be some of the but I would say number one is spending too little or too much, or really designing to your own taste versus really thinking about what a buyer would be looking for.

Dennis Day:

So one of the things that if you were to renovate on your own, what things would you don't return value. We talk about our return on investment and some things do return an investment and some don't. What are some things that do, and then we'll go to what things that don't.

Jessica Morrow:

And this can change based on the market but the area. But I would say that things that bring the most return on investment. Number one is simply depersonalization. There's a stat, I think, that a house that's depersonalized will sell for about 2% to 3% more than one that's personalized.

Dennis Day:

Can you say what depersonalize me?

Jessica Morrow:

Depersonalization would simply be decluttering, taking photos down, taking tchotchkes and knickknacks down, just making it into a more of a neutral, less lived in space. So that would be number one. And staging, I think, is the second which brings, on average, I think, a three to 4% return. So those are be number one and staging, I think, is the second which brings, on average, I think, a 3% to 4% return. So those are two big things. But when it comes to actual renovations, we see neutral paint being probably the number one return on investment. New flooring is a big one. After that you probably get into refreshed or renovated kitchens and bathrooms. That you probably get into refreshed or renovated kitchens and bathrooms. And then the two other things that we find that bring a return are light landscaping so curb appeal type of items and landscaping and just those small accessories like new door handles, new door hinges, new baseboards. There's little features that actually are inexpensive to do and bring a good return.

Dennis Day:

So you were talking about depersonalizing and you want kind of a generic home. Why is that? Why doesn't the seller want to broadcast their life in the home?

Jessica Morrow:

A buyer. When they walk into a home, they want to be able to envision what it would be like for them to live there, and they want to be able to yeah, just really envision their life in that home. And I think that can get clouded if you're looking at the 20 photos of the grandchildren on the wall. That is hard to then envision that it's your home, and so it's really about allowing that experience for the buyer to make it feel like they could personalize it for themselves and their family.

Dennis Day:

Okay, what are the big things that don't return your investment?

Jessica Morrow:

This can differ from place to place, but things like digging a new pool, things like adding solar in some cases, so some things that don't add as much ROI. Yes, and it's the personalized things that you may feel like gosh, we've always wanted to add that waterfall in the backyard or these things that are really personal to people that just maybe aren't as important to others, but it's the types of things that are a little too niche.

Dennis Day:

I heard that a brand new deck, which is quite expensive, is not really a good return on investment.

Jessica Morrow:

Yeah, that's an interesting one. Now, if your deck is not to code or it's falling apart, things like that, so fixing it. But yeah, sometimes building new things building a gazebo, as I mentioned, digging a pool, putting in an exotic tree these are things that maybe if you lived there and you love that sort of thing, might be nice, but not that's going to actually get a return on your dollar, but not that's going to actually get a return on your dollar. Those things don't bring the ROI and we leave that more up to the buyers of the property to do something like.

Dennis Day:

So let's talk about some of the success stories you've had in downsizing, where Revive has come in, done the work and then the owner has really succeeded in getting a great price for their home.

Jessica Morrow:

As I was thinking about this question, a particular client came to mind and this was a couple of years ago. Kimberly was a homeowner who owned a home here in California and she had owned it for about 25, 30 years and had raised kids in the home. It had been her home for a long time and she ran into some financial difficulty. It was around when COVID was really rampant and she had lost her job and she had gotten really, really behind. She was behind on her mortgage and she was having a hard time sort of being in California hamster wheel and her house was also in bad shape and her house was probably worth about $350,000 in its as-is condition. It was missing flooring in places. It was not in great shape and so we came in and we invested about $100,000 in the house and that was the new floor and kitchen and bathroom upgrades and it raised the price of that house, or the value of that house, significantly.

Jessica Morrow:

I think she sold it for about $650,000 or $700,000. So she made anywhere from $200,000 to $300,000 more than she would have selling it as is. She moved to Denver, she wanted to move to Colorado, the outskirts. She moved into a prefab home, so she really got a home that was a lot less expensive. She was also able to invest in small investment property with those funds, and what was really amazing is she went from being in a really dire situation where retirement was not even on the table, to being able to live out the rest of her life really well, and so she was able to what we would say retire with dignity. And there's a really impact story because I got to work actually really closely with her and see how significant that was for her life, and so that was one that really sticks with me for a downsizing story.

Dennis Day:

You changed her life. Does Revive have any stats about, on average, how much after your renovation will gain in sale price versus selling as is?

Jessica Morrow:

Yeah, there is. So, as I mentioned, a lot of people leave at 15 to 20% of the value on the table. They don't renovate. We are seeing our averages most recently are about $146,000 more than selling as is. That's just an average number $146,000?. Yes.

Dennis Day:

That's fantastic. Now you offer all these services. How does Revive survive as a business? How are you compensated?

Jessica Morrow:

That's a great question. So Revive actually makes its money from the contractors, and so it's really nice that the homeowners not only don't have to pay till closing, but there's no fees or interest or anything on the money. The way that Revive makes its money is by getting paid from the contractors for all the support we provide to them. So I mentioned the design. Each project gets an owner's representative assigned. We help them with the scope and the permitting, and so we're really the full front and back office for these contractors and we get paid for the services we provide them and are able to offer a really competitive price to the homeowner, as if they were hiring a regular contractor, but without any payment till close.

Dennis Day:

And that really makes a big difference when liking the example you had where somebody who really needs to move and doesn't have the money to keep it, or those homeowners who have a hard time or can't afford to maintain their home. So what do you think? What do you see in the future for renovation and downsizing in, say, the next 10 years or so?

Jessica Morrow:

well as far as renovation and downsizing over the next 10 years, I think it's going to be similar.

Jessica Morrow:

I think that people will continue to need to downsize.

Jessica Morrow:

People will, so that will be a pattern that I'm sure will continue people moving that downsizing or moving out of state.

Jessica Morrow:

The future for us in this industry is we want to continue to offer options, clients, to homeowners and agents so that they can achieve their goals, and something that we're excited that we're working on is a software that we call Vision AI today, and essentially we want every single homeowner, at the click of a button, to know all of their options when selling a home. We want them to know everything about the neighborhood, everything about their own home, the value of their home, as it is what they could do to that home to raise the value, and created a product and we're continuing to make it better and this is a product that uses computer vision and essentially, with a click of a button, you could put your address and upload photos of your home and in seconds it does an analysis and gives you all of your selling options, and so that's something that we're really excited about, and we want to be in the hands of every homeowner, whether they're upsizing or downsizing, we want them to know all of their options and to help them reach their goals.

Dennis Day:

I don't know if it's happened, but what if you do this renovation and the homeowner says, oh, I love it, I want to stay.

Jessica Morrow:

It's happened one time. One time and it's yes, it's happened one time. A lot of people love their renovations, but most people have moved on to their next place. But it did happen one time where someone was falling back in love with the house we don't want to move, and so that homeowner simply paid us back for the renovation and kept their home.

Dennis Day:

Great.

Jessica Morrow:

And we do have a renovate to stay product where anyone, even if they're not selling their home, could utilize our services and our contractors and our streamlined process to renovate a home that they'd like to stay in. They just have to pay for it in installments, like you would a regular contractor.

Dennis Day:

It sounds like it's very simple and easy for the homeowner versus trying to find a contractor or being their own subcontractor.

Jessica Morrow:

Yes, definitely. There's a lot of fear and anxiety that comes with finding, hiring and managing your own contractor, and you could probably ask anyone who's ever done it. Almost everyone has a horror story either that they've gone through themselves or they know someone who's had a hard time. So we're trying to alleviate that fear and that stress and those constraints to make it easier for the everyday homeowner to do that easier for the everyday homeowner to do that.

Dennis Day:

And at the time of design and so forth, the homeowner says, no, this is going to cost me too much, I don't want to do this, I'm going to go my own. Is that something that Revive can handle?

Jessica Morrow:

Absolutely. We are there to offer options and our guidance and we always bring it back to our ROI and the homeowner's goals. But if that is something that they choose to do on their own, then that's completely fine. As I mentioned, we also have services where we can provide just design services or we could offer more and tailor it to that person. But it's totally fine to come to us, get your options and understand, and if you don't end up going with Revive, that's okay too.

Dennis Day:

You mentioned the Revive to stay. Can you talk about that a little bit?

Jessica Morrow:

Sure, as I mentioned, whether you're selling or keeping your home, renovations can be scary. They can induce a lot of fear and anxiety. So I think value for Revive's Renovate to Sell is that we front the money, but that's just a small portion of it. The ability to tap into a vetted contractor network to have a designer, to have a streamlined process, can be really beneficial for people who are just renovating to stay. Anyway, renovate to stay yeah, it's a way to tap into all of the services and efficiencies that Revive has created efficiencies that Revive has created and for homeowners who'd like to do that, they pay a small design deposit and they make payments as the project progresses, but they get everything that they would have gotten with a renovate to sell. The design support the owner's rep from the Revive team who helps to keep the project on track and on budget. So it's a great way for people to tap into a streamlined renovation process.

Dennis Day:

And Revive. Has the Revive to sell, Revive to stay? Is there any other Revive projects going on?

Jessica Morrow:

Yes, we have one other and it's called Sell 360.

Jessica Morrow:

So there are some homeowners who have a home that is in need of renovations.

Jessica Morrow:

They want to sell, but they simply don't have the time to go through the process.

Jessica Morrow:

That does take some time.

Jessica Morrow:

There's time to prep for the renovation, then there's the actual time to renovate, and then there's the time to sell the house, and so you could be talking about three extra months or so, and a lot of people especially if they're in some kind of financial distress or whatever it may be they don't have time for that, and so oftentimes those sellers are left to sell on the open market to what we call like a vulture investor and leave a lot of money on the table.

Jessica Morrow:

So we came up with a product called Sell360, where we purchase the home from the homeowner, we renovate the home and then we pay them all of the profits on the back end, so they get a portion of their profits up front. We take on the renovation and then we take on the set, we sell the house, and then it's really great because the homeowner then gets all of the additional profits, less a small revive fee of 6%. It's usually people hearing some kind of need to sell quickly but don't want to leave the money on the table or sell to a vulture investor, so it's a really great way to tap into the renovation without having to wait.

Dennis Day:

Sounds fantastic. I really enjoyed working with Revive when I worked with John and I think you're a great company, so I highly recommend it to any of our listeners or viewers because they do a bang up job and they have three different programs the seller 360, the renovation to sell and renovation to stay.

Jessica Morrow:

I just really appreciate you taking the time to sit down and talk to us and learn about our company and, at the end of the day, we want to help homeowners maximize the value of their home and keep all of their hard earnedearned equity in their pocket, and so I appreciate you letting me speak to your viewers and listeners about it.

Dennis Day:

If someone wanted to get more information about Revive, where would they go?

Jessica Morrow:

They would go to wwwrevivedate, so you can find it at reviverealonline.

Dennis Day:

And what was that percentage that people are leaving on the table without using a remodel renovation project like Revive?

Jessica Morrow:

Typically, yeah, 15 to 20% of equity that's locked away. That just simply needs unlocking.

Dennis Day:

Wow, thank you so much. I really appreciate your time, jessica, and that's it for Getting your Edge how to Write Signs. Use your Home and Life podcast. I hope you've enjoyed this episode. We are edgegroupteamcom. Give us a call. The phone number is at the website Revive Real Estate, is that correct? Yeah, thanks so much, jessica, appreciate it. Bye-

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