Updated: April 16, 2020

Pre-Sale Renovations is a term that is gaining buzz in real estate circles, and Curbio, a Real Estate technology startup based in Potomac, MD, is attempting to make the term a household concept. Curbio provides a service that allows the homeowner to perform renovations before listing a property with payment for these renovations due at settlement. Curbio’s catchy name is derived from the aspirational phrase: “Curb Appeal Inside and Out”.

A Common Pre-Sale Renovation Situation

So why would a homeowner choose a service such as Curbio?  Here is an example scenario where such an offering might be beneficial:

You’ve decided to sell your home in a buyer’s market. You need to move your family within the next few months and get situated (school registration for the kids, purchase of a new home, orientation of a new job, etc.) in another state. Adding to your stress, there are other properties in your area that have been on the market for over 100 days.

Your realtor inspects your property and informs you that, unfortunately, relative to comparable homes in your area, your home will likely sell below value due to a number of deficiencies. The good news, however, is that you can remedy your competitive weaknesses by performing a few key renovations prior to listing your home. The right updates performed in a timely and cost-efficient manner, can improve the appeal of your home, increase the asking price, and generate a sale faster, than if you did nothing.

Though this approach makes sense, this may sound “too good to be true”, when considering inherent risks and uncertainties surrounding most major renovation projects. When adding the challenges of tight timing requirements and strict ROI (Return on Investment) goals, the situation can become daunting, with a high probability of not getting things done “just right”, “on time”, or “on budget”.  Enter Curbio.

The best and most concise description of their pre-sale home renovation services is Curbio’s tagline:

Renovate Now, Pay When You Sell.

Curbio not only helps you with your renovations, but they also allow you to pay when your property has sold. This post-sale payment option can be a godsend for some equity rich, but cash poor homeowners.

In short, Curbio’s mission is to help home sellers achieve the following goals:

  • Get Homes Ready for the Market
  • Sell Homes Quickly at Optimal Prices
  • Make Money on Their Renovation Investments

Questions About Pre-Sale Renovations

To get you more familiar with pre-sale renovations and Curbio’s services, we provide answers to the following questions that are most important to ask:

What are Pre-Sale Renovations?

Pre-sales renovations are construction projects that are undertaken specifically to get a property sold in a timely fashion, or to increase the value of the sales price prior to listing, or ideally both. In many cases, the projects provide a “facelift” for outdated features, such as an older kitchen or bathroom. The goal is to focus on key areas that will be most important to potential buyers in your market, and that can be completed within your time schedule and on budget.

Pre-sale modifications are inherently risky, as it is virtually impossible to guarantee a positive Return on Investment (ROI) within a short timeframe. Home updates can often be hit or miss, as well, as it can be difficult to anticipate what homebuyers may value most in terms of recent upgrades.

However, an emerging school of thought, with Curbio leading the way, is that carefully chosen renovations, based on data analytics in your specific market, will dramatically increase your chances of not only achieving a positive ROI, but attaining a timely and significantly higher sale. Curbio complements their data analysis by collaborating with local real estate agents to incorporate human context to their findings, which can help interpret market trends based on experience in your area.

Supporting this approach, is market research that revealed a large majority of US homebuyers desire “move-in ready” inventory. Representatives of Curbio have cited research that claims 80% of home buyers desire properties that are move-in ready. Additional research showed a high percentage of US homebuyers are also hesitant to purchase homes that need work. Curbio is aiming to capture part of the $14B made by US home flippers in 2018.  Flippers, who often take advantage of sellers in a bind due to imperfect properties, are further proof that the market continues to demand “move-in ready” inventory.

How Curbio Works: Their Approach to Pre-Sale Renovations

Curbio’s overarching approach is to deliver speed and efficiency by offering an optimized turn-key process. Their services consist of:

  • Quick Proposal Process
  • Preselected Portfolio of Materials
  • Assigned Professional Project Managers
  • Access to Licensed and Insured General Contractors in Each Market
  • Connections to a Network of Vetted Subcontractors
  • Technology Leveraged throughout the Process
    • Curbio App for Project Management and Real-Time Communications
    • 3D Video Capture
    • Advanced Data Analytics
  • Partnership with Local Real Estate Agents

Types of Pre-Sale Renovation Projects Offered by Curbio

Here is a list of the most common renovation projects that Curbio performs:

  • Cosmetic:
    • Flooring; Fixtures; Paint
  • Exterior:
    • Roofing; Landscaping; Siding; Driveways
  • Remodels:
    • Kitchen; Bath; Master Suites
  • Maintenance & Upgrades:
    • HVAC Systems; Electrical Panels; Mold Remediation
  • Property Types:
    • Single Detached Homes; Condos; Townhomes

Types of Projects NOT Offered by Curbio

Here are traits of projects that Curbio WILL NOT perform:

  • Changes to the Existing Internal Layout:
    • No changing floorplans
    • No moving walls
  • Changes to the Existing External Layout:
    • No additions or extensions
  • Installing/Adding Something that Does Not Already Exist in the Home:
    • New systems, features or appliances must be upgrades or replacements
    • No new swimming pools

Example Before-After Photos of Curbio Pre-Sale Home Renovation Projects

Curbio Before-After Kitchen Pre-Sale Renovation

Curbio Before-After Bathroom Pre-Sale Renovation

How Much Should Pre-Sale Renovations Cost

Costs for pre-sale renovations vary depending on the condition of your property. The key is to make sure that your home is on par with comparable properties in your geographic market. In other words, adding high-end luxuries, such as master suite saunas or Viking appliances in your kitchen is not the point of these types of renovations. The general approach should be to provide comparable value and expected features that will be attractive to a larger set of highly desirable prospective buyers in your market.

Another mistake is attempting to make a home “trendy” with an overabundance of “smart home” features that are only of interest to a technology enthusiast. Remember, technology is ephemeral and will be quickly outdated in a short period of time. No real enthusiast will pay for yesterday’s technology.

Since the majority of buyers will want to personalize the home to some degree once they take possession, it is best to leave expensive, luxury extras to the new owner.

Curbio’s Renovation Budget Guidelines

Before deciding which specific renovations to pursue, it is important to first identify a maximum total budget that will likely deliver a positive return on your investment.

Curbio’s guidelines for setting a maximum budget for a profitable pre-sale renovation project is the following:

 [80% of Current Assessed Home Price LESS What You Owe on Your House]

So if your home is valued at $500K and you owe $375K, the maximum recommended renovation budget would be: $25K (i.e. 80% of $500K is $400K. $400K – $375K = $25K).

This conservative approach can compensate for unexpected downward price pressures, as well as preserving additional budget that can cover any unforeseen costs encountered during the process of a project. Though Curbio’s 3D Video technology can catch potential cost setbacks upfront, like mold and termite damage, there is always the possibility for experiencing unplanned costs mid-project. When this happens a Change Order must be signed by the homeowner prior to having the issue resolved.

Curbio has a $15K budget minimum requirement, so homes selling for under $250K will need to hold equity positions of greater than 25% to qualify. Homes selling for $250K and above will need to hold at least 22% in equity, approximately.

Given the key importance of holding sufficient equity to hedge against risk, Curbio’s services are better suited for homeowners who have increased their home’s equity over a longer period of time. Conversely, homeowners who have benefited from a recent, hot real estate market may not need to invest in any major upgrades, as motivated home buyers will be more willing to take on renovations themselves post-sale.

Though Curbio has taken on six-figure remodel projects, their current average project is in the $50K range. The key drivers for determining a pre-sale renovation budget when working with Curbio are: 1) homeowner equity; and 2) local competitive data analytics to identify the most impactful projects for the given property.

When collaborating on the budget and before signing an agreement, homeowners should always keep a worst case scenario in mind: can we afford these renovations and will be happy with them, if we are unable to sell our home within our timeframe?

Curbio does incorporate national and local market data for their pricing estimates to ensure that their proposals are competitively priced. We always recommend getting additional proposals for comparison purposes.

Curbio’s Home Renovation ROI Calculation

Unlike most renovations, where homeowners will live in the home for several years after completion, pre-sale renovations need to consider a quick Return On Investment from the given budget. Curbio’s website contains a lot of useful information on various case studies and not surprisingly, they tout impressive ROI percentages. However, the ROI calculation that they use is incorrect, in our opinion.

Curbio’s Pre-Sale Renovation ROI Calculation:

  • As-Is Price: $315,000
  • Renovation Cost: $34,000
  • Final Sale Price: $372,000
  • Price Increase from As-Is: $57,000 = ($372,000 LESS $315,000)
    • Final Sale Price LESS As-Is Price
  • Curbio ROI: 168% = ($57,000/$34,000)
    • Price Increase DIVIDED BY Renovation Cost

CORRECTED Pre-Sale Renovation ROI Calculation:

  • ROI needs to incorporate Net Profit
  • Net Profit: $23,000 = ($57,000 LESS $34,000)
    • Price Increase LESS Renovation Cost
  • Correct ROI: 68% = (($57,000 LESS $34,000) / $34,000)
    • Net Profit DIVIDED BY Renovation Cost

In other words, Curbio would incorrectly calculate the following scenario as having a 100% return:

  • Renovation Cost: $50,000
  • Price Increase from As-Is: $50,000
  • Curbio ROI: 100% = ($50,000 / $50,000)
    • $50,000 was spent on renovations that increased the final sale by only $50,000
  • However, the true return would be 0%:
    • Net Profit: $0 = ($50,000 LESS $50,000)
    • Correct ROI: 0% = ($0 / $50,000)

When interpreting their stated ROI figures you can simply subtract 100% from their number, i.e.: a Curbio 168% ROI is really a 68% return. The adjusted ROI numbers are still impressive, especially when considering that they are over a very short time period. In our opinion their numbers are unnecessarily misleading and we feel that they should be more concerned about accuracy. It may make you wonder: if they get this calculation wrong, will they miscommunicate other important estimates or terms, as well?

How Long Should Pre-Sale Renovations Take?

Going back to our scenario of the homeowner who must uproot the family and begin anew in another state, ask yourself: what time would you have in your schedule to manage the process of updating your home? You work more than a 40-hour week, weekends are full of activities and you may not know where to begin to find a quality, honest contractor to get the process started. Furthermore, there is time pressure to begin the new job and to begin a search for a new home in another state. When will you have enough hours in a day to fulfill all that needs to be done?

With these time pressures, pre-sale renovations need to be prioritized and planned in terms of weeks and not months. Curbio understands this and has focused their services to be highly efficient, repeatable and reliable. Curbio states that they complete renovation projects 60% faster than the average contractor. Experience, technology and access to talent are really important in this area, which speed up processes and eliminate delays.

Once a contract is executed, a Curbio Project Manager (PM) will contact you to begin work in your home within 5-7 days. Curbio PM’s are employees, so they will all be experts in Curbio’s processes and tools. Most projects are completed within a 3 to 8 week timeframe, in order to make sure the house gets on the market in a timely fashion.

All project tasks are handled by the Curbio PM, including materials ordering, delivery scheduling, and subcontractor management. Once the project begins, your PM has all the information needed to complete the project, with very little effort required by the homeowner. Real-time updates are provided by the PM via notes, photos and videos to keep the homeowner informed throughout the project, as well.

Curbio Pre-Sale Renovation App Screenshot

What is It Like to Work with Curbio?

So how does Curbio’s service work and is it a good deal for the homeowner, realtor or buyer?

Curbio only contracts with homeowners who are represented by real estate professionals. If you are a homeowner looking to sell your home without an agent (FSBO: For Sale By Owner), Curbio will not work with you. If you already have an agent in an existing Curbio market, real estate agents can sign up for recurring webinars on Curbio’s website to learn more.

Curbio’s pre-sale renovation process consists of the following steps:

  • Request an Estimate
    • Homeowner needs to talk with an agent first
    • Agent needs to provide address and property details to Curbio
    • Curbio will call back to schedule a virtual tour
  • Conduct Virtual Tour
    • A Curbio Home Improvement Consultant does a virtual walkthrough to record dimensions & measurements, and captures a 3D video tour of the property
    • The 3D tour typically takes between 1 and 2 hours
    • The video is shared with a team at Curbio’s headquarters, who conducts analysis on the home and the local market
  • Curbio Confirms if Your Property and Situation Meets Their Requirements
  • Homeowner Receives Proposal from Curbio
    • Completed without needing to send a contractor on-site
    • Project details are itemized
  • Homeowner Does Due Diligence (Purgula Advice)
    • Homeowner gets any and all questions answered
    • Homeowner should do “worst case” scenario of not selling the property and paying for all renovations in full (i.e. confirm details of the buyout clause)
    • Homeowner should create pricing schedule that contains the continual 30-day 2% price reduction to identify when you should execute the buyout clause
    • Read Pre-Sale Renovations: What to Consider
    • Homeowners should ask how liability for Curbio renovations transfers post-sale
    • Homeowners should confirm when the 1-year warranty begins: at the completion of work; at settlement; or when buyout is executed
  • Finalize Project Plans
    • Homeowner, Real Estate Agent and Curbio Team Collaborate and Finalize Project Scope
  • Sign Contract
    • Homeowner needs to confirm buyout amount and timing before signing
    • Homeowner needs to confirm “right-to-walkway” timeframe once contract is signed
    • Homeowner needs to confirm active licenses for GC and all subcontractors
  • Manage Project
    • Project starts within 5 to 7 days of a signed contract
    • Project typically takes between 3 to 8 weeks
  • List Property
    • Property must be listed within 5-days of the renovations being completed
    • Property price will be reduced by 2% after each 30-day period it goes unsold
  • Pay Curbio at Closing
    • The title company will pay Curbio from the proceeds of the sale
  • Transfer Warranty
    • The 1-year warranty associated with Curbio’s work is transferred to the new homeowners

Curbio Uses Technology to Assess Your Home

Curbio 3D Virtual Walkthrough Model Pre Sale Renovation

Once contacted by your real-estate professional, Curbio will dispatch a video technician to capture a high-resolution 3D video of your property, then walk through your home with you. This process is a way for the company to capture all of the requisite information on your home without being obtrusive with a number of technicians taking measurements throughout the property. For busy homeowners, this is a highly appealing feature to be able to schedule just one on-site meeting in order to gather all necessary site data.

This virtual video will also allow Curbio to make an assessment on which renovations will return the most value based on a number of analytical algorithms that take various comparable data into consideration.

Curbio Remediation Proposal

Based on the results of the virtual walk through, Curbio will send a remediation proposal to you accompanied by a contract for their services. Once again, the process takes your time and availability into consideration, as you may sign your contract via DocuSign in the comfort of your home or office.

After the contract is fully executed, a Deed of Trust is filed, which is basically insurance using your home as collateral, to guarantee that Curbio will be paid for the renovation work after the property is sold.

Dedicated Project Manager

As previously mentioned, once a contract is executed, a Curbio Project Manager (PM) will contact you to begin work in your home within a week. The short timeframe of 3 to 8 weeks is standard and serves to get your property listed in the shortest amount of time. All tasks are handled by the Curbio PM, including materials ordering, delivery scheduling, and subcontractor management.

Curbio is paid for the work from the proceeds of the home sale at settlement.

Benefits to Curbio Customers (Homeowners)

  • No upfront costs (payment at settlement)
  • Reduced stress and uncertainty
  • Elimination of unnecessary improvements
  • Combined expertise of Curbio and local real estate agent
  • Competitive Advantage against other home sellers that cannot afford improvements
  • Increased perception of quality with being a Curbio “certified” property
  • Efficient project management by Curbio
  • No need to vet or hire contractors
  • Reduced renovation time
  • Leverage market analytics to decide best renovations to perform for maximum ROI
  • Availability of Curbio’s network of contractors
  • Can help homeowners that at are stuck due to insufficient funds and time to renovate
  • Increase value and make it sellable
  • Buyout protection if you change your mind about selling or if the home’s asking price declines too much
  • Low ball offers will be virtually eliminated
  • Decreased likelihood of large price reductions

Risks to Homeowners

  • Mandatory 2% price reduction every 30-days
  • No guarantee that the home will sell by a specific date
  • You will have to pay for and live with any renovations done by Curbio, if you execute the buyout clause due to being unable to sell your property quickly enough
  • Renovations may not be necessary during a buyer’s market
  • Renovations will push out your listing date
  • Potential return on investment may not be as important to the homeowner as a quicker “As-Is” sale

Curbio Pre-Sale Renovation Project Requirements

Since Curbio’s goal is to return a positive ROI to homeowners, they cannot accept all properties that may need their help. Just as the homeowner will need to vet Curbio’s offerings, Curbio, in turn, has to do their due diligence to ensure that they can deliver on their promise. However, they have no minimum income or credit requirements, and do not require any payment prior to settlement. The most important criteria is the homeowner’s total equity.

Curbio’s general project requirements include:

  • Homeowner must be ready to sell and have a licensed real estate agent
  • The project budget must be at least $15,000
  • The estimated ROI of a given property must meet their minimal investment requirements
  • Homeowner must have sufficient equity to cover the cost of the renovation
  • The homeowner must agree to lower the asking price by 2% every 30 days, while the property is listed and remains unsold
  • If the homeowner wishes to terminate the contract, they must pay Curbio directly the full cost of the renovations (buyout clause)
  • Property must be listed within 5 business days upon completion of project
  • Lien is placed on the home until payment at closing or buyout is executed
  • The payment amount to Curbio is a fixed fee derived from the associated project and materials and is not correlated to the final sales price of the given property

Markets that Curbio Currently Serves

Curbio’s services are currently available in the following US metro areas, generally working within a 40 to 50 mile radius of each market:

  • Atlanta
  • Austin
  • Baltimore
  • Boston
  • Chicago
  • Dallas-Fort Worth
  • Denver
  • Houston
  • Los Angeles-Anaheim
  • Miami-Fort Lauderdale-Palm Beach
  • Minneapolis-St. Paul
  • Orlando
  • Philadelphia
  • Phoenix
  • Pittsburgh
  • Portland
  • Riverside
  • San Antonio
  • San Francisco-San Jose
  • Seattle
  • Tampa
  • Washington, DC-Northern Virginia

The green circles in the map below indicate confirmed markets that Curbio will be entering next.

Curbio Markets in US as of March 2020

Curbio has been steadily launching in new markets, so if you do not see your market listed, we recommend checking Curbio’s website and reaching out to them. The company plans to be available in 25 cities by the end of 2020. They are currently live in 22 metro areas. Over the next several months they may be launching in the following markets:

  • Charlotte
  • Las Vegas
  • New York City

Curbio Real Estate Partners

Curbio has established corporate partnerships with some of the largest firms in the US real estate market, including: @properties; Baird & Warner; Berkshire Hathaway PenFed Realty; BHGRE Metro Brokers; Coldwell Banker Bain; Door.com; Ebby Halliday; and LoKation. A key component of these partnerships is to provide educational and marketing support for each firm’s agents in the field. The company has also worked directly with most major real estate brokerages, including: Century 21; Coldwell Banker; Compass; Keller Williams; Long & Foster; Pearson Smith; Redfin; RE/MAX; and Weichert.

Additional Questions for Homeowners to Ask if Considering Curbio

Though we respect Curbio’s capabilities and believe that they are effectively addressing a vital need within home improvement and real estate, there are a few issues that we recommend that you thoroughly address prior to entering into an agreement with them or other similar firms.

Considering the importance and challenge of selling a home at the right price and at the right time, it is imperative to understand upfront all of the things that could unexpectedly go wrong and how they would be handled. Specifically, markets can change quickly and unpredictably, so like with any contract, be sure to understand your options and build in protection and plans for unexpected situations.

1. What happens if my property doesn’t sell?

Curbio’s website optimistically states “all homes will eventually sell and we’ll wait as long as it takes to get paid”. While they have no time limit, they do require that the list price of your home be reduced by 2% each 30-day period that your property does not sell. It is vitally important that the homeowner create a financial model around worst case scenarios to identify how long you should list your property under this required price reduction schedule.

Keep in mind that a monthly 2% price reduction will grow to be a 20% reduction at the 12th month of listing, when compared to the original listing price. UPDATE: Regarding the mandatory price reduction, Curbio’s CEO, Rick Rudman, posted this comment on Reddit in early 2020:

We recently changed our 2% per month price reduction requirement to something much more flexible

Be sure to get clarification on this policy prior to signing an agreement.

Curbio does have a buyout clause, which enables the homeowner to exit the agreement by paying for the full cost of the renovations, within 30 days. However, be sure to understand the details around this clause, like if there are any restrictions on when it can be executed and how payments can be made.

2. How is Curbio different than concierge services offered by brokerages?

As the popularity of pre-sale renovation services has grown, more real estate brokerage firms have begun offering “concierge” services. Concierge services generally imply that, at a minimum, renovation costs will be deferred until settlement. While Curbio will always manage and complete your renovation, you will need to confirm what additional support a concierge service will provide besides covering costs upfront⁠. For example, some concierge offerings may solely cover upfront costs, requiring the homeowner to manage the corresponding improvements.

3. Does the homeowner get to choose the room, materials or design of the rooms or areas that Curbio elects to renovate? Is this a true collaborative effort?

Curbio does take input from both the homeowner and real estate agent. However, Curbio states that they will be the ultimate decision-maker. Regardless, we believe that input from the home seller is vitally important as homeowners know the strengths and weaknesses of actually living in the space for an extended period. Most importantly, time-tested homeowner insights can prevent ill-advised decisions uniquely pertinent to a given household.

It is also important to protect yourself against worst case scenarios, so we recommend staying involved with project decisions, on the outside chance that you will end up living with these renovations. Be sure to understand how decisions and material selections are made before signing an agreement. For example, does Curbio offer a subset of colors and materials from which the homeowner can make the final selection?

4. Does Curbio take a cut of the increase in sales price or are they just marking up their renovation services and charging for those?

Curbio charges a fixed fee based on an itemized project list. They also state on their website that there are no other fees. However, you should be sure to confirm that there are no other contingency fees for any unusual circumstances. For example, are there ever any change orders? Can the cost of materials change due to availability issues? If a property lists longer than expected, can follow-up projects be initiated?

5. Is Curbio simply a remodeling company with a different sales model?

In our opinion, yes, Curbio is a special kind of remodeling company that is leveraging technology to address challenging market needs within the real estate industry. Like any remodeling company, a key to their continued success will be the quality of their work and personnel. Besides their partnership with real estate agents, we believe that they will simultaneously need to be an employer of choice to attract and retain the best contractors in their markets, in the long term. Eventually their growth may become hindered by a lack of quality workers to hire as their general contractors and project managers.

However, we would encourage them to license their technology as another revenue stream and growth driver. The industry could definitely benefit from an injection of efficiency and reliability. They should also consider a franchise model with highly demanding professional requirements, as well.

6. How do I know if a Pre-Sale Renovation Agreement is right for me?

Here are tips we put together to help homeowners decide if Pre-Sale Home Renovations are a good fit for them: Pre-Sale Renovations: What to Consider.

What are My Options Besides Pre-Sale Renovations?

If you have time to test the market, you can try minimal home prepping. Here are some proven tips from an experienced realtor:

If you want to skip the entire prepping and staging process altogether, perhaps due to tight timing requirements, you can look into “iBuyer” firms. Though iBuyers are different in their approach, they are technically competitors to Curbio, as they are often competing for the same customers as Curbio. iBuyers are companies that will buy your home outright, and assume the risk of doing any additional modifications necessary for a final sale to the ultimate occupant.

Here are a few examples of iBuyer companies: Opendoor; Zillow Offers; Offerpad; Knock; and RedfinNow. What you gain in convenience and time savings, you will likely sacrifice on your final sales price. Our recommended approach is to consider all possibilities. By researching and assessing multiple options, you will likely make the best choice for your situation and be more confident in that decision.

Regardless of which paths you explore, we definitely recommend getting the advice of a knowledgeable real estate agent in your local market. Keep in mind that there may be some really good agents that may not be aware of Curbio, so please encourage them to learn more about them on your behalf.

You may also encounter some agents who may be resistant to pre-sale renovations, as they may incorrectly assume that you are expecting them to cover the upfront costs. In this case, tell them that the power of Curbio’s offerings are threefold:

  • Collaboration with homeowners and local agents;
  • Expert project planning, management and implementation; and
  • Deferred payment until closing.

Articles Related to Pre-Sale Renovations

Pre-Sale Home Renovations: What to Consider
Cost-Effective Alternatives for Prepping Your Home for Sale
How to Make Homebuyers Want Your Home in the First 8 Seconds
Budgeting for a Home Renovation Project

More Information on Curbio

Curbio Website
Curbio Free Estimate Form
Curbio Completed Project Gallery
Curbio Current Project Gallery
Curbio Resources for Real Estate Agents
Curbio Compared to Concierge Services
What’s It Like to Work with Curbio? (Video)

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