Brown Harris Stevens is debuting a suite of lending programs to front cash to its brokers’ clients.
Programs the firm announced Tuesday include a pre-market home improvement and staging service for sellers called Curate and a bridge-lending option for buyers who would otherwise have to sell their current home before buying.
The company said the services would launch in all its markets this month. The debut comes as some lenders are balking at providing loans particularly in dense urban markets such as New York City.
In the first months of the pandemic, rival brokerage Compass scaled back similar lending programs before restarting them in the summer with a few caveats, such as suspending agents from the services if two or more clients failed to list or repay the funds.
Matt Leone, BHS’ head of business development, said this was the right moment for the new lending services because sellers needed help in this “economically challenging time.”
“[It] allows our clients to have more options,” he said.
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Leone noted that the expansion was in the works prior to the pandemic at the request of agents, but that it took time to find the right partner. That partner is concierge platform Zoom Casa and its lending partners.
Notably, BHS’ bridge lending will have the capacity to offer buyers credit up to $25 million at interest rates averaging around 6.5 percent. Zoom Casa will facilitate these loans from other lenders, Leone explained. He said the roster of lenders behind the bridge loans is still being finalized.
For projects such as renovating kitchens, installing flooring, painting and decluttering, BHS’ Curate will cover the costs, vendor selection and project management of pre-market improvements through Zoom Casa’s platform.
Both lending programs will be available to clients who sign an exclusive agreement with BHS agents. For sellers who opt to use Curate, the loan will be due upon the termination of the exclusive listing agreement with BHS agents.
Compass’ lending programs launched in 2018 with a home-improvement service called Concierge that covered sellers’ staging costs and recouped funds when the home sold. Last year it began offering bridge loans to sellers.
Those services have been a boon for the brokerage’s recruiting. Last summer, major BHS producer Rachel Glazer moved to Compass, citing its Concierge program as a big factor.
“No other brokerage offers anything like that,” she said at the time.
Compass said that Concierge was used on 17.5 percent of its listings last year and agents who use the program increase their listings by 47 percent, on average, over three months.
Until now, Compass was the only brokerage in New York City offering lending to its agents’ clients, but nationally a growing number of brokerages are launching bridge loan programs. The rationale is that the service allows buyers to purchase a home before their old one sells, making them more competitive buyers.
When asked whether BHS launched its lending programs as a way of retaining agents in the city, Leone said, “I think everything we do is a recruiting and retention tool. … I call it doing your job.”
“We’re doing it solely because agents have said it’s important,” he said.