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Out with the old, in with the new: That, in simple terms, is Clay Woodard’s business.


Woodard, co-founder of Move-Up America, works with home builders to provide assurance that prospective new-home buyers who own existing homes are financially able to sell those homes and purchase their new-built home on schedule. Move-Up America contracts with real estate brokers who accept a discounted commission to help sell the potential new-home buyers’ existing homes.


It’s a breed of business known as home buyer contingency management.


“We’re pretty unique. I haven’t seen too many companies doing what we’re doing,” Woodard said.


Woodard, a licensed broker and a former sales counselor for home builders, and John Horton, a former sales manager for a builder, established Move-Up America in 1994. The company is based in Austin, Texas, and also provides services in Houston, Dallas, Fort Worth, and San Antonio, Texas, as well as Atlanta, Ga., Charlotte, N.C., and Tampa, Fla.


The company offers home buyers rebates as an incentive to participate in the program, with rebates reaching as high as $15,000. Earlier this month Move-Up America announced it had reached the $10-million milestone in rebates spread among 1,947 home buyers. That amounts to an average rebate of $5,136.


Move-Up America’s niche is indicative of the large inventory of new homes and the competitive climate among builders in some regions. The timeliness of an existing-home sale can make or break the purchase of a new home, particularly in strong buyer’s markets, where new-home buyers may experience difficulty selling their current home. Move-Up America’s business model demonstrates that home builders are willing to get involved in the sale of the buyer’s existing home to guarantee the new-home purchase.


Move-Up America last year helped to close about 800 transactions that involved the sale of an existing home and the purchase of a new home. The company has a 95 percent success rate in closing transactions, Woodard said.


Move-Up America works with brokers at a number of different companies, offering them commissions of 1.5 percent to help sell existing homes for prospective buyers of new homes. Agents who represent the buyers of the existing home typically are offered a 3 percent commission, for a total commission cost of 4.5 percent. Move-Up America takes in 3 percent of the cost of the new home purchase and reimburses the new-home buyers 3 percent of the resale cost of their existing home.


Woodard said Move-Up America’s success is in the volume of transactions.


“You are not getting rich on each deal,” he said. “You have to do a pretty good amount of volume.”


The company tends to work with builders of large residential developments that construct more than 100 units per year. Ryland Homes is one of the biggest customers. Others include Beazer Homes, Morrison Homes and Wilshire Homes, according to Woodard.


Brokers at first didn’t react favorably to Move-Up America business plan, Woodard said.


“When we first started out (the feedback) was very negative. Of course they don’t like anybody reducing commissions. The first two-to-three years I was doing this, I used to get a call every day” from a realty broker questioning the business strategy, he added. “Now it has become an accepted business practice, or (brokers) have accepted the fact we’re going to do it anyway.”


Home sellers interested in a new-home purchase can’t qualify for Move-Up America unless they aren’t already working with their own realty salesperson. Instead, Move-Up America assigns an agent to help the prospective home buyer sell the current home.


“We find good agents from different companies and we send the referrals to them,” Woodard explained.


Move-Up America gets involved in the process at an early stage. The company tracks home buyers’ progress in selling their current homes and provides regular reports to builders about that progress. Move-Up America staff keep in regular communication with the sales agent to get updates on the existing home sales.


Woodard said this “hands-on approach” is part of Move-Up America’s success.


“What we want to do for builders is sniff out any potential problems. We keep the builders informed with a weekly report on the status of each (for-sale home) listing. We are kind of the builders’ eyes on the real estate market. We’re their resource,” he said.


If there is any sign that the prospective home buyer is having trouble with the home sale and lacks the financing to purchase the new home, Move-Up America can alert the builder to cancel the new-home purchase contract. This decision typically must be made 90-120 days into the home sale process and before the sheetrock phase of construction is completed, Woodard said.


The strong buyer’s market in Texas and in other areas, and high levels of home inventory are feeding fierce competition among builders, Woodard noted. He hopes will translate into a greater demand for Move-Up America’s services.


“We’ve carved a niche in doing what a lot of real estate agents don’t do,” he said–working on behalf of both the builders and the buyers.


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