Home Staging Helps Move Inventory
As the number of nonperforming assets being acquired by asset management companies continues to grow, staging services are being sought after to boost property sales. Asset managers are telling the Realtors they work with in local markets to go in and do staging on real estate-owned properties because many of these homes can benefit from interior and exterior improvements. Bertone Home Staging, Miami, has been working with asset management and relocation companies, servicing them through the entire state of Florida, from Miami to Orlando to Tampa. The company recently added Atlanta to its coverage area and is in the process of expanding to other states. Angelina Perez, president and CEO of Bertone Home Staging, which recently opened up a real estate division, says the concept of using home staging to move inventory is really catching on industry wide.
“We are seeing Realtors do 15 to 18 price reductions at $5,000 per time, and that really doesn’t work,” says Ms. Perez. “They are figuring out there has to be a formula, because we are in a declining market, that will allow X company to stand out from all the others. We have 70 to 80 asset management companies and a zillion banks out there. It’s not competitive for them.” 406 Partners, an asset management company based in Salt Lake City, first began working with Bertone Home Staging back in early 2008 to service their properties throughout Florida.“Although we are an out-of-state company and have primarily conducted our work with Bertone via e-mail, they have always made us feel at ease with their reliability,” said Haly Thurgood, real estate support manager at 406 Partners. “The company has proven time and time again, that they can be relied upon to deliver a comprehensive design.” p>Ms. Perez is being proactive and reaching out to Realtors via e-mail and by telephone to build relationships. She says some Realtors are shying away from staging, because they think the price will have to be raised by $10,000 or $20,000 per property in order to sell. “That isn’t the case. I am trying to make them understand that staging is going to work. The client wants to know what they have to invest to move this property. The head of the asset management company is telling them, if you feel it needs it, we’ll do it. It’s almost like saying, ‘If you need a facelift, we’re going to pay for it.’ How do you turn that down?”
Until Realtors sell that property, they will not get their commission, Ms. Perez adds. “They just want to have the client lower the price because it’s not selling. They are so emphatic that it’s only price-driven. They want to keep lowering the price, that’s the one thing the client doesn’t want to do.”
Asset managers and REO Realtors need to look for inexpensive alternatives like home staging, instead of lowering the price of the REO another $20,000. “If we spend $5,000 for staging, wow! At this point, because the market is so price sensitive, clients often ask us, ‘Should we raise the price?’ Our answer is always, ‘Absolutely no.’ It’s about moving the home. One Realtor I know took our advice and sold the property in three weeks. Can you imagine how happy her client was? Because three months or six months later, that property is worth a lot less. We are still in a declining market and we hear that over and over again. Here in Florida, we have a three-month window. We have to look a how to do something significant.”
This REO property, located in West Palm Beach, sat vacant on the market for six months. BHS staged it it was under contract within three weeks. Before, the living room was a large, open and undefined area with extra space.
After staging, it showed perfectly with a standard size round dining table.
In a situation like that, the solution would be to easily and inexpensively attach a nice bamboo fence along the existing one, put some patio furniture outside and no one would ever have to look at that neighbors’ mess again, she adds. “This particular property had been on the market for six months and had had multiple price reductions, which is really a shame because it would have taken such a small investment to eliminate the problem. It’s simple tricks of the trade that we have and we know how to do. That’s why staging is so valuable.”
It’s about applying the most inexpensive lipstick possible, says Ms. Perez. “We don’t do plastic surgery. We do lipstick. Sometimes it doesn’t require painting the entire inside of the house. Maybe we only have two walls that really are the standout purple and blue because it’s the kids’ room. For whatever reason, sometimes clients think, just paint the whole thing. You don’t have to. It would be $200 per room. It’s about spending the least amount of dollars,” she said.