Surprising Obstacle to Virtual Staging

Not So Virtual "Virtual Staging"

So, what's holding up virtual staging? (see also, "Virtual Staging: Ready for Prime Time?")

Not Realtors, who by and large are game (even if they have to dig a little deeper into their pockets to do it).

Not clients, who stand to save a small fortune on actual staging costs.

And not local Boards of Realtors, who as best I can tell are behind the curve addressing the issue -- but have hardly forbidden the practice.

Give up?

The virtual staging companies themselves.

(Legal) Boulders in Road

I'm in the process of doing virtual staging for the first time, and was eagerly awaiting a phone call from the (Atlanta-based) vendor, who contacted me Monday.

"Can you give me an idea what would you like the rooms to look like?," he asked.

By way of introduction, I explained that the home has a traditional look and formal floor plan, so therefore the furniture choices and arrangement should reflect that.

However, my highest priority -- and the reason I was popping for virtual staging -- was to be able to show prospective Buyers how the house would look without the dated, loud wallpaper -- and with the oak hardwood floors uncovered (now obscured by equally loud, decades-old carpeting).

"Check on the furniture, but can't change the flooring or wallpaper," the virtual stager told me flatly.

Litigation Risk -- And How to Avoid It

"Huh?!?," I said incredulously.

Due to litigation risk, he explained, the company's policy is not to alter a room's physical attributes, only to show how it would look with furniture and accessories added.

For a virtual staging company, isn't that like tying 1 3/4 arms behind your back?

Or, as Henry Ford might say, "you can have any color Model T, as long as it's black."

"One Size Fits All" Policy, For Now

I proceeded to explain that I am a former lawyer, and had no intention of using the staged photos in a misleading or deceptive fashion; or getting myself, my broker -- or them -- sued.

Specifically, I said that I would:

a) stipulate that I would not use the photos online or in MLS marketing materials, but only as "blow-ups" that I would display, physically, in each of the rooms, to contrast the "Before" and potential "After" appearance;

b) understood that each of the blown-up photos would be stamped with a conspicuous "virtually staged" disclaimer; and

c) would present prospective Buyers and their agents with a written acknowledgement for them to sign before entering the home and doing a showing.

What Buyer could claim that they'd been deceived after complying with all that?

"No go," came the quick answer.

Clearly, the virtual staging companies are risk-averse, and don't want to be in the business of policing how Realtors use their photos once their computer whizzes (electronically) ship the photos out the door.

I get that.

But by declaring the best applications off-limits -- at least for now -- the virtual staging companies are very much undermining demand for their services.

Cort Furniture Sale

"Mark Your Calendar"

If you're looking for decent furniture, cheap, Cort Furniture's annual sale is Sept. 16-18.

Cort, well-known to stagers and Realtors for their rental furniture, is less well-known as a place to buy used furniture at a terrific price.

Is This Seller Telegraphing Something??

Subliminal Seller Messages

Yes, it's a tough market for Home Sellers.

And it's good staging technique to create clusters of three over fireplace mantles and other focal points.

Still, I'm not sure that the listing agent -- or their client -- fully appreciated the (subliminal?) message they appear to be sending in the photo above.

Why I Call My Front Desk at 2:45 p.m Sunday

Gauging Open House Traffic

I don't know about other Realtors, but whenever I host a Sunday open house (I've been doing Sat./Sun. double-headers lately), I like to call my front desk to find out how busy it's been.

So, I try to check in around 2:45 p.m., before my front desk closes at 3 p.m.

Here's how I'd characterize the possibilities, from most to least busy:

"Jumping"

"Busy"

"Steady"

"Slow"

"Dead"

For the record, yesterday's activity was somewhere between "Slow" and "Dead" -- about par for a hot, late Summer day.

Which is still important to know, because it's one more piece of information about how the market perceives your client's property.

Establishing a Baseline

Obviously, the best combination is to have non-stop traffic on an otherwise slow day.

And any one open house hardly makes for a statistically valid sample. (First open's typically draw disproportionate, "neighbor-heavy" crowds; ditto for an open house after a long interval without.)

However, if your open houses are consistently moribund when it's busy elsewhere, it's a (loud) signal that something needs addressing.

If the home has been well-staged, photographed, networked, and marketed . . . that "something" is often price.

P.S.: And no, that's not the City Lakes' front desk pictured above -- it's a stock photo I found online.

Staging & "Critical Mass"

Are More Sellers Staging Today?

It sure seems that way.

No doubt, that's because every $1 spent on staging can easily add $3 (or $10) to the value of a home.

And because, in a Buyer's market, there are lots of competing homes for sale, and to attract a Buyer homes have to look their best.

Virtuous Cycle

But therein lies another reason why staging is becoming standard practice: once enough homes begin to stage -- call it a majority -- the remainder have to stage, too, or suffer by comparison.

So, pretty quickly the % of homes at least minimally staged jumps from 50% to 90% or higher (excluding foreclosures and what I'll call "pure" estate sales).

P.S.: I inherited my Dad's corny sense of humor. I can just hear him saying, "virtuous cycle?? Isn't that like a Schwinn?"

Making Lemons out of Lemonade

Staging Props -- Summer Edition

One of the challenges in staging is coming up with props with good visuals that also have a long "shelf life."

So, fresh flowers pass the first test -- but not the second.

Silk flowers pass the second -- but (often) not the first (at least not once you stop to smell and touch them).

Which is why the staging prop I saw this morning in a Country Club home on the market was so inspired: in the middle of the Kitchen table was a pitcher filled not with lemonade, but a half dozen or so fresh lemons!

Brilliant!

Home Sellers Who Shoot Themselves in the Foot

Unforced Errors

Given that home sellers typically want (need) to maximize what they net on the sale of their home, you'd think that they'd do everything in their power to increase the odds of that happening.

But they don't.

On the contrary, they often shoot themselves in the foot not one but multiple ways.

Here's a partial list:

--Mis-pricing
--Failing to do cost-effective repairs
--Not staging
--Hiring the wrong Realtor (or none at all)

A subset of "hiring the wrong Realtor" would be "insisting on a too-short listing contract."

That's because good Realtors invest most of their time and money selling a property at the beginning of a listing.

That's when they work with the owner on staging, market prep, and required disclosures and municipal inspections; oversee photography and drafting (and proofing, and proofing) the marketing materials, both print and online; and network the upcoming listing to other Realtors and the public.

Recipe for Failure

So guess what happens when a client insists on a 60 day listing (vs. a more realistic six months-plus) for a $500k house in the Twin Cities?

Most Realtors would decline, because they know the odds of collecting a commission -- and therefore covering their expenses and making a living -- are unacceptably low.

Too often, the Realtor who will take a listing on such a client's unreasonable terms protects them self, financially and time-wise, by not doing all the things needed to sell a home in today's Buyers' market.

So guess what happens next?

The Realtor does next to nothing to market the home.

The 60 days come and go.

And the owner is on to Realtor #2 (or #3 or #4) who, if they're honest, will tell the client that they now need to discount the asking price of their home to overcome their "false start" and re-attract prospective Buyers.

"How Long Will My House Take to Sell?"

The Second Most Popular Question in Real Estate

What's the second most popular question in real estate? (the first being, "what's my home worth?")

"How long will it take to sell my home?"

Unless the Realtor is going to buy it, the honest answer is, "I don't know."

However, it is possible to give the owner an estimated range, based on the following four, inter-connected variables:

One. Price.

The higher, the longer.

Locally, for example, there is currently a two year supply of $1 million-plus homes for sale in Edina.

If you are contemplating selling one . . . that's how long you can expect to be on the market.

By contrast, smaller, more affordable homes in popular Twin Cities neighborhoods like Linden Hills and Fern Hill take an average of 3-4 months to sell now.

Lately, homes under $250k or so in particular tend to sell fastest because they appeal to first-time home Buyers, who by definition don't have to sell another home in order to buy.

Two. Condition and updating needs.

As I've blogged previously, homes that require major updating (over $100k) have been tough sells in today's market because Buyers have to have that money in reserve.

Cheap mortgages -- and they're now well under 5% -- don't make it any cheaper, or easier, to tackle a major remodel.

Three. Relative Value.

Homes that are well-priced, staged, and marketed relative to their peers sell faster.

Always have, always will.

Four. Broad or narrow appeal, or, "the quirky factor."

Yes, it's true that "all real estate is unique" -- but some real estate is more unique than others.

It's also the case that there's "good unique" and "bad unique."

So, views of the Minneapolis skyline from the west side of Lake Calhoun would be an example of the former.

A home with an odd floor plan and a hodgepodge of architectural styles, the latter.

The common denominator in all four of the above variables is, how broad or narrow is the potential pool of Buyers for the home in question?

As a general rule, the broader and deeper the pool of prospective Buyers . . . the shorter the market time.

Now THAT's Staging

Want an example of a beautifully staged and photographed room?

You're looking at it!

The shot is from the entry at 2710 Mayflower (list price: $475k) in Minnetonka; Karen Antone from the Edina Realty City Lakes office has the listing.

Staging: Make-up . . . for Homes

Making the Most of What's Available

A rose is a rose is a rose.

--Gertrude Stein

Question: When is a chair not a chair?
Answer: When it's a prop.

Home stagers view furniture, framed pictures, rugs and various other objets d'art not as things in themselves -- but in terms of what they do for the room they're in.

So, what counts isn't the pedigree or provenance of a particular painting or piece of furniture (nice alliteration, huh?).

Rather, it's whether the item accentuates the room's size, natural light, and focal points (like a fireplace) -- or softens the room's negatives (like being too small or dark).

In turn, that often depends on the object's size, shape and color more than its craftsmanship or aesthetic value.

In fact, good stagers excel at using what's already available to them in the home.

That avoids the home owner having to go out and rent expensive props to accomplish the same thing.

P.S.: a good parallel for staging decisions is picking a stylish pair of eyeglasses. The right frame isn't necessarily the most expensive one -- but the one that shows off the person's best features.

Is a Vacant Home "Too Available?"

Understanding Home Buyer Psychology

It's human nature to want what everyone else wants. Likewise, it's also human nature to not want what everyone else is foresaking.

So, if a happy, bustling household is the real estate equivalent of the popular girl -- or guy -- everyone wants to go out with in high school, what is a vacant, unstaged home?

The wallflower in the corner.

Forlorn and (too) available -- one might even say a bit desperate-looking.

Staging's Role

What Realtors know -- but home Buyers can forget -- is that a relative pittance spent on staging (new paint, carpeting, optimally deployed furniture, rugs and wall art, etc.) can transform the barest of homes into a showcase.

Still, it's the "showcase" most Buyers prefer -- and want to buy -- even if the forlorn home is the better deal.

The lesson for would-be Sellers?

Show -- don't tell -- prospective Buyers what your home can look like at its best.

Twin Cities Market Snapshot -- March, 2010

Today's Buyers: Looking for (Affordable) Cream Puffs

My quick "snapshot" on the Twin Cities housing market as of St. Patrick's Day, 2010?

It continues to be a schizophrenic market, in which the lower end -- defined as under $200k for single family detached -- is selling (too?) briskly, and values are hard to find.

I attribute that to: 1) tax incentives (due to expire April 30) that loom larger for entry-level homes; 2) a preponderance of first-time Buyers unencumbered by existing homes they have to sell; and 3) a pronounced drop in bank foreclosures (down more than 50% locally the last six months).

Meanwhile, upper bracket homes (say, $800k and above) continue to languish, and are being aggressively discounted to move.

Two Contests: Pricing & Beauty

Another phenomenon of this market: Buyers are looking for "cream puff's"; that is, homes in mint -- or at least move-in -- condition that show great . . . and are priced great.

Or as Edina agent Jonathan Spar puts it, would-be Sellers in today's market have to win two contests: a pricing contest, and a beauty contest.

Perhaps that's why I'm seeing more listings that have been sitting, unsold, "re-debut" on the market touting the fact that they are "newly staged" (often with a price reduction, for added "oomph").

That's a tacit acknowledgement that they weren't so beautiful before -- but now they are!

P.S.: sometimes I wonder whether Buyers who fall in love with a home realize that they're buying the home, not the staging!

Is a Vacant Home "Poorly Staged?"

Adding (Feedback) Insult to Injury

[Editor's Note: thanks to fellow City Lakes agent Sheri Fine for serving as a sounding board on this post.]

Is a vacant home "poorly staged?"

Judging by how most Buyer's agents complete showing feedback forms, the answer would be "yes."

But they're wrong.

In fact, a vacant home isn't staged at all.

Saying otherwise is a sure way to annoy Listing Agents, because: a) they're already quite aware that the home isn't staged; 2) it almost certainly wasn't their druthers (unstaged homes typically don't show well, and homes that don't show well . . . are harder to sell).

Adding (feedback) insult to injury, assuming the homeowner is getting feedback directly: the listing agent must now explain to their client why other Realtors seem to be saying that they're doing a poor job.

"Avatar" Meets the Housing Market

Is Virtual Staging "the Next Big Thing?"

The "next big thing" in real estate likely has nothing to do with "social media" (Facebook, LinkedIn, etc.).

Rather, my guess is that it's "virtual staging" -- using software to simulate what an empty house would look like (nicely) furnished and accessorized (wall art, area rugs, mirrors, etc.)

I'm aware of several companies that either have products on the market, or are just about to be released.

The pitch to clients?

Spend $500 on virtual staging, $5,000 on actual staging -- or list it $10,000 lower (if they're already on the market, make that a $10,000 price reduction).

I know what I'm going to recommend . . .

When the Cover-Up is Worse Than the Crime

Damage Control: Advice to Prospective Sellers

As Watergate made plain, the cover-up is often worse than the crime (although in Richard Nixon's case, ordering a burglary was plenty bad in its own right).

The same principle applies to selling homes.

Here are three examples where covering up a problem is worse than simply leaving it be (or preferably, fixing it before prospective Buyers ever show up).

One. Odors.

I don't know about other Realtors, but whenever I smell the distinctive aroma of a plug-in (or more accurately, my clients do, because my sense of smell is atrocious), my hackles immediately go up.

What is the Seller trying to hide? Is there a water intrusion problem somewhere? Other damage? Is the smell mold, or could it just be mustiness from not having the house opened up recently?

If in fact a home smells moldy, the homeowner should identify the source of the water -- which is always the culprit -- and eliminate it.

Even if the offending odors are from an especially pungent dinner the night before, it's still better not to try to mask it.

(Advice to Sellers: you may want forego preparing especially spicy or exotic dishes while your home is on the market -- or at least those days you're expecting lots of traffic. Seriously.)

Similarly, if the home smells of fresh paint, that can be a cue to look for wall or ceiling damage resulting from a defective roof, recent plumbing problems, etc.

Two. Noise.

Whenever I hear too-loud background music (I guess that would make it "foreground" music), I look outside: is the home on a busy street? Is it close to (or under) the flight path? Is there a commercial business near by?

"Foreground Music"

I think a good rule of thumb in such cases is, if you notice the music . . . it's too loud.

It's also surprising to me how often music that the Sellers assume is tasteful and mood-setting . . . isn't.

Three. Concealed damage.

Probably the most egregious example of covering up damage that I've personally encountered was the shoe I tripped over -- 10 seconds into the showing -- in the middle of the Seller's Living Room floor.

Directly below: a hole in the floor that went all the way through to the basement.

Aside from being dangerous (physically, liability-wise, etc.) it's also dumb: my Buyers had seen all they needed to to know that this wasn't the home for them.

As a practical matter, the cues that there may be underlying damage are (usually) much more subtle: the too-big or oddly out-of-place rug (covering damage to the flooring); a wall hanging that seems misplaced; a piece of furniture that you keep bumping into (again, covering floor damage); a shade that's pulled down because one or more window panes are broken.

If the prospective Buyer catches the problem early, their trust is shot; if they catch it later, during a second showing or even at the walk-thru, they're likely to demand a big price concession or may even threaten to walk if the problem is big enough.

Even if they stay in the deal, I can guarantee that the now-distrustful Buyers will ratchet up their scrutiny of everything else in the home!

None of the foregoing scenarios makes the Seller better off than if they had simply dealt with the problem in a straightforward manner from the get-go.