Selling Unsellable Homes

Forbes
Betsy Schiffman

Geri Spira had what should have been any realtor’s dream: Last November she received the listing for a $6.5 million beach house in Santa Monica, Calif. But it wasn’t all good news.

Multimillion-dollar homes weren’t selling well, and Spira worried that this house would be particularly difficult to unload. Empty and sparse, it had been occupied by a very large family–and it looked like it, Spira says. The landscape was also unremarkable, and despite the fact that it was a massive 9,500-square-foot property, it seemed small. And it didn’t help that two other comparable homes were on the market in the same price range.

So Spira called in Aimee Miller, a high-end “home enhancer” (also known as a home stager) to furnish and decorate the public rooms and the master bedroom. By the time Miller was done, Spira says it was a completely different house.

“She did everything. She even placed his-and-her slippers on both sides of the bed in the master bedroom,” Spira says. “Aimee relandscaped the entry, brought in artwork, floor rugs, chose the music and even filled the shelves in the kitchen with saffron rice, vinegars, oils and jars of olives.”

Spira says the house was sold within 30 days, while the two other similar homes are still sitting on the market. She believes it’s due to Miller’s work.

“If we hadn’t staged it, it would still be on the market,” Spira says. “People just don’t have the imagination to see a home for what it could be. They say they do, but they don’t.”

Before home sellers open their homes to the public, they probably have to clean behind the washing machine and bleach the bathroom tiles. The end result is a home that looks pretty much the same, only it’s slightly cleaner and less cluttered. A home stager, however, can take a basic three-bedroom home and turn it into another house entirely.

Home stagers are similar to interior designers, only they take a home that’s on the market and fully furnish and decorate it to make sure it sells in good time and that it sells at the asking price. They are also often given the awkward task of replacing homeowners’ old stodgy furniture with something more attractive; or they may come into a home half an hour before an open house and light candles, turn on music, replace the toilet paper and leave a cheese board with fresh fruit on the kitchen counter. They are the dreamweavers in the real estate world, and they get paid quite well for it. Sometimes the seller does the paying, sometimes it’s the realtor.

Low-end home stagers (who suggest basic ways to clean up a space or rearrange the furniture) charge between $100 and $2,000. High-end home stagers however, can easily charge a $50,000 fee (for the rental of their private furniture inventory), a design fee and may sell another $100,000 worth of furniture sales by the time a property is sold. When all is said and done, a high-end home stager may make several hundred thousand dollars on a single job (including the furniture sold with the property)–even if the home continues to languish on the market.

It may seem an outrageous sum of money to spend selling a home, but in sluggish markets where $1 million-plus homes move slowly, it’s something of an insurance policy. Aimee Miller, who founded Designed to Move, a property “enhancement” firm (Miller thinks the term “stager” implies deceitfulness), says the majority of the homes she’s “enhanced” have sold in one to eight days this year.

Her proudest work was on a Los Angeles home that languished on the market for nine years. The owner was about to cut the price by 30% when Miller and her crew came in, redesigned the property in a cowboy/ranch style, and within two hours of the open house, the home sold.

Miller, who started out as an antique dealer, inadvertently became a home stager after successfully working on a Bel Air, Calif., home about six years ago. Now Miller has 60,000 square feet under contract; decorates four to five homes a month, and works seven days a week. (She’s only taken two days off this year.)

Miller works on homes that are priced at $2 million and up. In Los Angeles, that means a lot of celebrity homes. She says it’s her job to make sure the home looks just right–if that means buying 20 pounds of artichokes to use in a table centerpiece, she’ll do it. It also means paying for the upkeep of a warehouse where she stores more than $5 million worth of prop furniture between jobs.

Home staging has become commonplace in most parts of the country over the last five years. California, in particular, is a hotbed for home staging services (which explains Miller’s success). But in Manhattan, brokers balk at the concept.

“In this market?” says Sharon Baum, a Manhattan real estate broker with the Corcoran Group. “First of all, we never have time to get an apartment dressed. Secondly, if a property is priced right, it’s going to sell in the first month–regardless.”

Besides, Baum argues that New York homebuyers are naturally suspicious creatures and are extremely skeptical of artificial setups.

“In New York, if you play music when you’re showing an apartment, people think you’re hiding street noise, and they’ll ask you to turn it off,” Baum says. “If you have fresh baked bread, they think you’re hiding a smell. If you have the lights on, they want to see the natural light. [New Yorkers] are shrewd cookies. They see through everything.”

Instead, Baum opts for what she calls a “whitewash and ficus number,” which consists of a good hearty cleaning and a few ficus trees to add some green. But what does she do for an apartment that sits on the apartment for six months?

“Well, then the apartment’s not priced properly. Even then, maybe I would spruce it up with a paint job, but I’d never bring in a designer,” Baum says.

If New Yorkers are closed to the concept, Miller says it’s only a matter of time before the market warms up to it.

“When I first started, people thought the idea was dumb. But they’ve come around to it. This isn’t just about ‘fixing up’ a house. It’s the whole package: It’s throwing catered lunches to show the house; it’s replacing lights, replanting near the entry.”

And to be fair, it’s not a totally alien concept to New Yorkers. Toad Hall is a small Manhattan-based interior design and furniture boutique that specializes in very exclusive properties, so exclusive the company doesn’t advertise. It isn’t listed in the book, and the boutique is still picky about what jobs it takes. The shop has had several jobs on spec homes, for which it has designed and furnished empty homes to expedite the sale. Toad Hall makes money on these jobs by charging a 50% rental fee and a design fee. Manager Christopher Hebert says the company has sold hundreds of thousands of dollars worth of furniture in spec houses. But Toad Hall still hasn’t had many design jobs on open houses in Manhattan.

“Houses that are nicely decorated will always sell better,” Hebert says.

“But in Manhattan, apartments tend to sell so fast that it doesn’t matter.”

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