Staging a home

buyers do it. If you can find a listing agent that did that, let me know their name and number.

buyers?

it depends on the price point of the listing. When you start talking $5 million properties and above, the brokers who handle those listings will stage them, and often with their own furniture, pulling things out of the warehouse as needed. That's one of those services that's considered covered by the high commission.

A more run-of-the-mill 2BR, if you want it to look staged like new developments are, most listing agents will handle by renting furniture from somewhere like CORT, or buying from somewhere IKEA-ish, perhaps bringing in a designer to do a little painting and make the space seem a little more personal. However, they may well charge you back for that or at least try to get you to shoulder some of the cost.

Most apartments that need to be staged have more basic problems -- often they have carpet that needs to be ripped up and walls that need to be painted white -- so you can discuss with your listing agent who's going to handle the cost of that.

ali r.
DG Neary Realty

"Most apartments that need to be staged have more basic problems -- often they have carpet that needs to be ripped up and walls that need to be painted white"

Walls NEVER "need" to be painted white.

The only people who buy into this old wives' tale are real estate agents with absolutely no sense of style or taste.

Ali

So you are saying that if i was selling a home for 5 million, the 600k commission would cover staging. But if i was selling a 1 million 2br, the 60k commission would not cover you trying to earn the commission by maybe painting and spending a few thousand out of your pocket to make it happen?

Once again I will never understand what it is that really makes it so that a broker gets a percentage of sales and not a set fee.

I am saying it as a professional. Even lawyers these days need to negotiate fees and hours, not that i am one, i am an accountant. Same rules apply. People want to not have to pay by the hour. While you can argue 6% is not an hourly fee. Tell me what you have really done for the person who has a well maintained apartment that more or less sells itself within a few weeks to a month to earn the 6% commission. it would seem based on articles read, it is because the brokers are a closed net and do not really stear people to FSBO properties.

I realize you will say i am off topic, but since you made the commission part of your answer, I will pose the question.

I do not think there is a valid answer to say that the fee should be 6% based on time spent it is an astronimical fee to spend.

Lets say i am selling a million dollar home. you hold 4 open houses at 2 hours each, you have basic office work related to it, then you need to deal with the whole board review process. Throw in some showings maybe not at open houses of another 8 hours. So assume that board package, etc, which buyers broker will do a lot of it is another 2 days of time (16 hours), we are now at 32 hours, i will be nice and kick in another 8 hours and call it 40 hours. now lets say you split your fee, so now we are at $30,000, you have now earned $750 per hour. Sure not all is yours, but you get the picture. Even if i started saying more hours, there is no way that a real estate brokers time is worth more then maybe 200-300 per hour. I am basing this on other professionals, lawyers, doctors, accountants, etc. So at $30,000 at the generous $300 per hour you now need to put in 100 hours which is 12 1/2 days.

Now what happens when you kick it up a notch to a 5 million dollar home. The costs are astronomical.

I am in no way saying a broker is not needed, i think that people need to start demanding a per hour quote or a fixed fee as there is no reason anyone should be giving up 6% to someone who is not really doing more but getting peopel through the door because a brokerage name is attached to it.

MIkev,

I'm not a real estate broker, but on just about any commission-based activity, if you just count the time spent on a smoothly closed transaction, then yes, it is absurd. But you have to realize that the scenario as played out above is not what happens. There are the listings that have multiple open houses/showings which never sell. There is the time spent prospecting for new clients. The work putting together comps for potential listings which go to another broker, or are never listed. I think they also pay for advertising/listing fees. In other words, the closed sales end up subsidizing the other activities. In your scenario, an agent would close a sale per week - i doubt there is a single one who does near that volume.

Maybe off topic: most sellers, if they put some thought and time into it, can stage themselves very easily. 1. Empty out all the personal trinkets, photos, taste specific items in your apt. All accessories remaining (and they should be minimal) should be generic. Photos of sunsets and boats, no monogrammed bath towels. Nothing to impede a prospective buyer from saying "I can see myself here" as opposed to picturing you there. 2. Empty closets and cabinets of clutter. Closets should be neat and not packed. Minimal. Get a storage locker and purge! 3. Get rid of the sofa the cat destroyed--it is disgusting. If shabby chic was your thing in a tiny apartment, you need to slenderize with some Ikea sleek appropriately sized furniture. It may just involve taking out a chair or two or second dresser that cramps a room. 4. Before anyone comes to see the place, always hide your toothbrush, washcloth, empty your laundry basket, immaculately clean the place and empty all trash containers/baskets and the dishwasher. SCRUB the bathroom and kitchen and for goodness sake put the toilet seat down. 5. Do the quick fixed like whitening the grouting, patching holes in the walls, fixing closet doors that are 1/2 off the tracks. Make your place look well-cared for. 6. If you have ANY evidence of past leaks in ceilings fix them up. The goal is to have an immaculately clean apartment that appears as spacious and bright as possible and which looks well-cared for and lightly used or better. Make it EASY for a potential buyer to see your apt as their new home.

It is silly, but little things REALLY turn people off. An FSBO seller greeted me at the door of an open house barefoot. I couldn't wait to leave. I thought it was disgusting (say what you will--it was my reaction). A dirty diaper genie was in another unit I looked at. Laundry still drying in the machine was in another. Dishes in the sink. Walls of personal photos (like 50 of them) were in one apartment. Food smells, toothpaste in bathroom sinks, tampon wrappers in waste baskets, personal mail and bills in a pile on the table. All such easy things to correct but turn offs. In this market, do all you can to make your place appealing. It's so easy and free and can't hurt. Why not? Why do so many sellers not realize this?

Printer you have no argument from me. However you stated the real issue, my closed sale is funding other activities. This should not be, your fee should be based on time incurred. So just earning $30k on a split fee at $300 per hour, which is high because in theory it is not an advanced degree profession, but okay, needs 100 hours of work. Even if we go with your scenario of many open houses, problems, etc, that is why i said 100 hours which is 12 1/2 days, it just makes no sense.

If your accountant or lawyer told you they were going to increase your fee by time spent trying to get other business that failed, would you pay?

So once again not just Ali, but any of the other brokers lurking around, please rationally and honestly tell me why I am paying such a high percentage and potentially depending on my apartment value a high dollar amount. Please do not say it is the industry norm, because that is meaningless. That is just saying well if you get people together and everyone starts saying we will only pay 3% and that becomes the industry standard, then that is a reason.

I am just trying to understand and i would be fine had ali not said that if she was not getting a shared 300k commission and it was just a normal 2br she would try and get the seller to cover costs that she deams necessary in order to earn her commission.

well, that would require a different business model, and you would end up with other people who were unsatisfied. In that case, imagine the potential buyer who looks at 50 places over 1yr, without even making an offer - and he/she receives a bill for $10k (100 hrs at $100/hr). I don't think that would sit too well. But yes, the underlying issue is that this notion of a 6%, non-negotiable commission is ludicrous, and seems very anti-competitive.

Okay Mike you are raising a lot of issues here, but let's try to tackle them one by one.

1) You say that selling a $1 million home would require "painting and maybe spending a few thousand out of pocket to make that happen."

In what world am I furnishing a 2-BR for $5K? If I have to buy the furniture, on that budget of $1250 a room it's going to be trash. Decent rugs alone are going to cost $5K, and we want to scale decor to our desired sales price, so a more "appropriate" level of staging is going to cost closer to $15K or $20K. Sellers who disagree with this are generally the sellers whose furniture isn't nice enough in the first place.

2) Why should real estate agents be paid in correlation with asset prices? Well, it's the way people in other slightly illiquid imperfect markets work (art dealership comes to mind). On the low end, it cuts the other way, and saves a lot of deep-pocketed clients a lot of money. My fee is always negotiable, but the fact that it tends to the same mean ensures a sense of equity. Whether a major law firm is paying your broker's fee, or you have inherited millions (both recent cases) I charge you the same fee I'd charge an accountant.

3) But, okay, my fees are negotiable. So let's say you want to hire me to buy or sell on a flat-fee, per hour basis. Fine. I actually had one client do that in the Village. That's actually the way I pay my lawyers, and the way I pay my accountant, and the way I pay some of my doctors. That pays for professional expertise and education. (I know some brokers are on the level of cabdrivers, but I went to a good college and was a Fortune 500 middle manager before I took up this career).

4) You are way way way under on your time estimates. (Thank you printer for pointing out that agents have to cover non-billable time spent somehow, just as lawyers do -- but let's ignore the "failed deals" problem for now).

40 Hours to sell a co-op including the board package? That's *ludicrously* low. I just spent about 40 hours with a rental client who got a one-bedroom, and that included a fairly streamlined sublet package for the co-op. (Also, while I like your vision of the world where I can accept the buyer's broker's co-op package without any rethinking/revisions/new documents, I don't live there).

100 hours is much closer on a run-of-the-mill $1 million sales deal. Most top brokers deal with that problem the same way lawyers do, by delegating much of the labor to more junior and lower-paid people. I just went to a showing of a 1-BR in a snooty prewar Village building, where the listing broker was one of the top 20 in Manhattan, and it was literally the show-ers first week of work.

I work a little differently than that -- when you hire me, you tend to get me.

5) I freely admit I get a premium to some of my competition. I'm sure that there are accounts who do too. Not everybody wants to pay my fees -- which, again, are negotiable -- but the clients who do tend to come back -- which is really the best support I can give you for my pricing being fair. It's a marketplace, they have other choices, but they come back to me b/c they think I'm worth it.

ali r.
DG Neary Realty

Ali i appreciate the response.

What i am trying to understand is first you say that you need to refurnish a 2br, are u saying there is nothing there now and it is empty? Or are you suggesting to me tht you suggest to clients to spend $20k to refurnish a home they are about to sell?

I do not view real estate as I would the art world. First the art world is a specialty and while i appreciate some brokers do really know there stuff, it is far from the norm, except quite possibly in the high end market.

you seem agreeable to a potential hourly fee, however I have never spoken to a broker before who even suggested they would be agreeable, the most i was ever able to do was go from 6% to 5%.

As to time estimates I would say it varies. I know no board package is perfect, but you also have a buyers broker on the other side to help out with it all. But even if you say 100 is normal, you are still talking $300 per hour on a million dollar apartment assuming a split fee, which i still say is very high.

We are not discussing rental market right now, that is potentially the one area where i would probably agree that the money you get per hour could wind up being extremly low.

Also you seem to be an independent, let me know if i am wrong. I would consider you a different species in the broker world. For the most part my issues are with the big brokerage firms that go through the motions and really are not focusing as you pointed out above. you sign with the big name and you get the small fry showing the place who has no idea what to do.

Ali i want to say i appreciate your views. I have seen your postings in other areas and you very well could be the exception to the rule in terms of being more flxible with your time and how much you want. Most are not and that is where the issue lies, as long as people bend and give in to this flat percentage, i feel nothing will ever change.

Mike, you can't say fairer than that.

ali

On a related note, how much is it worth to stage an apartment, as opposed to leaving it empty? I live in it right now, but with all the clutter I have amassed, it is easier to just move everything out before selling it, rather than moving out some stuff for the sale, then the rest after the sale.

As to the other posts in this thread, I have to admit that in general I do not see the value that listing agents bring to the table. I sold a house in Tucson myself (though I did list it on MLS and paid 3% to the buying agent), and bought my current apartment FSBO via craigslist. Only reason why I am using a selling agent this time is that I am going to be out of state while I sell it. I think, like most middle men, agents will become more and more obsolete now that buyers and sellers can find each other through other channels.

An empty apartment is more difficult to sell than a well-staged one. This is for a number of reasons. It is very difficult for many buyers to picture how to set up rooms if there is no furniture in them and thus hard to picture themselves living there. In addition, rooms tend to look smaller to many people without furniture in them. And in an empty place, every minute flaw becomes glaring. Lastly, while it may not hurt to have an empty place when it comes to negotiations, it surely won't help. When I was looking, I salivated over empty apartments because I knew the seller was over a barrel with money flying out the window with everyday that passed.

Yeah, I think that even though my apartment is on the low end (maybe 400K), it is worth it to stage. Found a guy that comes highly recommended that will take care of everything for about $4500.

FWIW, when I see an empty house/apt, it always looks smaller to me.

Staging is easy and cheap to do yourself so I don't see what the big fuss is. Either get IKEA furniture or buy some used pieces and fix them up.

Staging is just another tool of manipulation for ... aaahm ... brokers?
If a space is spectacular, it will speak for itself empty. If not that spectacular, just keep enough big pieces of furniture (a sofa, and armchair, a floor lamp) in to give a buyer an idea, nothing more.