Banks try to make vacant foreclosures look ‘lived-in’

Blake Farmer May 2, 2011

Banks try to make vacant foreclosures look ‘lived-in’

Blake Farmer May 2, 2011

Tess Vigeland: Hundreds of thousands of homes in this country are somewhere in the foreclosure process.
They’ve received notice of foreclosure, or they’re awaiting final seizure and sale by the bank. Once that happens — the house can sit vacant for weeks, months or longer. That, of course, contributes to lower home values throughout a neighborhood, making it even harder to sell that house. Now some enterprising banks are filling foreclosed homes with what you might call ‘human props.’

From WPLN in Nashville, Blake Farmer reports on “live-in” home staging.

Blake Farmer: Most realtors will tell you a furnished house is easier to sell. That’s why there’s a whole home-staging industry, complete with a show on HGTV.

HGTV’s “The Stagers:” Staging is about selling homes fast and for top dollar. It’s making people really want to live here.

Instead of moving in a love seat, a few paintings and an area rug, Bert Lyles’ company called Showhomes just finds someone to live in the house. And he actually charges that person rent.

Bert Lyles: You do get weird looks occasionally when it’s first presented. But the truth is, it is a better program in our view, all the way around.

Another company could give the illusion a home is lived in. But Bert Lyles contends live-in staging is a cheaper way to get the job done. Finding the home managers, as he calls them, is the hard part. They need their own high-end furniture. And they have to make their bed, everyday.

Lyles: They have to be willing to keep the home show-ready seven days a week. They have to be willing to leave the home on 30 minutes notice. So if you’re not a neat-nick, this might not be the program for you as a home manager.

Terese Baker-Bell: Hi Blake, come on in.

Terese Baker-Bell and her two daughters live in this 4,000-square-foot home in a wealthy suburb of Nashville, at least for the moment. This is her second Showhomes rental, and she estimates the arrangement saves her $1,000 a month.

Selah Baker-Bell: I’m organizing my stuff.

Selah, the 6-year-old, is still rearranging her toys, including the pots and pans of her play-kitchen. Downstairs in the real kitchen, the granite counters are spotless. The hardwood floor is clean enough to eat off of. Baker-Bell relocated from St. Louis and figured she’d rent for a while until she got the lay of the land.

Baker-Bell: I went on some renters website, and I saw some great homes for what I thought were unbelievable prices.

Then she stumbled onto the catch.

Baker-Bell: It asked questions like, do you have nice furniture? And I thought, I wonder why they’re asking that?

The constant threat of showings doesn’t really bother this family of three. They’re hardly here. The oldest daughter is a competitive gymnast with out-of-town meets every other weekend.

Baker-Bell: So for us, it works because we are extremely busy.

Other home managers are divorced dads or even professional athletes. For companies that do this live-in staging, it’s a booming business right now. Showhomes reports record growth in six of the last seven years. And increasingly, new business is coming from banks, which have historically been stingy property owners.

Jason West: We have no emotional ties to properties as a bank.

Jason West disposes of foreclosed properties for Pinnacle Financial Partners, based in Nashville. It’s one of the 22 banks — spread from Maryland to California — that have started using Showhomes over the last two years. For financial institutions, West says selling a home is just a numbers game.

West: You say OK, is there a benefit for having the home occupied? And is the cost of staging going to either shorten my sale cycle or get me a higher price?

If the answer is yes, West says live-in staging makes sense — as unusual as it sounds — particularly if the home sits on a block with half-a-dozen other empty places.

In Nashville, I’m Blake Farmer for Marketplace.

We’re here to help you navigate this changed world and economy.

Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.

In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.

Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.