December 12, 2009
The three-bedroom waterfront estate in Fort Lauderdale normally would rent for about $5,000 a month. But Angela Genereux gets to live there for roughly a third of the cost.
The tradeoff is she has to keep the place in show condition—no dirty dishes or wild color schemes—and move out when the place sells.
That’s the deal she struck with Showhomes, a home management and staging company that opened a Fort Lauderdale franchise last summer. The Nashville, Tenn.-based company works with owners of vacant residential properties and their real estate agents, providing live-in managers who make the homes more appealing to potential buyers.
Managers, or stagers, typically bring their own furniture and agree to have the homes ready for showing on 30 minutes’ notice. In exchange, they get reduced housing costs.
“A big part of it is psychology,” said Don Vanderhoef, owner of Showhomes’ Fort Lauderdale office. “Buyers see food in the refrigerator, clothes in the closet. They see all the signs of life of a regular home.”
The housing bust has left millions of vacant homes in its wake nationwide during the past four years. Some homes become unmaintained eyesores, with overgrown lawns and swimming pools full of green water. They also can attract squatters and crime, hurting nearby property values. “Vacant homes are a prime target for vandals,” said Gerry Schilian, a Boca Raton, Fla., lawyer who handles foreclosure cases. “Any way you can keep these homes intact preserves a community.”
Still, some real estate agents are skeptical about the value of Showhomes’ approach. There’s no guarantee the managers will maintain the homes properly, said Bob Melzer, an agent in Boynton Beach. There also could be legal issues if they didn’t want to leave when the homes are sold. “It sounds like a clever idea, but then you’ve got to make it work,” Melzer said.
Vanderhoef insists it does work. Managers sign contracts and undergo thorough background checks. Only once in the 24-year history of the company has there been a problem with a manager, he said.
Showhomes prefers to list upscale homes—those that are priced at $500,000 or above—but will consider lower-priced homes. Vanderhoef said properties in the program tend to sell faster and for more money than other vacant listings. The company’s eight Florida offices have more than 100 staged homes for sale. The start-up Fort Lauderdale office has two so far. Small firms tend to offer similar services in individual markets, Vanderhoef said, but he isn’t aware of a competitor with a national presence.
Showhomes says it has staged about 60 homes statewide this year that sold for an average of $816,000. The homes were on the market for an average of 135 days after staging. High-end homes can take more than a year to sell.
Homeowners—including individuals, builders and lenders—pay Showhomes an upfront fee that ranges from $750 to $1,500 for a 3,000-square-foot property, Vanderhoef said. They continue to pay the mortgage, insurance and taxes while the property is listed for sale. The company covers normal operating expenses, such as utilities, and minor maintenance costs.
Once the home sells, the owner pays a “success” fee, up to 1% of the home’s list price. If the property doesn’t sell, Showhomes pockets only the upfront money.
The Fort Lauderdale home Genereux is renting went to contract Nov. 12, less than two weeks after she moved in. Vanderhoef said the home is selling for close to the $599,000 list price. Genereux will have to find a new place later this month, but she said she doesn’t mind such a transient lifestyle. “You get to live in luxury on a smaller budget,” she said.