Banks turn to Showhomes to Reduce overhead

Heritage Bank Senior Vice President Greg Totten was a skeptic when he decided to try using a home staging company to sell a bank-owned property that had been on the market in Queens Harbour for nearly a year at $2 million.

After a home manager moved in and staged the 6,000-square-foot home, the number of showings increased as well as the dollar amount of the offers before it went under contract in September to sell for $1.5 million. Totten’s now a believer in home staging.

Home stagers specialize in furnishing and decorating vacant homes to make them look lived-in for prospective buyers. Although the industry started as an indirect result of the savings and loan crisis in the mid-1980s when lenders needed help selling a glut of foreclosed homes, since then most homes have been staged for homeowners — until now.

“Banks are looking to try to get the most from the homes they now have,” said Totten, who is the branch manager at the Ponte Vedra Beach branch of Heritage Bank. “We came out, over all, I think pretty well.”

In the last three to four months Showhomes franchise owners Jim and Kaye Biby said they’ve seen an increasing interest from lenders looking for help to sell some of the homes they’ve had to foreclose on. The Queens Harbour home was the first foreclosed home the Bibys helped sell with a home manager who actually lived on site during the staging process. They’ve already signed a contract with a regional bank, which preferred not to be named, to help sell one, maybe two foreclosed homes and is negotiating a contract with a third.

Kaye Biby, Showhomes Jacksonville

The Bibys have also staged a short sale home in Palencia that sold in 21 days in March and have signed a contract to stage another short sale in the World Golf Village.

The Bibys say they think lenders are becoming more interested in their staged properties, which typically include live-in home managers, because it reduces the bank’s overhead.

Even though bank-owned home staging is growing, the Bibys expect it to remain a small portion of their overall portfolio. So far this year, the franchise has helped sell 17 homes for a total value of $16 million compared with 21 homes for a total value of $21 million in 2008. Only one of the homes sold so far this year was a foreclosure and one was a short sale. They had no foreclosures or short sales last year.

In the past most banks maintained minimal upkeep on foreclosed homes, often selling them as is. Lynn Vitel, broker at Vitel Realty Group of Keller Williams Realty, said now with competition stiff in the residential real estate market, banks too are looking for a competitive edge.

“Staging means everything. It lets people visualize what the rooms are,” Vitel said. “The banks are having to smarten up.”

Sandy Steiner, an agent with Re/Max Specialists who used Showhomes to stage a property that was not a owned by a lender, said she expects that as market values continue to decline more lenders will reach out to home stagers.

“Banks are taking on a larger responsibility,” Steiner said. “They don’t want to be blamed for that one foreclosed property bringing down the property value for the whole neighborhood.”

Christy McCarthy, owner of Jacksonville-based Interiors Revitalized, said that while she hasn’t actually staged any lender-owned properties yet, she too has noticed the interest, and she understands why.

“It’s crucial to get these homes back in top-dollar condition so they don’t lose any more money,” McCarthy said.

Marcus Martin

"Your Vacant Home Rescuer"

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