Home Staging - Strategically Useful for Corporate Mobility
By Peg Guinta
Staging a home can speed up selling relocation properties and potentially lessen corporate expenses—good reasons to consider it selectively as a cost-efficient strategy.
Most corporate transferring homeowners must find marketplace buyers because employers don’t often extend guaranteed buyouts (GBOs) anymore. While home staging typically isn’t common during the transferee ownership phase of the property’s disposition cycle, it may be a more commonly accepted strategy for vacant inventory properties.
But identifying properties that may benefit by a “staged” approach during the transferee ownership period is probably most cost-efficient overall. The key is to recognize and promote a home-staging opportunity early in the process to avoid a costlier future spend by employers and transferring employees.
Corporate clients and transferees may not be aware that smaller scale and less costly services are also available from many home stagers. De-cluttering, re-organizing and repurposing rooms all may enhance salability significantly without needing to rent decorator furnishings. Consultation-only or recommendations-only reports may also be available for relatively modest fees for DIY types.
During the transferee’s home marketing period, corporate costs can mount quickly, making modest interior or exterior improvements a worthy investment in maximizing sale opportunities. In the right situation, you could make a case for a modest staging allowance as a hedge against future expenses for extended marketing-time properties.
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Long-term, unsold properties delay assignment start dates, affect employee productivity and generate costly relocation policy assistance exceptions for corporate employers. The longer the home remains unsold, the higher chance of price reductions and seller-paid agent and buyer incentives for condition or other marketing challenges.
Some policy exceptions are intangible: Extending relocation-completion deadlines and the impact of distracted employees on productivity are difficult costs to estimate. Two of the most typical exceptions due to unsold departure homes are increased time limits on duplicate housing costs and temporary housing accommodations. Initial policy duration limits are typically up to 90 and 60 days, respectively, but are often extended. According to ERC’s 2013 U.S. Transfer Volume & Cost Survey, the average, approximate cost employers pay per employee receiving these policy components are:
Duplicate Housing: $3,700; almost 60 percent of ERC’s respondents reimburse mortgage interest, real estate taxes, utilities and insurance expenses after the destination home is purchased prior to selling the old home.
Temporary Housing in the new location: $6,300; 95 percent of ERC’s respondents offer temporary living at the destination location.
Property Management Services are sometimes provided as an exception for those unable or unwilling to sell the home. Employers offering tenancy-managed or vacant rental management assistance usually provide an allowance or cover costs for a limited time period.
GBOs, if allowed at all, are often reserved for top-level transfers, but are occasionally extended as an exception to critical or key transfers normally ineligible. Property acquisition has significant cost exposure to employers who then carry the home until it resells on the market; costs can easily exceed 15 percent or more of the home’s value.
Some corporate relocation policies also offer modest financial assistance supporting transferees’ home marketing efforts. Not uncommon is the home sale bonus, provided to homeowners to encourage active participation in home marketing programs. Eligibility is usually based on an early sale—usually within 90 days—and the dollar amount may be up to 3 percent of the home’s value.
Fewer corporate policies provide allowances for minor repairs or improvements to enhance home marketability prior to listing. Home staging allowances within a corporate policy are rarer still. Increased exposure to home stagers’ array of various and lower-cost services and statistical data supporting its value could help change this.
Your business model could be a simple, as-needed referral arrangement with an external staging service partner or on-staff specialist. A VIP-level, fee-paid service could include oversight and follow-up with homeowners and periodic reporting to RMCs or corporate clients.
Relocation administrators often live in an environment of policy exception requests and may consider granting a modest home staging allowance in the right circumstances when requested by transferees or recommended by agents. One successful experience that helps sell a “red-flagged,” marketing-challenged property may increase receptivity to future use.
Not all home-sale challenges are solved with staging, but recognizing opportunities to recommend staging services to quicken sales, save costs and settle employees sooner is, after all, the objective of everyone involved.
Peg Guinta, CRP, GMS, is Projects Director for RIS Consulting Group. For more information, please email firstname.lastname@example.org.