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Staging Can Help Sell Faster, for More Money

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | March 13th, 2015

Sellers who have balked at their agents' suggestions to "stage" their homes and make them more attractive to would-be buyers should listen to Ruvell Martin, an ex-NFL football player and now a real estate agent in Charlotte, South Carolina.

Martin and his wife, Michelle, sold an investment property on the very same day it was staged. They had three offers, each above the couple's asking price.

The Martins bought the property with the intention of flipping it soon after renovations were complete. But the empty house sat on the market for more than 60 days, and nothing. The most common feedback from visitors was that the bedrooms were too small.

They were going round and round about lowering their asking price when Joan Inglis, a real estate agent who also owns professional staging company Carolina Spaces, suggested they try to bring the place back to life before taking that step.

The Martins agreed, and Inglis furnished several key rooms in the house. In the aforementioned bedrooms, she added king and queen beds, nightstands, dressers and chairs to show they were plenty large. Inglis brought in the furniture on a Saturday morning, and by that evening, the sellers had a contract. The deal closed 30 days later.

"We went from no offers to three," says Martin, an agent with Costello Real Estate. "It was a real good experience and now I recommend it to my clients."

He says he was "a little skeptical" of claims about how quickly staged houses usually sell. But now, he's sold himself. "Furnishing the house gave visitors a place to sit down and relax, so they could spend more time in it," he says.

The Martins' experience with staging is now backed by new research from the National Association of Realtors, which found that sellers who opt to help potential buyers visualize themselves in their homes sell at higher prices than the competition.

Staging is the art of putting your home's best foot forward. It goes beyond freshening the paint, decluttering and throwing open the curtains for daytime showings (or turning on all the lights for nighttime ones). Done right -- usually by a professional stager or sometimes a savvy agent -- the process allows you to emphasize your home's best features and minimize its worst. It might involve furnishing a house or condo you've already moved out of so that it's not sitting empty, or removing furniture in a property that's still occupied to make the place look more spacious.

Sometimes, the house needs to be updated with new flooring, countertops, light fixtures and landscaping that will make it more appealing to today's buyers. Or perhaps all that's needed is to rearrange your furniture or supplement it with additional pieces.

According to NAR's findings, 37 percent of sellers' agents surveyed said staging raises the value of the property by 1 to 5 percent. But nearly a quarter -- 22 percent -- put the gain somewhere in the 6-10 percent range. And 12 percent said the dollar value of a staged home jumps from 11 to 20 percent.

The percentages concerning higher sales prices were somewhat lower among agents who represent buyers. Whatever the increase, though, just 4 percent of the respondents believe staging has no impact whatsoever on the home's ultimate selling price.

Other key findings: Almost half the agents -- 46 percent -- said buyers who see a house online are more likely to visit it if it is staged. And 28 percent said buyers are more likely to overlook a staged property's faults.

The survey did not say whether staged properties sold any faster, but anecdotes like Martin's abound. Ann Waters, an accredited stager who owns Naples Home Staging in Southwest Florida, says a $4.5 million condo she staged sold within two days after she worked her magic. Ditto for a $200,000 house.

According to Accredited Home Staging, which teaches staging courses, 95 percent of staged houses sell in 11 days or less (on average), compared to 90 days for non-staged properties. AHS also says professionally staged houses sell for 17 percent more than other places.

The median cost of home staging, according to the NAR survey, is $675. Generally, 4 in 10 sellers pay stagers before the house officially goes on the market. But 10 percent are allowed to pay after the house is sold, and 3 percent of the agents' realty firms pay for the service, leaving no cost for the seller.

Inglis says to plan on spending 1 to 3 percent of the home's list price on professional staging -- at least $3,500 for a $350,000 property, for example. If you want to do the work yourself, a consulation can be much cheaper: Inglis' rates start at $250 for such a meeting, depending on the size of the property.

Waters' fees vary with the clients' needs. If the house is empty, she charges anywhere from $5,000 to $30,000. The rate is lower if the home only needs a few key furniture replacements or edits. For each new client, she compiles a detailed report on how to use their existing furnishings to appeal to the most buyers. The clients are then free to implement her recommendations as they see fit.

Inglis, on the other hand, maintains that the job is best left to professionals.

"It is rare for owners with an emotional attachment to their home to complete their own staging project without professional assistance," she says. "You want a professional stager, not someone who watches HGTV for ideas."

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How to Spot a Meth House

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | March 6th, 2015

Independent home inspectors will go over a house from stem to stern, looking for problems from the roof to the basement. But if the inspector doesn't also check for meth, an unsuspecting buyer could be in for a world of hurt.

Meth is short for methamphetamine, a highly dangerous, illegal and addictive synthetic drug that can affect the brain and central nervous system. The drug can be made from easily obtainable household goods, and, as this column pointed out last week, if it has been manufactured in the house you are considering -- or even just smoked there -- the entire place could be contaminated.

Fortunately, there are a number of ways to spot a so-called "meth house":

-- Check with law enforcement. The U.S. Drug Enforcement Administration (dea.gov) operates the National Clandestine Laboratory Register, a database of addresses that include properties where meth labs have been found.

Don't stop there, however: As the register points out, the federal list is far from complete. So check with your state and local law enforcement authorities and health departments, too. Many have similar databases that list houses within their borders where illegal drug activities have been found. West Virginia, for example, has a state registry listing the addresses of nearly 1,000 properties with clandestine drug pasts.

In Oklahoma, where lab seizures have increased every year, local law enforcement agencies can confirm that a chemical seizure took place and provide the name of the hazardous material contractor who did the cleanup. The contractor should have a list of what chemicals were present.

If the property isn't on any list, however, "that doesn't mean it doesn't have a problem," according to Joseph Mazzuca of Meth Lab Cleanup of Athol, Idaho. Based on his company's own internal statistics and those from law enforcement agencies he works with throughout the country, Mazzuca estimates that "millions of properties are potentially contaminated."

According to a 2013 report by the Government Accountability Office, the number of "lab incidents" peaked in 2000 at 24,000 nationwide, then declined sharply to about 7,000 by 2007. But as of 2010, the number was back up to more than 15,000. Even so, Mazzuca says thousands are not reported, especially in states like Georgia, where there are no regulations on the books.

-- Talk to the neighbors. The folks next door, or even down the block, are likely to know what kind of shenanigans have taken place in the house. About seven in 10 cases Meth Lab Cleanup handles come from tips from neighbors.

Even if they don't know exactly what was going on, neighbors can often tell you about any unusual comings and goings, loud noises late at night, or frequent fights among occupants or visitors -- all pretty good signs that something was amiss. Ask specifically if the police have often been called to the house.

-- Look for telltale signs. Chances are, the house has been cleaned up for resale. According to Mazzuca, though, only 23 states regulate the decontamination of meth houses. And even in some of those that do, "nobody is enforcing the laws." In Arkansas, for example, local police are supposed to put stickers on the door and notify the state authorities, "but that doesn't always happen."

Even if the walls have been painted and the carpet changed, that's not enough to get rid of the contamination. And there are still red flags that should set your antennae to wiggling.

Odors are one warning sign. If the place smells of urine or unusual chemical aromas such as ether, ammonia or acetone, it could be contaminated. Ditto if your eyes or throat burn when you enter the place. Also beware if there is an overwhelming smell of air freshener.

Other indications of contamination include chemical stains on toilets and bathtubs, propane tanks with fittings that have turned blue, and trash with a large amount of household products such as paint thinner, lighter fluid, drain cleaners and cold tablet containers.

-- Beware troubled properties. Foreclosures tend to have a higher incidence of contamination from illicit drugs. Mazzuca says about 70 percent of the 1,500 sites his company handles every year are bank-owned homes.

If the house is being sold "as-is" -- as many foreclosures are -- look for signs of neglect. Users are more likely to put their money into drugs than upkeep, says Garth Haslem, aka "The Home Medic," a Utah-certified meth contamination specialist.

One red flag is heavy staining on the carpet, walls or ceilings. Another is doors and doorframes that have been abused and damaged. "Meth users can gain superhuman strength, and with that comes superhuman anger," according to Haslem. "The meth habit often shows physical clues on the bedroom doors, the front door or the door to the garage."

-- Testing. Haslem also warns that just because the house doesn't exhibit any of these signs doesn't mean it is free of problems. So if any of the above causes concern, or if you simply want to be certain there is no contamination, you can purchase an easy-to-use meth testing kit from your local hardware store for about $50. "When in doubt, do the test," he advises.

The tests provide lab-verified results. If meth is present, either walk away or hire a certified meth decontamination specialist to determine the level of contamination and what it would cost to rectify. You can usually find such professionals under the term "environmental" in the phone book and online, or your state may maintain a list.

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Beware of 'Meth Houses'

The Housing Scene by by Lew Sichelman
by Lew Sichelman
The Housing Scene | February 27th, 2015

"I'm sick, my kids are sick and my dog died." -- typical homeowner's complaint

Evelyn Johnson felt something was off from the get-go. For starters, the Elkhart, Indiana, real estate agent tried to schedule an appointment three times before she and her clients were actually able to get inside the house listed for sale.

But that wasn't all. The place "had a big handmade sign in the yard listing five or six people's names, saying to stay off the property or they would be prosecuted," Johnson recalls. Turns out, they were the names of the ex-wife and children, who "had repeatedly broken in and taken things that did not belong to them."

Still, her buyers loved the place and wrote an offer that was above the asking price. But the seller refused to respond. So a few weeks later, Johnson and the listing agent went to the owners' divorce proceedings, where the judge ordered the sale as part of the couple's breakup.

There were other clues that something wasn't right. At the hearing, Johnson says, the husband was visibly shaking. "There was no part of him that was still. His head, his arms, his voice. Everything." Then there was a conversation with a neighbor, who reported that the wife and her kids were into drugs. "They were very bad children," Johnson was told. The neighbor said they were "always in trouble" and had been to "kid-prison."

Johnson recommended that her clients test the house for methamphetamine, or meth: an illegal, highly addictive synthetic stimulant that affects the brain and central nervous system. If it is present in a house, it can leach into practically everything. The contaminants found in meth can result in numerous health problems, including respiratory irritation, skin and eye irritation, headaches, nausea and dizziness, according to authorities in Oklahoma. The state's Department of Environmental Quality says that "high exposures, even for a short time, can cause death or severe lung damage."

When the test on the Indiana house came back positive, the offer was withdrawn.

It's a good thing the deal failed to go through, too, because cleaning up a meth-tainted house can cost thousands. Even though the drug wasn't manufactured in the house, "just" smoked in both the boys' bedrooms, the next owners will face a monumental task.

Though the preponderance of houses where meth has been manufactured or smoked are in the Midwest, they can be found everywhere. Worse, some law enforcement agents believe they only find about one in 10 labs. And even though a house may have been continually cleaned, that doesn't get rid of the contamination, which will affect every corner of the property.

Under some circumstances, the house may have to be stripped to its bones. Walls will have to be removed down to the studs, flooring will have to come up, ceilings will have to come down, the HVAC system and its vents must be cleaned, and insulation and light fixtures must go. There's also a chance that at least part of the plumbing will have to be replaced, because waste products poured down the drain or into toilets can collect in the traps and give off fumes.

Despite the devastating impact of meth contamination, only about half the states require owners and their agents to disclose known meth exposure in homes for sale.

Law or not, though, agents have a duty to disclose this information, according to Lesley Walker, an associate counsel with the National Association of Realtors. "If (agents) are aware that a property has been used for a meth lab or that marijuana has been grown in the house," Walker says, "that would be considered a material fact and they would need to disclose."

Once disclosed, moreover, it would have to be disclosed every time the house is resold. So if you buy a meth house, clean it and live in it for a few years, then go to re-sell, the presence of meth would have to be revealed to your potential buyers -- even though it had been removed and you had no problems.

But not all agents play by the rules. Nick Ratliff of the Cypress Residential Group in Lexington, Kentucky, ran into that problem recently. He represented an investor who wanted to purchase a rental property where a previous tenant had been busted for selling meth. Even though his state has rules requiring disclosure, the listing agent felt no such duty because the unit had been cleaned and the seller had never lived in the property.

Sometimes, though, the seller is the one who refuses to disclose. In that case, it's up to realty professionals to step up. Prabhjit Singh with NAAAM Real Estate in Rockville, Maryland, did just that recently, by refusing to list a meth house because the seller balked at disclosing -- even though the cops had raided the place and the seller's teenage son was arrested.

"It was very clear to me that this was a material fact, as there would be health issues for whomever would own the home," the Maryland agent says.

Next week: How to find out if the house you are considering is contaminated with methamphetamine.

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