Question

Topic: Strategy

Marketing Home Staging & Furniture Business

Posted by Anonymous on 12/16/2008 at 9:01 PM ET 250 Points
We are the owners of a furniture store that offers furniture leasing and a home staging service. Given the current market, we're finding that home owners/Realtors are reluctant to stage their vacant homes for fear of a non-ending monthly furniture lease. It doesn't help that the area is saturated with stagers.

We are considering a new promo offering a graduated discount furniture lease that basically conveys the message that we know that staging a property will help it sell faster, and that we are willing to stand behind premise by limiting their leasing cost exposure by reducing those leasing fees each month the home stays on the market. This could essentially reduce the homeowners fees to zero if the house stays on the market long enough. What do you think?

Given the currently economy, are there opportunities we should consider in the REO/outsource market or other opportunities?
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  • Posted by Inbox_Interactive on 12/16/2008 at 9:17 PM Accepted
    Wow, that is a tough one...I went through precisely this very thing a few months ago. I had a very nice vacant home for sale, and I wanted to put my best foot forward, so I had it professionally staged.

    It looked great, and it showed like a model, and now that I've done it, it makes perfect sense to do. After all, when there's nothing else to look at in the house, it becomes very easy to find even the tiniest of flaws. Minor imperfections that would be overlooked in a furnished home stand out like a sore thumb in an empty house.

    Having said that, it didn't end up helping to sell the house. We got no traffic on it at all, even though it was priced very, very competitively. As it turned out, that specific market was just dead to the world. No one really wanted to buy a home there. And with that, my slam-dunk "fix-n-flip" house became a rental property.

    Sigh.

    With respect to the staging, I probably kept the furniture there for too long at too much expense. The thing is, once you have it in there, you're afraid to pull it out because people will see it vacant and then compare that to the photos they had from the listing (where the house is staged and looks gorgeous). Talk about disappointment for them! And then you...

    So, yes, if your alternative is to have a warehouse of furniture sitting there not generating any revenue, I think you're right to get creative here.

    Perhaps you offer three free months if the house doesn't sell in the first 90 days (or some sort of deal to make the later months less painful), or maybe there's a way to collect part of the payment when the house sells. (Not sure how you'd guarantee that would happen, though, especially if someone is underwater on their house...)

    If the stuff is just sitting there taking up space, though, I think you're smart to find a way to share some of the risk with the homeowner/seller.

    Good luck!
  • Posted by Jay Hamilton-Roth on 12/17/2008 at 8:23 AM Accepted
    It depends on how confident you are of your furniture and the ability of your stagers. If you've done a lot of studies showing that staging a home sells it 10% faster and at a 3% higher price (on average), then you could offer a set price for the lease (or even take 1% of the sale price after the sale, so there's zero upfront cost).

    The problem with your promotion is you're saying on one hand that "we know a staged home will sell faster" but on the other "if it takes a long time to sell it, it won't cost you an arm-and-a-leg".

    Ideally, you'd want the cost of the staging to be zero for the homeowner and have the realtor pay the staging fee from their commission. This would make sense to do for high-priced homes.
  • Posted by michael on 12/17/2008 at 8:35 AM Member
    Jay is correct that non-vacant homes sell for a better price, but what's the difference?

    I would offer to put a link to their homes on your website. You can also talk about how quickly you can deliver/set up. This gives the owner the chance to keep avoid the cost, conceivably, until the last minute.

    What if you waived the lease amount after a period of time...say for 7 days after the average selling period of houses in the area.

    Michael

  • Posted by Frank Hurtte on 12/17/2008 at 9:30 AM Member
    I believe you are onto something, however I wonder if a fixed cost with an early return program would work better. Something like, fixed cost for up to 6 months. But, if you sell it in say 30 days, we refund a portion of the money. This plays on the consumers confidence that staging will make their house fly off the market.
  • Posted on 12/17/2008 at 10:20 PM Author
    Thank you for your responses.
    Inbox - I like your idea of a free lease for an addt'l 3 months if their house doesn't sell within 90 days.
    We considered getting the staging fee up front, and offering escrow billing for the lease portion, but if the house doesn't sell or they take it off the market, then we're out.
    jay- it's unusual for realtors to pay for the staging, at least here anyways. I'd like the 1% idea if I didn't have to worry about collecting it.
    We were tossing around the idea of marketing the 3 month offer with a headline like "Get up to 3 months free furniture rental"
    Do you think that would be enough of an enticement for homeowners to want to stage their vacant homes?
  • Posted by CarolBlaha on 12/17/2008 at 11:56 PM Member
    Your challenge is that there has been so much press in the media that your service is over valued. So you have to overcome that. Being performance based (reducing your pricing over time) does that.

    Not only do you want to spruce up a vacant home, but one that is occupied, but does not show right.

    Two great opportunities.

    We are selling our home and have mixed furniture from mine and his. If I wasn't expecting to move again, I'd make major furniture changes. Its my intention to take little of our furnishings. If I really thought it would make a difference, I'd sell the mismatches I am not taking now (vs when we know we are moving) bring in from rentals the "look" I want (my 1st degree is in interior design). Literally with my background this house is driving me crazy. I get by with calling it "camp".

    But in this market I am not sure it makes a difference-- its all about the numbers. I don't want to move new purchases. If I were to dwell, renting and selling what I won't take makes sense. When we combined houses, I didn't have time to sell (once I found a buyer) and Goodwill got a windfall.

    Realtors have been calling as our original listing expired. They are offering a graduated commission rate-- so fusion market the same. In todays market you have to be flexible, homeowners, realtors and those that serve those markets. Your plan is right and in tune with the market.
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