But somewhere along the way, a crucial aspect of the crisis was left out. In fact, it could be called the the root, the source, of the issue. It's a root that is enormous, yet has gone virtually unnoticed. It's the people selling the houses in the first place.
I recently sat in on one of my sister's epic TV watching marathons. On this day, she was watching HGTV. A commercial came on for The Stagers, a show in which a team of "professionals" comes into a house that isn't selling and implants the finest furniture, fabrics, dishes, appliances, paint, wallpaper, flooring and the like. Not surprisingly, houses that have been "staged" sell much faster than those that are left in their normal states.
According to Stagedhomes.com, a home that has been staged sell in an average of 37 days, compared to the 182 days it takes an "non-staged" home to sell. This statistic shouldn't be a surprise.
Home stagers' greatest draw is their claim for price increase. According to Mortgagenewsdaily.com, home staging costs range from a $200 consultation to a $6,000 hands-on operation. Either way, they claim homes will sell for a minimum of 3% more than their "pre-staging" price.
Economically speaking, staging is an easy choice. Sellers pay a small fee for huge results. Real estate agents get a fatter commission on the house. Everyone's a winner.
Aesthetically speaking, buyers can see the house's "full potential" and gain a "vision" for interior decorating. The house itself will also undergo improvements (painting, flooring and the like) that will contribute to its overall appeal. Sometimes, stagers will do exterior work, too.
But when it comes to the matter of ethics, staging is severely lacking. Consider this: a first time home buyer looks at a house that has been staged. It has the finest linens on its beds. Its furniture compliments the paint on its walls. The new flooring makes for an attractive foot space. The buyer is sold. He or she buys the place, realizing that it's about $10,000 over his or her budget, but the perks are worth it.
I hope you're seeing the problem.
Real estate professionals somehow have it in their minds that it's okay to treat buying a home like shopping at a department store. A person walks into the store and finds the clothing her or she wants. He or she tries it on. It fits perfectly, so he or she buys it. Then, he or she takes it home (no pun intended). It gets wrinkled in the car, so it needs ironing. It gets washed once, and the color fades. Then it gets stained. At this point, there's no way it can be returned, so the person gives it away or throws it out.
Clearly, owning a home is different. Instead of the $20 a person spends on a shirt that can be returned, he or she is spending hundreds of thousands of dollars on a house that will need thousands of dollars for upkeep. The analogy can only be taken so far, but it's exactly the way real estate agents treat their clients' investment.
Much like a salesperson at Macy's a real estate agent will follow you around, asking "how does it fit," and "if you need any more help, my names is ..." At the end of the day, a real estate agent is a glorified salesperson, only he or she gets paid more than deserved. It's as if real estate agents are being paid for the decisions their clients make. Ultimately, it's not just what the agent says, it's what the client wants.
And that's the source of staging. Agents get an idea for what their clients want. They goad the struggling sellers into staging their home. They show buyers the house, knowing that they will be intrigued. When the house sells, the agents make sure the stagers get the borrowed goods out the house. Then the buyers move in, feeling misled, maybe even betrayed.
Ultimately, the point is this: Staging treats a significant life decision (buying a house) as if it's an everyday occurrence. It's no wonder buyers have recently made impulsive decisions on houses they couldn't afford. It just goes to show that the real estate industry is a ruthless business. And I have no pity its current state. Ironically it's unethical endeavors like home staging that have run property values into the ground. It's led to an unhealthy trend in an industry that is oblivious to its mistakes.
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