Sunday, April 26, 2009

Home Builders Using Fake Occupants to Sell Homes

From the Department of You Would Not Believe it Unless You Saw It, the Wall Street Journal reports home builders are resorting to filling their empty homes with temporary fake "owners" to detach from the stigma of an "empty home". I assume this is a green shoot.
  • OCEANSIDE, Calif. -- The fragrance of sage-scented candles and sounds of jazz fill the air of a 2,600-square-foot house a block from the beach. Tiger-striped chairs flank tables crafted from exotic woods. Photos of a chubby baby hang on the walls. Whoever occupies 211 Windward Way, they seem to live the good life. Too good to be true, in fact. The house is owned by a builder, who hasn't been able to sell it for more than a year. And while someone really does live here, it's as part of an elaborate bit of stagecraft aimed at moving Southern California's echoing inventory of luxury vacant homes.
  • This $1.2 million seaside pied-a-terre is occupied by Johnna Clavin, a 45-year-old Los Angeles event planner and decorator who has seen business slow. In exchange for giving the townhouse a stylishly lived-in look, she gets to stay there at a steep discount and stands to earn a bonus if the house sells fast. (... she pays $800 a month to live.)
  • The home's builder, Paul Zocco, hoped to sell it before he finished it. That was two years ago.
  • The photos on the walls are of Ms. Clavin's son, now in his 20s. Lamps came from a friend's storage unit; an African dining table is a boyfriend's; the potted palms cost $15 at Home Depot.
  • Home "staging" companies charge owners several thousand dollars to fill houses with attractive furniture -- but no human props. Faux homeowners could be the next big thing in staging.
  • Ms. Clavin responded to a Craigslist ad placed by Quality First Home Marketing, a San Diego startup. It aims to fill high-end empty houses with occupants who play the part of happy homeowners, in a bid to remove the price-depressing stigma of vacancy.
  • When a real-estate agent phones, Ms. Clavin says, " 'I live here' -- because technically, I do," and provides a broker's number before the caller inquires further. She must keep the house spotless between 8 a.m. and 8 p.m. She usually gets only five minutes to light the candles, flip on music and disappear before a showing. If she has more time, she'll bake cookies to scent the home.
  • If the place sells in 90 days, she'll earn a relocation bonus, and move on to another empty asset.
  • Ms. Clavin, and her furniture, beat out 46 applicants who auditioned for the homeowner role, says Quality First's owner, Mary Heineke. "I already know they can't afford the house," Ms. Heineke says. "I want to know if they can replicate a person who can afford that house."
  • Showhomes Management LLC, a franchise operation based in Nashville, has 350 "resident managers" living in homes for sale in 46 high-end markets, including in Florida, Arizona and Illinois. There are several other resident-manager companies, most based in the South, trying to cash in by helping move bank-owned and vacant properties
  • Unoccupied staged houses aren't selling as well as those with people in them, he says, "because people can still tell they're vacant."
  • Temporary occupants bring their own furnishings and insurance to empty houses, and maintain the home, lawn and pool. They pay utilities and a monthly fee well below market rent. "They are not tenants, because they are instrumental in marketing the property," says Ms. Heineke. And besides, "a tenant isn't seen as an asset."

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