Providing a fully designed and furnished home

The CEO of Restoration Hardware recently discussed providing customers with homes that are completely designed and furnished:

architect architecture blueprint build

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I would ask everybody in this call, if you get a second tonight, go on Zillow, go on Redfin, go on, pick your website for real estate. Go look at 100 homes tonight in a price range that you think we might play at. And tell me how many have great architecture, tell me how many have great interior design and how many have great landscape architecture. If it’s 1% — if it’s more than 1%, like you must live in a really great area. But even in the great areas, it’s so low. How many friends’ houses do you go to that you say, “Wow, this is beautiful architecture. This is great interior design. This is great landscape architecture”? Almost never. Almost never. It’s like a completed — completely uncharted world.

When you really look at the big homebuilders, they’re kind of stamping out some — it’s not a McMansion anymore. Call it whatever you want. But it’s a stamp out, right? And it’s a nice organized development, but there’s no one providing completely turnkey homes. Like Eri says to me a lot, like they don’t sell you a car without an interior. You don’t go buy a beautiful Mercedes or whatever brand you like, and it comes without an interior and you got to figure it out yourself.

I don’t know how many people on this phone have tried to do their own interior design or furnished their house. It’s a nightmare. It’s a nightmare for me, and I do it for a living. I have a house in the Napa Valley that I finished remodeling like 3.5 years ago. It’s not furnished yet. It’s that hard. It’s a pain in the ass. And so we know how hard it is. We know we’re good at it….

And I sit here and I go, well, why can’t we — we’re really good at architecture, really good at interior design, really good at landscape architecture. I know we can design and build things and furnishing that people will like. And I think there’s — if you think about people with money, okay, and you think about just what’s the most valuable asset, time, right? By far, the most valuable asset. Everybody on this phone can figure out — if you lose your money, you can figure out how to make more money. If you lose your time, you just can’t get it back, right? So we think a lot about businesses that deliver time value will become more valuable.

Four things stand out to me here:

  1. It is interesting to consider this in light of the increasing emphasis on staging properties. With staging, the design is more temporary but it gives potential buyers a vision for what the property could be. The option discussed above is more long-term.
  2. Generally, Americans act as though homes should be empty boxes filled in by owners to fit their tastes. When people buy homes, they customize them (within the confines of what is possible with the home) to what they desire and what they can afford. What if it could also work the other way around: a fully designed home shapes the owner as they come to grow into it?
  3. This highlights the mass produced nature of many American homes, whether they are McMansions are not. Particularly after World War Two, larger homebuilders started constructing more homes and buyers purchased them more like factory items. Straddling this gap from mass produced home to more customized home is not easy.
  4. I think he is right that there is a market for such homes. Yet, I imagine the market is fairly small given the price that would be involved. It is one thing to stage a home and then take those items back out; it is another to have a fully immersive design process and keep everything. For a business, I wonder what is the lower price point of homes that this makes sense for businesses (particularly if this is meant of more of a luxury product that is supposed to remain exclusive).


More on “showhome managers” living in Florida houses

The story of a Tampa area family reveals more about “showhome managers” serving as “human props” to help sell homes:

Filling vacant houses with stuff, the firm said, “enhances the focal points, softens age and minimizes flaws.” But adding in fake homeowners adds something else entirely, Saavedra said, turning quasi-spiritual: “There’s an energy there. You can feel it. There’s something. There’s life.”…

Showhomes pays moving costs but the Muellers pay the firm about $1,200 in rent, plus all household bills. Showhomes decorators decide where things should go, and managers are responsible for faultless precision, enforced by rigorous, random inspections.

All surfaces must be regularly cleaned; weeds eradicated, car oil spots removed. Clothes in closets are to be organized by color, and contestable items — heavily religious books, personal photos — must be removed or neutralized. Every item has a rule, and everything must be exact: the rotation of pillows, the fold of towels, the positioning of toothbrushes. Even the stacks of novels casually left on the bookshelf are placed and angled with pinpoint detail.

Gatherings of more than 10 people require approval, and managers must always be prepared for surprises. Dareda has raced across town to get the home “show ready”: lights on, soft music playing, Febreze Fluffy Vanilla subtly spritzed. She said, “You just think … by golly, we’re going to just go do what it takes.” A training manual states, “Our motto is ‘A SHOWING IS NEVER REFUSED.’ ”

Serving as the unseen caretakers for a wealthier couple they’ll never meet doesn’t bug Dareda, she said, because “when I live in somebody else’s home it feels like I already know them.” She points to one of the sellers’ last vestiges, the drapes that puddle at the floor, which she calls an old-style display of wealth.

This helps fill in some details I asked for a while back though I still want to know how much added value such managers add. How much does this lived-in energy increase the value of the home?

It will be interesting to see if this catches on more widely. It requires households willing to live scripted, temporary lives in homes as well as homebuyers who want to see a sort of neutral, upscale decor.

Staging a home can now include “live-in manager”

Staging a homeeven the Photoshop way – is important these days so perhaps it is little surprise staging can now include having a live-in manager:

At the Little Gables house, a home manager moved in late in April and plans to stay in the home until it sells.

The manager, David Hein, is from Ohio and living temporarily in South Florida so his son, David Hein, can train in a sailing campaign for the 2016 Olympics. The Little Gables stint marks his fourth house.

In exchange for managing the home, Hein gets to live there at a reduced rent — about one-third the market rate, Salas said…

The home manager’s responsibilities include keeping the home safe, clean and secure so that it is shipshape whenever prospective buyers take a tour…

The manager has to strike a balance: to make the home feel alive, with food in the pantry and refrigerator, but with everything as well organized as a Container Store display.

This would be an interesting kind of job/life: you get to live in a home that is probably in decent shape for cheaper but your home life is also a kind of performance intended to help sell the move and move yourself out. If is like house sitting but with the added burden of being a salesperson. If you are good at your job, you actually have to move around more.

It would be interesting to see the cost breakdown for the homeowner who is employing the live-in manager. Does a live-in manager add enough value to a home’s price to make it worthwhile?

Staging a home with photoshopped furniture and features

Here is a solution for empty homes on the market for a long time: photoshopped home furnishings.

With virtual staging, Spinelli said, she visits an empty house or one that’s in need of updating, draws on her designer talents to capture the most important rooms photographically, then stages them digitally…

One reality of selling in the digital age is that a large percentage of buyers sit at computers, sifting through hundreds of listings, to cut physical visits to a reasonable number…

“Not staging an empty house makes it look cold and less inviting, but not everyone in today’s market can afford the cost of doing so, especially when you add in the monthly expense of furniture rental,” said Schumacher, who has been using Spinelli’s virtual efforts for one of her listings, a $500,000 house owned by a couple who moved to North Carolina and left it empty.

“It is the electronic version of curb appeal,” Schumacher said, adding that activity picked up in the first three weeks of the virtual staging.

The cost is $198 an image, which comes with an unlimited licensing fee for use in brochures. On the Multiple Listing Service, the house must be identified as digitally staged.

Helping potential buyers see the home as it might be used is helpful. As one can see on numerous HGTV shows, some buyers have a really hard time seeing past the small cosmetic issues and what is possible in rooms. The furniture can help provide perspective on room size and also make a more bland room look sharper.

However, I was amused to see this story because I just saw an example of this the other day. The problem: the photoshopping was not done well and it made the pictures comical. Some issues like the lighting on the furniture versus the lighting in the room are difficult to handle (the furniture does seem to float above the floor a bit). On the other hand, if you are going to show two pictures of the living room, don’t reverse the furniture so it always faces the camera even as the angle changes. And then you wonder, are the kitchen appliances photoshopped (I don’t think so)? Can they photoshop bathrooms to show newer fixtures (which this house might need)?

Given the difficulties sometimes present in photographing homes for sale, I’ll be curious to see if this photoshop trend catches on.

McMansions are so big you need staging to define the rooms for potential buyers

A New York firm talks about why staging is needed in McMansions:

Staging is a concept that started on the West Coast, and was virtually unknown when Guest and Kramer started introducing it to real estate brokers 12 years ago.

“The advantage is huge,” says Guest. “People walk in to these McMansions. There are so many rooms they don’t know which one is used for what. Is this the family room? Parlor? Great room? We define it. It lets them see that they could live there.”

“We would try to explain to the real estate brokers,” says Kramer, “giving them figures and excerpts from articles in San Francisco and London. It was a difficult idea to sell to a seller.”…

But since then, times have changed. From the real estate boom to the recession that followed, house staging has continued to grow.

“The worst year for everyone was out best year ever,” says Kramer. She acknowledges that perhaps, as it gets harder to sell a house, people are willing to put a little more effort into the process. In addition, people have gotten more involved in the process.

McMansions are so large that people don’t know what to do with the space! Why not get prospective homebuyers maps or at least architectural plans in order to make it through the house! On one hand, this seems to reinforce some stereotypes about McMansions: they have a lot of unnecessary space and Americans, for some reason, really like to have that kind of space. I can imagine Sarah Susanka would have a good time talking about why people should go with smaller homes rather than have to have their spaces defined for them.

On the other hand, staging seems to be pretty common today across housing types. It can be difficult for homebuyers to envision what a space can become without a little help. What does it cost to stage the typical McMansion (let’s say between 3,500 and 6,000 square feet) these days? And what staging touches in McMansions work the best for selling the house?