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Ask Our Broker LOOKING

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BEYOND THE
STAGING
Clean counters, neutral colors
and the elegant furnishings
may catch your eye, but don’t
I live in an up-and-coming let them distract you from the
polo/equestrian community. reality of living in a home

Is it wise to invest in the land? BY BARBARA BALLINGER

CTW Features
Q: I live near an area that has
IN RECENT YEARS, staging has
been dubbed the new Polo Capital
become an increasingly popular
of the World. It has some expensive practice to help homeowners
horse farms plus equestrian com- sell their houses – often faster
munities, polo farms, etc. Prices and for higher prices than they
have been going up like crazy would have without cleaning,
around there. de-cluttering and rearranging.
The strategy has attracted
I’m very interested in getting into this market,
enormous attention in the
if not to live, just to invest in some property. I media, with a number of TV
have a low budget (under $100,000) and the shows informing viewers how
prices run approximately $10,000 to $15,000 an to mimic professional stagers’
acre. Is this a good place to buy investment efforts of taking too-busy or
property? Should I buy a lot in a overly personalized rooms, as
well as empty ones, and making
community/subdivision (usually two to 10 acres)
them into universally appeal-
and just hold on to it (and pay homeowner’s ing, neutralized spaces that
dues) or buy undeveloped property and just more buyers can imagine them-
wait? selves living in.
But not all practitioners and
A: There is insufficient information to discuss a par- brokers are thrilled.A report by
the National Association of
ticular community or property, but let’s look at the
Exclusive Buyer Agents said that
general concept of buying land. some common staging prac-
You have a limited number of dollars. If you buy land
you will lose the interest you now earn on your cash, Extreme Expectations: Home Edition tices can influence a buyer in
purchasing the wrong home or
and if you finance you will have monthly mortgage one with defects.
costs. In addition, with raw land you will face property What to Expect When You’re Expecting a New Home “The whole intent of staging
is to get the buyer emotionally
tax and insurance expenses.
involved with the home,” says
At the very least, look at your local rental market. Jon Boyd, the 2007 president of
Would it make sense to consider rental properties? BY CHARLES SCUTT largest investments you’ll make in your lifetime, says NAEBA.“Our member agents
What about buying a two- to four-unit property, living CTW Features Ray.“For this reason, it’s critical that you research a want homebuyers to see things
in one unit and renting out the rest? With rental prop- range of builders, conduct interviews, obtain refer- logically.There’s nothing philo-

erty you get income and depreciation and if you live in
one unit you can get owner-occupant financing. Speak
with local lenders and brokers for specifics.
Q: Is the Supreme Court going to revise or
reverse its Kelo (eminent domain) decision? In
my state, property seizures by government are a
problem because owners are not being paid fair-
market value.
A: The “taking” clause of the Fifth Amendment per-
mits government to acquire private property for “pub-
lic use” but only with “just compensation” for the prop-
erty owner. For instance, when a new road is being
built, government must have some way to acquire
property along the route.As to the road, it is plainly for
public use.
The 2005 Kelo decision involved property owners
and the city of New London, Conn.The city govern-
See ASK OUR BROKER, Page 2
I
f you’ve made the decision to have a new home
built from the ground up, be prepared to feel a bit
like an expectant parent.You’ll want to monitor
progress by checking in for regular visits with the
professionals.The delivery date can come earlier or
later than anticipated.And you’re bound to feel a
range of emotions during the waiting period – from
giddy excitement to nail-biting uncertainty.
But, as with a pregnancy, so long as you head into
the new-home building process well informed and
with realistic expectations, you can count on a more
satisfying and less stressful experience, say the
experts.
For starters, it’s crucial to select the right builder
for the job. Many buyers opt to have a semi-custom
(tweaked from a set floor plan) or completely cus-
tom home built on an infill or teardown site of their
choosing, or they choose to erect a new home in a
subdivision or development where the builder is
featured.Wherever your chosen location, be sure to
choose a reputable builder known for quality crafts-
manship that meets your budget and shares your
vision for the finished product, says Michael Ray,
principal of The Housing Group,Atlanta.
“Building a new-construction home is one of the
ences and make sure you feel comfortable spending sophically wrong with staging,
the next several months working with them.” but buyers and others need to
Indeed, depending on the customization, size and be able to see past the staging.”
level of detail required, the construction process When NAEBA surveyed its
itself can span anywhere from approximately four brokers and practitioners last
months for a tract home up to 18 months or longer August, 82 percent of respon-
for a one-of-a-kind custom residence. dents stated that buyers were
“It actually takes a shorter amount of time to likely to be distracted from
build today, as many materials come pre-assembled important issues when viewing
and ready to install, whereas years ago materials a staged home.Among some
were assembled and even made on site,” says problems, the survey found,
Fernanda Forman, managing director at Bond New were sellers using small furni-
York in New York City. ture to make a room appear
Nevertheless, it’s important to brace yourself for larger, and covering up real
unexpected delays and costs, says Beth Lindahl, problems by using rugs atop
associate principal and project manager at Orren damaged floor or curtains to
Pickell Designers & Builders, Lincolnshire, Ill. conceal rotted window sills. In
“Unforeseen factors like soil or water issues, new short, buyers sometimes
framing conditions and weather are typically the focused on pretty furnishings
most problematic,” Lindahl says.“If it rains for many they thought they were buying
weeks, for example, this will slow down framing.” rather than the home itself.
Change orders, inspections, labor and lead time E.Adrienne Van Dooren,
for special materials also can extend the construc- author of “The House That Faux
See NEW HOMES Page 2 See GREAT FIND Page 2

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 STAGING
Keep your eyes peeled
CONTINUED FROM PAGE 1
Built” (East Cambridge Press,
2007), found that she was taken
in by staging.The prior owners of
her home had covered an uneven
dirt/mortar floor with heavy wool
carpet and concealed crumbling
plaster with wallpaper, and she
never questioned what was
underneath. Once the carpet was
removed, mold came into view.
Correcting the problems cost her
$8,000 and delayed her move-in
date. Her advice:“Don’t get car-
ried away by the staging.”
A conscientious practitioner –
or another pair of eyes – can help
keep potential buyers focused on
the house, even when the emo-
tional connection is powerful.
Gloria Roesch of New Idea Realty
in Council Bluffs, Iowa, had a
client who fell in love with a
home because of the staging.
“They had taken an empty house
and brought in everything –
leather sofas, a nice fluffy throw
on the sofa, beautiful dining room
table and great paint colors,” she
says.“I had to tell them,‘Let’s look
at the house.’They said,‘We love it
this way,’ but I reminded them
they weren’t buying the furniture
and instructed them to notice the
NEW HOMES
CONTINUED FROM PAGE 1
tion period from a couple of
weeks to a few months, Forman
says.
Additionally,“with the credit
crunch happening, many other-
wise financially sound developers
and builders are experiencing
shortness of capital funds, result-
ing in either delays or unfulfilled
obligations,” says Forman.“It’s
important for buyers to be very
vigilant and stay on top of the
process, particularly if things
seem to not be going as they had
previously or if major deadlines or
timelines are missed.”
Keeping an eye fixed on
expenses is important, too, as cost
overruns are not uncommon with
new construction, says Lindahl.
Some clients may spend as much
as 20 percent more than their
original budget, she says, with the
average being around 5 percent.
During construction, commu-
nicating regularly with the builder
and keeping tabs on the progress
of your future home is a must,
old windowpanes sealed with
duck tape and the missing wash-
er-dryer hookup.They might have
bought the house with a different
agent.”
And, of course, a seller’s disclo-
sure statement should detail any
and all problems, even if they’re
not visibly apparent, says Barbara
Wulfing, a practitioner with Janet
McAfee Inc. in St. Louis.
Nevertheless, some buyers get
fooled, distracted or simply
haven’t been through the buying
process enough to know all do’s
and don’ts. First-time buyers and
single homebuyers are particular-
ly vulnerable, the report found.
Also, many don’t grasp that stag-
ing, no matter how fabulous, can’t
add square footage, improve loca-
tion, enhance the quality of fix-
tures or construction, change a
floor plan, alter views or a neigh-
borhood, or increase the
appraised value, says Boyd.
“The good news for many buy-
ers is that the downturn in sales
has led more sellers to focus on
the condition of their homes and
make appropriate upgrades and
repairs before selling,” says Dan
Steward, president of Pillar to Post
Home Inspection,Tampa, Fla.
“We’ve seen a significant increase
in sellers conducting pre-list
home inspections in preparation
to sell,” he says.
Here are some additional tips
to help buyers place staging in
says Laura Meyer, a real estate
attorney in Los Angeles.
“With a project as big as the
building of a new home, it is rea-
sonable to expect communication
about how the job is progressing
on a weekly basis,” she says.“If
you’re dealing with a design/build
firm, you should probably talk to
the lead contractor or construc-
tion supervisor.There also are
times when there are multiple
people involved – an architect,
contractor and perhaps a design-
er – and you may have developed
more of a rapport with one per-
son or another. But if there are
concerns that aren’t easily
resolved, it’s imperative to com-
municate with the party with
whom you have the construction
contract.”
If there are any serious dis-
agreements, such issues your con-
tractor will not resolve,“then you
may need to consult with an
attorney,” Meyer says.
If you want to visit the job site,
keep in mind that different com-
panies have different policies
about this, depending on insur-
ance and other restrictions, says
Lindahl.
proper perspective:
• Focus on the house’s struc-
ture. Remember, you’re buying the
house, not its furniture, says
Christopher P. Ramey of The
Florida Luxury Marketing Council
in Coral Gables, Fla. Once the
house is sold, the furniture and
lighting usually go with it.You get
the floors, walls, ceiling, says
NAEBA’s Boyd.
• Be a bit paranoid regarding a
staged listing, says Ramey.Take the
attitude that any rug, chair, art-
work may hide something.“I’ve
seen people place rugs strategical-
ly to hide broken ceramic floor
tiles. It may not even be done
deliberately, but the homeowner
doesn’t want to look at broken
tiles,” he says.
• Try not to get emotionally
wrapped up in décor, even if you
love it.“Staging can trigger an
emotional response and cause the
uneducated buyer to become dis-
tracted,” says Craig Ackerman,
owner of Ackerman Realty Group
in San Francisco. Haley Hwang, a
sales associate with Coldwell
Banker Residential Brokerage in
Glenview, Ill., counsels buyers to
look at the reality – the home’s
location, lot size, floor plan and
whether the overall condition is
something they want to live with.
• If you love the looks, dupli-
cate them.“You can take a photo
and reproduce the look in the
house you buy,” Boyd says.
Janice Leis, associate broker of
Bocadelphia Real Estate, Boca
Raton, Fla., recommends arrang-
ing a construction site visit with
the builder and having a represen-
tative from the company join you
during the visit.“Or you can hire
an engineer to check on each
step of the new construction,” she
says.
When visiting the site or talk-
ing with the builder, however,“do
not be annoying,” Leis says.“The
more you pester the builder or his
crew, the less likely you are to get
a timely response.Write down
your questions or e-mail them so
you have documentation of the
time of the query as well as the
response.”
If you also have an existing
home to sell, it’s important to
carefully consider the timing of
that transaction, says Meyer.
“Some buyers will need to pull
out the equity from their old
home to finance the construction
costs for a new home and may
want to make sure the old home
is sold before they get into a con-
tract for a new one,” she says.
“Other buyers can handle the
costs and don’t want the
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• Be sure your salesperson or
broker pays close attention.“I’ve
developed my X-ray vision,” says
Max Dobens, associate broker
with Prudential Douglas Elliman
in New York.“I look through the
fluff and see all that’s really there
and point out things. I believe in a
long-range relationship and hop-
ing some day to be able to sell the
place, which will be harder if
there are problems.”A good
buyer’s agent must be constantly
on the lookout for the disguise,
pointing out anything and every-
thing that the seller may be hid-
ing, adds Barb St.Amant of Harry
Norman, Realtors,Atlanta.
• Be sure your salesperson
keeps their emotions in check.
Saying,“It’s beautiful” can be a dis-
service since it helps hook them
emotionally, Roesch says.
• Read between a disclosure’s
lines.“Sellers are required to
reveal defects in a written disclo-
sure – it’s the law,” says Moore.
• Hire a reputable inspector.A
home inspector should peel back
carpeting and look at windows to
be sure what’s adequately
installed or if there’s a leak in the
shower pan, says Moore.
• Always exercise your right
for a final walkthrough.With pho-
tos and carpeting removed, you
can see how good – or bad – the
house is,Ackerman says.
© CTW Features
upheaval of having to rent a place
or live with family or friends
before the new home is ready. In
this market, though, one has to
keep in mind that, on average,
homes are taking much longer to
sell than when the market was at
its peak.The conservative
approach from a financial stand-
point is to sell first.”
Lastly,“buyers should closely
consider the living conditions
they will encounter,” says Daniel
Greenspun of Wagner Real Estate,
Inc., Philadelphia.“While many
owners find it advantageous to
get in early on a new housing
development when the price is
affordable, what they are not con-
sidering is living in a neighbor-
hood that could be under con-
struction for the next few years.
For some, the money gained in
increased property value far out-
weighs any inconvenience of
building-material debris, early-
morning construction noise and
eyesores like waste containers
and portable toilets that may sur-
round their new home.”
© CTW Features
Ask Our Broker
CONTINUED FROM PAGE 1
ment condemned private property and then re-sold
the property to private developers, an arrangement
that the Supreme Court accepted on the grounds
that there was a justifiable “public purpose.”What
was that public purpose? Increasing the local tax
base.
Writing in dissent, Justice Sandra Day O’Connor
said that with the Kelo decision “the Court abandons
this long-held, basic limitation on government power.
Under the banner of economic development, all pri-
vate property is now vulnerable to being taken and
transferred to another private owner.”
The Kelo decision created immediate controversy.
Many states, as well as the federal government, enact-
ed legislation that effectively limits or reverses the
Kelo decision.Why? Because under Kelo a politically
connected developer who could not purchase a
home on the open market effectively could have it
bought by a pliant local government and then re-sold
to him.
The Supreme Court works in a deliberate manner,
and it may be years before the Kelo decision is recon-
sidered. Until then, the debate is a political matter
and you are best served speaking with elected offi-
cials at all levels of government to voice your views.
Q: An investment property bought a few
years ago has become a terrible problem. I
can’t rent it, the price drops every month and
the mortgage cost is set to escalate. I’m over 60,
own my house free and clear, and I don’t want
to fool with the investment property any
longer. What can I do?
A: If you’re age 62 or older you may be able to get
a reverse mortgage on your current residence. If suffi-
cient, the money from the reverse loan can then be
used to pay off the investment mortgage. Since a
reverse mortgage does not require monthly cash pay-
ments, the investment unit could be rented at a
below-market rate until (hopefully) the market
improves.
Or don’t rent the investment property. Instead, get
a broker to sell it and then use the proceeds from the
sale to pay off some or all of the reverse financing.
Since a sale might take some time, it will be easier to
hold the property if you don’t have to face the
monthly cost of a mortgage.
In other words, consider the use of a reverse mort-
gage to buy time, reduce cash flow and make the
best of a difficult situation.
For details, speak with reverse-mortgage lenders
and also get an attorney who specializes in elder law
to help with the decision making before you sign any
paperwork.
© CTW Features
Need real estate advice? Peter G. Miller, author of “The
Common-Sense Mortgage,” would love to hear from you.
Send your questions to peter@ctwfeatures.com. Due to the
volume received, not all letters may be answered.