When does a vacant home for sale, foreclosure or not, have that lived-in look? When someone is living in it.
Arnold and Mary Jo Baratz just moved into, but have no intention of buying, a sprawling 7,500-square-foot home in Wayne that includes a sweeping cherry staircase, an elevator and a two-bedroom coach house with its own kitchen.
The couple doesn’t need the space. In fact, with their youngest child headed to college in the fall, they had decided to downsize from their own 6,800-square-foot home in downtown Naperville. Unable to find something to buy before that sale closes, the Baratzes are, in effect, house sitters, living in the Wayne home, a bank-owned foreclosure that is listed for almost $1.7 million, at below-market rates.
“It’s expensive to carry (our) house year over year, and it’s a house we don’t need to be in, given a change in our circumstances,” Arnold Baratz said. “Looking forward at the cost to carry, we considered that if we stayed here another three years hoping that the market recovers, what is our return on investment?”
Companies that fill vacant for-sale homes with short-term caretakers and their attractive furniture, giving the property a lived-in but showing-ready look, have been around for more than two decades and continue to win new clients in a housing market that is, at best, limping along.
In a unique spin on that idea, and to try to get a high-end home off its books, New Lenox-based Town Center Bank agreed to give the concept of home-tending a try on the Wayne property.
“The whole notion of taking a beautiful home like that and just dumping it on the market is just dumb,” said bank President Andy Bernhardt. “It’s an absolute palace. I look at this the way I would sell my own house. I wouldn’t just sell it and say, ‘Get whatever you can for it.’ You’re doing a great disservice to your shareholders.”
The three local franchises of Showhomes, a Nashville, Tenn.-based home-staging company, are seeing more interest from banks as well as individual homeowners who are eager to set their better foreclosures and individual listings apart by showing how a potential buyer could live in their homes. And the best way to do that, it appears, is to put someone in the house.
“It has become a bigger part of the puzzle,” said Mike Callahan, a Showhomes franchisee in Batavia. “Once Fannie Mae starting fixing foreclosures (for sale), it was like a switch for banks.”
Becoming a home manager has become more appealing, too, particularly as executives who transfer into the area either can’t sell their own homes or, like the Baratzes, want time to investigate the market before making a purchase. But it isn’t for everyone because, as any home-tending company will explain, its job is to help get the home sold.
That means potential house sitters have to pass muster, and not just their credit and criminal background checks. Their furniture doesn’t need to be expensive, but it has to be tasteful and traditional in style to fit in best with the local market. People with pets need not apply. Nor should slobs. Home managers need to shoulder not just the rental cost but also the utilities, lawn care and snow removal. And people shouldn’t apply if strong-smelling cooking is the norm rather than the exception.
“We try to look for the clean-freak people,” said Steve Thomas, a Showhomes franchisee in Naperville. “The whole goal is to try and take the desperation seal off the home and add emotion to it.”
In addition to the rental income, home-tending companies typically receive a percentage of the sale price from the home’s owner when the property sells.
Given the state of real estate and the number of properties listed for sale, Baratz doesn’t think a sale will happen for a while, which is why he signed on to be a home manager.
“This is an opportunity for us to be in the market and looking for the perfect opportunity,” he said. “My goal is to be there for a year, and I know the bank doesn’t want to hear that.”