According to research undertaken by Savills in September 2023 “average sales rates as reported by two major housebuilders dropped to 0.3 sales per outlet per week in August 2023, down from 0.6 in September 2022 despite many developers offering incentives to encourage sales.”
The research indicated that there were still two key buyer groups that were active in the new homes market. These were cash rich downsizers and budget conscious first time buyers.
The issues that are facing new build developers can equally apply to properties that have been converted or refurbished as they are all empty. This month’s blog seeks to address the challenges facing those who are marketing an empty property. If you have a new build, conversion or refurb, how would it feel if you could sell it?
Looking at Rightmove, there are more properties that are taking time to sell, at least in my local area. Now there can be any number of reasons why a property could be struggling to sell – the location, price or poor marketing, are just some examples. If you have a small development there may be one remaining property that is proving harder to sell or, if your property is a one off new build, a conversion or refurb, then it might have been on the market longer than you would like. Staging an empty property helps because it makes it easier for potential buyers to picture themselves living in the property. It helps them visualise the lifestyle they could enjoy if they buy it.
Discounts And Incentives
A common reaction to a lack of a sale is to offer buyers a discount or, in the case of a new build property, incentives (as mentioned by Savills above). Rather than a straightforward reduction in the price, sellers might offer incentives such as help with moving costs. Whether a simple discount or some kind of incentive both of these options obviously reduce the amount of profit that you make. Staging the property will involve an investment, but that investment is likely to be less than the amount of the discount that you offer.
One of the most serious consequences of a delayed sale for developers and investors is the impact on cash flow. A longer period of time on the market means that any finance continues over a longer period increasing the total payments and is a source of worry. It can impact on your ability to proceed to the next project. You may miss out on an opportunity that has arisen. Staging the property, by helping potential buyers see themselves living there, improves the speed of sale and therefore cash flow.
Increasing The Appeal
By furnishing and dressing your property, my staging service makes your property more visually appealing to potential buyers. Although when people are searching for a property, they will have a list of criteria that they want the property to fulfil, ultimately, buying a property is driven by emotion. If people fall in love with a property, then very often the criteria go out of the window. This is well illustrated by the programme Escape to the Country where, on many occasions, the participants fall for the “mystery house” which tends to be something completely different to what they have said they want. Sometimes people simply don’t know what they want until they see it, it’s very difficult for people to establish an emotional connection with an empty property.
Sourcing The Inventory
“Inventory“ is the term I use to refer to the furniture, soft furnishings and accessories that are used to stage a property. As a developer or investor, you very likely do not have the time to undertake this and/ or you don’t have the inclination. As a way of saving costs, investors who are aware of the benefits of staging may aim to do their own staging. However, they often underestimate the sheer amount of time and preparation that is involved in doing it and doing it well. I do all this for you so that you can utilise your time doing what you do best.
My service is tailored to each individual property and your target market. I will carefully consider what is best for that property. Accordingly, the inventory may be entirely purchased on your behalf, provided by me on a rental basis, or part rental and part purchased. I have the flexibility to provide a bespoke solution to meet your needs and budget.
I aim at all times to be professional in my dealings with the client and third parties, such as suppliers and any tradespeople. Having worked in the legal profession and estate agency and moved several times I have a very good understanding of the whole process of selling and buying property. The experience means that I am aware of the need for reliability and customer service.
I see myself as part of your team working alongside you, your employees and third parties that you are working with. This means that I aim to work with you and not as a separate individual. I am able to introduce other professionals such as estate agents, solicitors, mortgage and financial advisors who might be elements in the whole sales process.
How frustrating is it not to be able to get hold of people when you need them or to have people not turn up when they say they will? On my last renovation I had spoken to a tradesperson on the phone early in the morning and made an appointment for later the same day. They failed to turn up or contact me in any way. I pride myself in doing what I say I will. Before making any commitment I will ensure that, as far as possible, I will be able to keep it.
People fall in love with a show home so take advantage of it. An added benefit of staging an empty property is that it can present you with the opportunity to gain additional revenue. You can offer the inventory as a package, either in total, or in part. That package might even include a mark up, so that not only do you recoup your investment in the staging but recover more.
For developers and investors, a property that hasn’t sold is a headache in a number of ways. It may result in a price reduction or the offering of incentives and it impacts on cash flow. Empty properties are harder to sell because many prospective buyers struggle to visualise themselves living there and it’s harder for them to make that emotional connection. Staging the property to create the show home feel can make a real difference. Sell the dream.
Image Credits (various- Raymond Jones and Martin Hambledon)
If you would like to learn more call me on 07745 876182. I cover the Wirral, Cheshire and North Wales