Epiphany...the Creative Endeavors of Shae Leighland-Pence

A recent article in Realtor® Magazine shines a light into the shadowy aspects of staging...

In a recent NAEBA member survey on home staging, 82 percent of the practitioners who responded said that buyers are likely to get distracted from important issues when viewing a staged home. And 51 percent said that staged homes often cover up real defects, including structural damage.  "Staging has taken the residential real estate industry by storm," the report says. "It has been the major focus of television programs and has been a dominant topic in real estate trade publications. However, up to this point, virtually all the shows and articles have been directed toward the seller’s benefits.'

  Is that true? To some extent...but the question gets complex, and I'd like to examine that. As a Stager, why would I want to help shine this particular flashlight into the darker recesses of the industry? There are several reasons. Here are a few of them:

1.      I am a Realtor® as well as a stager, and as such, must abide be a certain Code of Ethics.

2.      Number 1 notwithstanding, I have a personal set of ethics that needs to be heeded.

3.      As a Stager, my goal is to present a home in its best light, but never to cover any actual flaws.

4.      Part of my 'job', regardless of which 'hat' I am wearing, is to educate the public about the real  estate industry. Educated participants make for a smooth transaction.

With that in mind, I'd like to offer up some food for thought...

I am going to share some of my personal opinions and experience as an Accredited Staging Professional (ASP) and as a real estate agent, licensed in Virginia and the District of Columbia (and Realtor®). This is not legal advice, and nothing herein should be acted upon without checking with a qualified real estate attorney in the state where you intend to buy or sell.

Before I begin, take note that a real estate agent and a Realtor® are NOT the same thing. A real estate agent is an individual who has passed the licensing requirements to hold a real estate salesperson license in their state. A Realtor® is a licensed real estate agent who belongs to the National Association of Realtors®, which holds its members to a certain code of ethics. You can learn about this at the NAR web site.

In a similar fashion, some stagers are accredited, and some use the term without holding the credentials, or having the licensing rights, to do so. Stage® is a trademark of  StagedHomes.com, founded by Barb Swarz. If you engage a stager, ask about their training and credentials, just as you would ask your real estate agent about his or hers.

That said, it is important to realize that buyers and sellers have different responsibilities in a given transaction. Some of that is governed by federal and state laws. Many questions can be addressed to a real estate agent, but be advised that when it comes to legal advice, only an attorney can assist you. An agent’s job is to guide you through the home buying or selling experience, educate you, help you write an offer (or understand one, if you are the seller), and to negotiate on your behalf, i.e. assist you in either getting the highest and best price for your home in the shortest possible time (for the seller), or assist you in getting the best value (if you are a buyer). A real estate agent’s experience with the ins and outs of various stages of the transaction can help you avoid pitfalls. Beyond that scope, and legal questions need to be addressed to a real estate attorney. Often, your agent can assist you in getting that advice through the settlement attorney.

Why all the legal junk if I am addressing staging? Well, because the question of whether staging hides flaws touches on all of these areas. With staging gaining popularity, it becomes another reason to engage a real estate agent, so that you might have the benefit of their knowledge and experience. It also becomes somewhat of a legal question, with regard to the potential hiding of a known (to the seller, or stager) defect.

Staging is not meant to, and should not be used to, hide defects. If a homeowner has a floor that has damage easily concealed by an area rug, it is fine to demonstrate that IF (and only if) the damage is disclosed to all potential buyers. While the moral responsibility to do so certainly lies with the homeowner (and their agent), often the reality is Caveat Emptor: Buyer Beware. This means that it is a buyer's responsibility to check everything as thoroughly as possible, and ask a lot of questions. This is also a good example of why it is important to hire a knowledgeable Buyer's Agent, who can help avoid these pitfalls, and also to have a home inspection contingency. That said, it is important to hire a good home inspector. 

It is not a bad thing to show a home in its best light. Furnishings that make rooms appear larger, rugs that downplay ratty floors; these are things that can be good to show the prospective buyer, so that they see what the home can be, and how they, too, can minimize the cons and maximize the pros..just as long as the buyer is aware of it. But to use staging as a form of concealment of defects is not only a crappy thing to do, it is illegal in many jurisdictions. If you, as a homeowner, hang a curtain that hides evidence of water damage on a windowsill, then you need to disclose that damage clearly to every prospective buyer. Doing so in the form of written disclosures, which both the seller and buyer would sign prior to closing as part of the contract ratification, is the best way to ensure that everyone has all the facts. 

To get the best price for their home, in the shortest time, a seller certainly needs to show it off to its best advantage. While doing this, it is important to find out what the laws are in your state, and how they might affect you. This is a good reason to interview several real estate agents, and choose one to guide you through your selling experience. It is often a good idea to do this before you begin staging, although this is up to you.

When you bring in a stager, he or she may or may not have constructive knowledge of real estate transactions and their governing authority. Some stagers are one variety or another of interior decorator, which is fine, as long as you know this, and you are aware that you may need to do some homework, if that is the case. Some stagers, as I mentioned earlier, are ASPs. Some stagers are also real estate agents. Many of those are also Realtors®. Have I confused and overwhelmed you yet?

There are two major things to consider with regard to the question of how to stage a property that will help you decide the difference between hiding a defect and enhancing a feature, or alternately, minimizing an unattractive quality. There are the legal aspects of the matter, for which you need to seek professional advice (again, basic questions to a real estate agent, but actual advice on a legal question of your rights and responsibilities need to be asked of an attorney) and there are personal moral or ethical aspects. The latter will, of course, vary a great deal from person to person. To some degree, the latter can be addressed with ASP stagers and Realtors®, who both must adhere to a Code of Ethics that you may obtain a copy of, and therefore know and understand the minimum ethical conduct to expect from that professional.

Many real estate agents can offer you some basic staging advice, in that they can tell you what will and won’t show well, and give you some suggestions (which will also be influence by their personal style, to some degree) as to what steps you may want to take before you list your home. This is why I suggest starting with your agent. They can give you impressions as they apply to the real estate market in your area, whereas a stager (unless otherwise qualified) may lack some important expertise. Take those suggestions to your stager, who can expand upon them, offer alternatives, and point out additional things that an agent (unless otherwise qualified) may not have noted.

Stagers should certainly advise their clients of the need for disclosure of any defects masked by the staging, itself, but no law that I know of requires this, and many ‘stagers’ may not be aware of many pitfalls, legal and otherwise.

Staging is not meant to be a substitute for home repairs.Staging is not meant to be a substitute for home repairs. All necessary repairs should be made prior to staging; any that are not need to be disclosed (in writing). I say this based partly on the moral/ethical need, and partly on the legal one. There may be little or no legal need in your state, but it is up to you to get that information. Even if the legal need for disclosure is minimal, I would urge you to evaluate your own ethical stance, and to treat potential buyers as you would wish to be treated; fairly and honestly.

It is also important to realize the difference between defects and amenities, or lack thereof. A small room is not a defect; therefore, making a small room appear larger with strategic furnishings is not hiding a defect.  This said, it is always helpful to include the overall square footage, as well as individual room measurements, in the listing materials. If you are advertising a living room that is 15 x 15 feet, but it looks bigger due to furnishings, this merely demonstrates that a small room doesn't have to feel small.

A defect would be water damage on that window sill, or gouges in the wooden floor, holes in the walls, appliances that do not work, etc. Anything that could (and should) be repaired can be considered a defect. Upgrades, mind you, are not repairs. Let me give you two examples of an upgrade, and why it is not a repair.

1. Room size - the 'fix' for this would be an addition, or perhaps a renovation of the existing layout. Neither is a repair, but an upgrade. Therefore, the existing condition would not be a defect, but rather a lack of desired amenities (if the buyer is seeking a larger space). As long as a home is clearly advertised as what it is, with square footage and room sizes identified, there is no issue with any staging measures. If a buyer doesn't bother to weigh the data made clearly available, this is not the seller's fault (or the stager's).

Let's say the buyer thinks  the room is larger than it is due to clever staging, but the dimensions of the floor plan have been given to them in writing. They buy the house. They then move their possessions in, only to realize MawMaw's hutch doesn't FIT in the living room, when they'd assumed that it should. This is not something to chalk up to 'staging trickery'. This is an example of poor planning on the part of the buyer. If you know you have large pieces, then measure them and make sure what you are buying will accommodate. If you don't, then suck it up and admit it was your error.

On the other hand, if the dimensions and square footage were NOT give, and the house was advertised, let's say, as having "spacious rooms to entertain in," then you might have a legitimate beef, although it is still incumbent upon the buyer to do his or her homework. Size is not a flaw, whether disclosed or not.

2. Inefficient Heating/Cooling -  Let's say that you are buying an older home that has been nicely refinished. The HVAC is not new, but is also not terribly old. The seller has gotten a clean bill of health from an HVAC specialist, who has checked the system thoroughly and found no defects. You, the buyer, feel the upstairs rooms just don't get enough cool air. It must not be working properly, so you go back to the seller and complain, asking for it either to be 'fixed' or for a credit at closing so that you can have it fixed, yourself. The seller says that it is not broken, reminds you of the HVAC having been checked, and offers to let you have the HVAC specialist of your choice give it a second look. The culprit, as it were, turns out to be poor design, in that the fan doesn't push the air forcefully enough to get up to that second floor well enough (for your taste, in this example). Is this a defect? Not really. It might be poor planning, if the system isn't able to support the square footage; however, if the system is in good working order, this is not a defect that needs to be repaired, but rather a feature that could be upgraded. 

The buyer and seller can negotiate what they feel is fair, with regard to the (buyer's) perceived need for an  upgrade, and whether or not that should reflect on the price, but the seller is not obligated to make a repair when no repair is required. In my opinion (seek legal counsel if this happens to you) such a circumstance would not allow a buyer out of a contract with a contingency written based on defects, although this is a wide grey area. While this example doesn't pertain to staging, it helps illustrate the difference between what is, and what is not, a defect, and why that is important to understand that difference.

Each state has its own laws governing real estate transactions, which must fall under the federal laws governing same. Staging is not specifically addressed by any legislation that I am personally aware of, but aspects of it certainly are (such as with how a property is advertised, what is disclosed and how, etc).

Some states require full disclosure of all known defects. DEFECTS. Some states allow a seller to sign a Disclaimer, which in effect leaves it up to the buyer to discover defects, although most jurisdictions still require disclosure of a known defect, even when there is a disclaimer. See why this gets complex, and why several professionals may need to assist you? Certainly, many transactions go along without a hitch, and often a consumer can Google their way through the experience with no scars to show for it. But that, honestly, requires some good luck. Hiring real estate professionals is not unlike buying insurance…you may not really need it, in every case, but when you do, the cost of the insurance sure is less than the price of flapping in the breeze.

The bottom line is that buyers and sellers are still ultimately responsible for their own conduct, or lack thereof. While a seller should be honest and fair, a buyer shouldn’t take it for granted that a seller is either of those things. That is not to assume the opposite, but rather to put the onus of ‘buyer beware’ on the buyer, even in states that are not ‘caveat emptor’.

In today’s world, no one can realistically say they did not have access to the tools to research a question, or to find a professional to help them. While a seller should tell the buyer what they are really getting, to the best of their knowledge, a buyer should whip out his or her own flashlight, and look in the corners for themselves.

Staging a home is all about making the potential buyer say, “WOW!” This is true. But, buyer, after you say “wow,” get out your yardstick and your flashlight, call your agent and your home inspector, and get down to the business of knowing and understanding the product you are about to purchase.

And as a seller, a ‘stager’  may tell you to throw a rug over that gouged floor, may even say you should ‘hide’ it. They may or may not understand the legality of that, as it applies to you, but they ought to get the ethical grip that hiding and enhancing are not the same.

It comes down to this: if you are going to ‘hide’ a ‘defect’ (or flaw), make sure you let everyone involved know what you are doing and why. That’s my personal tip and request. If you’ve thrown a rug over that gouge, identify the flaw in writing, and have your agent verbalize it when showing the home…something like, “ I do need to point out a gouge is under this rug, but it is really easy to hide…and our price does reflect this condition.” You might even have a printout of a digital photo handy, so you don’t have to shove the carefully place furnishings out of the way to see the defect.

Read the NAEBA Report, and feel free to leave opinions, questions and comments.

{comment}