REPOST: 7 Tips For Buying a Vacation Home

It may be a smart idea for Americans to start hunting for their dream vacation homes now that the country’s housing market has stabilized. TIME.com offers the following tips to help buyers find the best vacation houses within their budget:

Image Source: time.com

You may be tempted to finally buy that vacation place now that the housing market has healed. Here's what to consider before you start house hunting.

Many Americans contemplating a vacation home abandoned that dream when the housing market collapsed. But now that home values have climbed month after month, with the median price up about 20% since its bottom nearly three years ago, you may once again be toying with the idea of that lakefront, ski or beach getaway place. About 13% of homes purchased last year were intended as vacation homes, up from 11% in 2012, according to the National Association of Realtors.

Yet you shouldn’t let the fact that the market has stabilized drive your buying decisions. Instead follow these seven steps to take to make sure a vacation home is right for you, and won’t turn out to be an expensive headache.

1. Choose the Location Carefully

This may sound obvious, but before you start shopping you need to be able to specify why exactly you want this second home. The answer should shape where you look. For example, 87% of vacation home purchasers in 2013 planned to use the property primarily to getaway with their families, according to the NAR. Thus the typical home purchased was an average 180 miles from the buyers’ primary residence.

If the main purpose is for you and your loved ones to gather together and enjoy the house as a family, you’ll need it to be in an area that is easily accessible for everyone, and that offers plenty of activities for different age groups. While you may think jumping on a flight to Florida isn’t a big deal, elderly grandparents or parents of small children may disagree.

Buyers who plan to rent the home to others- as 25% of purchasers do- may want to choose a location with numerous seasons of rental demand, so you aren’t limited to income only, say, three months of the year (likely when you want to use the home too). When you’re viewing the home as an investment property you’ll also care more about projected growth rates of the communities you’re considering, as well as the health of the local economy.

2. Rent Before You Purchase

Before you lock yourself in, rent a place (more than once is best) in the area you’re considering to be certain you’ll actually enjoy it. Stay for at least two weeks to make sure you don’t grow bored on extended stays.

Try to visit in different seasons to understand weather and crowd patterns. For example, you may realize that you hate needing to book a dinner reservation well in advance during the summer busy season, when you’re there to relax.

Or if you plan to eventually move to the home full-time, as one-third of buyers do, you may decide a house outside of town is actually too lonely and inconvenient. Only 32% of vacation homes purchased last year were in a small town or rural locale.

You’ll also learn what part of town you prefer. For example, in Orlando vacation homes are spread out throughout the city, but you may prefer the shops and restaurants in Kissimmee over Davenport.

3. Buy Under Your Budget

Don’t fall into the trap of purchasing a property that is a stretch to afford. Buying a house with too high of monthly carrying costs causes stress, and most people go on vacation to getaway from troubles. It also means that if you eventually decide you want to hire someone to manage the place, or care for the yard, there won’t be any wiggle room in your budget to afford it.

Keep in mind that you can always upgrade to a bigger house down the road.

4. Be Realistic About How Often You’ll Use It

My wife and I have three kids. When they were young we bought a vacation home near our house. We used it all the time. As the kids got older, though, we visited the house less and less. Weekend sports games, friends sleeping over, and church and school activities left too little time to get there.

Be realistic when you make assumptions about how often you’ll actually be able to use the place. You may be better off working out a rental agreement with an owner in the area to use his or her place two or three times a year- and forget about the place when you’re not there.

5. Understand the Tax Implications

Don’t assume you know what the tax consequences of owning that property will be, based on your experience with your primary residence. Second homes can be more complicated.

If you are going to rent out the property, you will need to pay income taxes on the rental income you receive. Your property taxes may also run higher than what you pay now, either because the tax rate in the vacation area is higher than where you live, or because its a second home and not a primary residence. For example, the taxes on second homes in Florida are usually much higher than for primary residences.

A qualified real estate agent should be able to provide details about taxes in the area, and possibly even tips on ways to save, such as buying just outside the city limits.

6. Make a Conservative Estimate of Rental Income

Most buyers tend to be overly optimistic about how often they’ll rent out the place. Talk to a local vacation rental agency about how many weeks of the year you can realistically expect demand. For example, even in a winter and summer destination such as Lake Tahoe you can’t expect to fill the place every month of the year.

You also need a realistic estimate of how much expenses will eat into that income. Presume repairs will cost about 1.5% of the value of the house. So for a $100,000 place budget for at least $1500 a year in repairs. Each year the tab might be higher or lower than the estimate, but this rule of thumb will give you some flexibility from year to year.

Similarly, find out ahead of time what your home insurance tab will run, since second homes are often in hurricane or flood areas and thus pricey to insure, and also may cost more simply because they are empty more often.

7. Don’t Get Caught Up in the Moment

If a friend, family member or another investor brings you an opportunity to buy a vacation home, or to acquire land with aspirations of building a grand home, don’t let yourself be easily persuaded. The proposal can sound romantic but quickly turn into a horror story. Sometimes people have alternative motives. Other times they haven’t actually done their homework to uncover that the so-called deal isn’t really a good one.

So slow down, take your time — and do your research. Move forward only after you have thoroughly run the numbers yourself. An opportunity that turns sour will eat up your money- as well as your precious vacation days.

Marian Khosravizadeh is a realtor at Woodland Hills Real Estate Services in Los Angeles, California. Visit this blog for more tips on buying and selling real estate.

REPOST: Who Will Step Up and Disrupt the Real Estate Industry?

Digital technology continues to revolutionize industries, including hotel market and transportation sectors. Will the real estate industry follow suit? Brenton Hayden, founder of Renters Warehouse, discusses in his article for Entrepreneur.com why this is a likelihood in the near future.

Image Source: foglers.com

In the last decade we’ve seen countless so-called “disruptive” innovations emerge, bringing with them tremendous change.

New technologies continue to revolutionize our world, and along the way they inevitably render many industries obsolete. Just take a look at what digital content did to Blockbuster.

As another example, look no further than Uber, the 5-years-young transportation network that is revolutionizing the taxi industry. In its last round of funding, Uber raised a remarkable $1.2 billion on a pre-money valuation of $18 billion. Its estimated worth is today almost the equivalent of Hertz and Avis combined. Uber’s focus on fast and seamless transportation is helping to drive this company forward and the result is that it’s pushing traditional cab companies to keep up, or give up.

Just as Uber is changing the taxi industry, and web-based companies such as Airbnb are disrupting the hotel industry, the real estate industry is another industry that’s vulnerable to information-driven disruption.

It is very likely that the real estate industry will be one of the next industries to be hit by the changing tide of the digital age, here’s why:

A diminishing value proposition.

Diminishing value is something that’s been slowly creeping into the real estate industry for some time now. There’s less of a need for real estate agents who exist solely to provide consumers with information already available to them via Zillow. If it’s just about opening the doors for home showings, this is something that surely doesn’t warrant their 6 percent commission.

Image Source: prweb.com

The need for real estate agents that don’t provide anything of true value is diminishing rapidly. This isn’t to say that real estate agents aren’t needed. They certainly are. Knowledgeable and professional agents offer a wealth of value. However, a differentiator that separates the wheat from the chaff is long overdue. This will allow the real estate agents who are worth their weight in gold to have a chance to shine.

Outdated methods: the way of the travel agent.

Many of today’s real estate agents still rely on outdated marketing methods and archaic business models. They think that hanging a sign on the window is the best way to draw in new business. And while these methods do still work -- to some degree -- the fact is that the first signs of change are in the air.

The younger crowd knows that the first place to go for information is the Internet, and companies are cropping up all over to accommodate this need. A quick online search will show you which properties are for sale in your area and what they are worth. Often, the consumer is privy to this information before the real estate agent.

An industry that’s ripe for change.

It’s time for a change. Take a look at the real estate industry, and you will see that this industry is one that has grown complacent. Even though technology and consumer acceptance have grown, with instant information access, and consumers becoming more comfortable with the idea of selling their own homes, the real estate industry has struggled to keep up with the changing tide. In short, this industry is waiting for the right innovation to come along and turn it on its head.

Who will step forward?

New, potentially disruptive technologies such as automated agent selection and virtual home staging are all happening. These innovations are not quite yet at the level to overtake the industry though.

Zillow’s planned acquisition of Trulia has everyone wondering whether this company has big things in store for the industry, but that remains to be seen.

What does this mean for the industry?

What does this all mean? Simple: that the smart entrepreneur who addresses the pain points in the real estate industry and asks the age-old question “is there a better way?” just might be able to come up with an idea -- or an app -- that will help to make life easier and better, and in the process, inject real change into the real estate industry.

Image Source: inewmedia.org

While the full impact of the digital revolution on the real estate industry has yet to be seen, there is a strong movement towards empowering the consumer. With people being able to access the data that they need to make more informed decisions, it’s scaling back the need for the less informed middleman.

Smart real estate agents will embrace these technology advances and use them to survive, while others will woefully cling to their brochures and rolodexes, lamenting that the old ways are better because that’s the way that things have always been done. Unfortunately though, as history has shown time and again, nostalgia is rarely a good business model -- no matter what industry you are in.

What do you think? Is it time for the real estate industry to be disrupted? Which technological advances do you foresee in the near future? Share your thoughts in the comments sections below.

Seasoned realtors such as Marian Khosravizadeh have seen how the property market has evolved through the years, and how recent developments have changed the industry for good. Follow this Twitter account for the latest real estate news and updates.

REPOST: The 10 Hottest Los Angeles Neighborhoods For House Flipping

House flipping is the act of buying a property and renovating it with the intent of selling it for a profit. According to Curbed, Los Angeles had the highest number of flips in 2013 and 2014 combined. Check out the hottest L.A. neighborhoods for house flipping below.

Image source: curbed.com

Flipping is back and it's more insane than ever. Unlike the pre-recession years, when amateurs ruled the scene, today it's professional investors snapping up all the houses and driving up prices. Listing site Redfin found that Los Angeles had the highest number of flips in 2013 and 2014 (so far) combined. (RealtyTrac previously found Los Angeles had the third most flips between April 2013 and March 2014.) And these aren't just little shacks in crappy neighborhoods—there are so few cheap houses in LA these days that flippers have started moving into the higher-end of the market and it's paying off with huge gains. The average flip in 2013 made $126,100; that's the sixth highest market in the US (following Bay Area cities, Long Island, and Boston) and far above the nationwide average of $90,200.


Redfin also broke out the flip markets with the highest returns in the country in 2013—up-and-coming Mid-City and Mt. Washington were number four and five, respectively. Ever-gentrifying Highland Park of course made the list at number 12 and Leimert Park, a great but often overlooked neighborhood that happened to find out last year that it'd be getting a light rail stop, was at 24.

Image source: curbed.com

Image source: curbed.com

Image source: curbed.com

Woodland Hills Real Estate Services realtor Marian Khosravizadeh uses her extensive knowledge of the real estate market to help both sellers and buyers reach the best possible deal for each transaction. Follow this blog to be updated on the latest trends in the real estate industry.

REPOST: 5 Ways Big Data Is Changing Real Estate

Big data is finding big applications everywhere, including real estate. James O’Brien of Mashable describes the benefits to be gained in bringing big data to the real estate industry.

Image source: Mashable.com

Real estate has traditionally been a game won or lost based on old-fashioned networking and shoe-leather style hard work — deeply dependent on timing, detecting trends and more than a little bit of luck.

It may not be that way for much longer, however. Big data is changing the way real-estate professionals, buyers, sellers — and even banks — think about transactions involving property.

On one hand, companies promoting services that plug consumers into big data real estate info are heralding a future of better education and insight. On the other hand, real estate professionals are questioning whether big data algorithms can replace the human-wisdom side of property sales. Other players have points of view on the changes underway as well. Analyzing enormous swathes of information — much of it aggregated from disparate places and formats — big data proposes that accessing the patterns locked up in a myriad of real-estate info could remake the game. And so, let's look at five key facets — the people, organizations and trends — of real estate's ongoing big data evolution.

1. Democratizing data for the real-estate consumer
If you want to identify the kind of platform that's emerged to combine big data with real estate, one way is to look to Zillow and companies like it.

"We’ve moved from raw data to information and context, and finally to real, actionable insight," said Stan Humphries, chief economist at Zillow, during a phone interview. The company aims to "create complete transparency of real-estate info," Humphries said. "We not only want to create complete transparency but also analytics products."

Analytics is where raw data and the algorithms that crunch it come together. Mining census information, the results of consumer surveys, listings of homes for sale and rent, geographic information systems data and more, companies such as Zillow, Trulia, and Redfin, among others, offer similar services — combine what they draw from numerous databanks with their own proprietary user-generated content. The tools can deliver to consumer’s information about their property's potential value and help them understand home-value trends within a particular milieu, such as a neighborhood or a ZIP code.

2. Better understanding communities
Big data isn't just providing new information to consumers, it's fueling new ways of looking at developments and community planning. For example, the Hudson Yards project, in Manhattan, stands to create a new bank of commercial and residential units. But it could also be a big data engine. A proposal by the developers and New York University is on the table to equip the planned spaces with sensors that would track air quality, traffic, energy use and much more.

From that gathered information, real-estate developers stand to learn what kinds of spaces work best in terms of tenant health, energy efficiency and other points. Meanwhile, researchers would get to build sociology and civil-engineering projects around the data. If privacy matters are handled properly in the process, it could be a win.

3. Investors and banks: Foreclosure and short-sale changes
Beyond the consumer and industry-facing aspects of big data, institutions such as banks can plug into big data resources to determine whether a foreclosure or short sale is really worth what a buyer or investor might be offering.

"Banks are much smarter now than they used to be," said Phil Pustejovsky, a real estate investor and author, in an email interview. "Banks use big data in a big way to ensure they don't sell their properties for one penny less than the market will bear. As an investor, we all but avoid foreclosures and short sales these days, in most cases, because big data has given banks so much insight into value that they now expect to get full value — which removes smart investors from the equation."

4. Roles of real estate agents
Deeply empowering consumers is good for the consumer, perhaps, but casting into question some of the basic underpinnings of the real-estate industry — a human agent who knows a community's ins and outs — isn't the first choice for professionals who've made their living by using their brains and instincts about property sales.

"As a tool to help start your property search, big data sites may be useful," said Jim Esposito, of Fort Lauderdale Real Estate. "However, when you seriously start to focus in on an area or a neighborhood, you really need a local agent who is plugged into the local Multiple Listing Services to give you reliable information."

Agents maintain that big data delivered valuations can come in too high. One result, sellers can have unrealistic expectations about the likely price of their home. Likewise, agents warn buyers could get into a new home for more money than they might have otherwise paid.

"Buyer beware," said Jerry Pinkas, of Jerry Pinkas Real Estate Experts. "An expert real estate advisor knows what recent sales have been, what developer incentives are offered, and inside secrets to getting the best deal. The Internet is a good place to start, but you always want to work directly with an expert working in your best interest to get the whole story before buying. It's the shortcut to success."

5. Boosting pitches
Other real estate professionals are using big data themselves to work the market in refined ways.

"Big data lets us know what visitors are doing when looking for real estate online … and we adjust our paid and organic efforts based on this data almost daily," says Glenn Phillips, CEO of Lake Homes Realty, regarding online marketing of his inventory. "We process data from multiple sources, stripping it down to just the niche we serve. It is this large dataset that allows us to provide true convenience to the buyers and sellers."

And Phillips says he's aware of both sides of the developing big data equation for real estate.

"It will become increasingly difficult for individual real estate agents to be visible to consumers, both online and offline, as the consumers follow the larger data sources online," he says. "And those with big data have more information needed to rank higher in online searches. This is, in most cases, a win for the consumers, but not for individual agents trying to be noticed by new clients."

It is almost certainly the future that is unfolding, however. For real estate, big data seems set to fuel what is to come, one sale at a time.

For more on real estate buying and selling, visit this Marian Khosravizadeh blog.

REPOST: 7 neighborhood details you may be ignoring

A good-looking place isn’t enough of a consideration when looking for a new home. Virginila MacGuire of Trulia lists and discusses seven often overlooked important details that buyers and tenants need to pay more attention to when house hunting.

Image Source: realestate.msn.com

You've checked out the schools and read neighborhood crime statistics. You've timed your commute and figured out where to buy groceries. But what are you missing when it comes to evaluating a new neighborhood?

Don't forget to check these seven neighborhood details before you sign a lease or buy a home.

1. Where will you go to have fun?
It's natural to focus on proximity to your job when you're looking for a place to live. After all, you probably travel between home and the office more frequently than you travel anywhere else.

But don't forget to think about your downtime. Does the new place offer easy access to your favorite hobbies? Will you have to drive further in rush-hour traffic to get your kids to their after school activities or get up earlier on weekends to get to your favorite hiking trail? Make a list of the places you go most often to relax and make sure getting there from your new home won't take all the fun out of it.

2. Read the fine print
Hidden in your community bylaws, there might be rules on what you can and can't do with your new home. The covenants, conditions and restrictions, also known as CC&Rs, govern things such as whether you can paint your house, put up a satellite dish, keep a vehicle on the street or store a boat. Make sure you understand all fees imposed by the community association and factor them in when you're figuring out how much rent or mortgage payments you can afford.

3. Homeowner's association and property manager
The property manager or the homeowner's association will make a huge difference in your quality of life. You can look for obvious signs of their management abilities, such as whether the building is kept in good repair. But a more thorough search may be warranted. If the property is managed by a large company, you may be able to find ratings online. Talking to neighbors can be useful, and you might try searching the online archives of your local newspaper to see if the HOA has received any press — good or bad. Problems with the HOA may explain suspiciously low rents, and you want to know if the HOA has declared bankruptcy or imposed a special assessment on members.

4. Taxes and insurance
If you're moving to a new area, you may not be aware of the differences in taxes from one municipality to another. Property taxes can change dramatically when you cross a political border such as the city limits or the county line, and some cities charge local income tax on top of what you're already paying to the state and the federal government. Car insurance may also be higher depending on where you park at night, so talk to your insurance company and your accountant before you make an offer or sign a lease. You don't want any expensive surprises.

5. Connectivity
Property listings usually tell you what kind of sewer and water access you'll have, but you may not think to check for other types of utilities. Will you be able to get high-speed internet access in your new home? If you work from home, reliable internet access and phone service is a must. You may also want to find out what cable companies provide the best service in the area. Cellphone reception has improved a lot in recent years, but pay attention to how many dropped calls you experience in your potential new neighborhood. You may find that you need to get a new carrier along with your new address.

6. Light and noise
The basketball hoop in the cul-de-sac seemed like a great indicator of a kid-friendly community when you were house hunting. But it's not so charming when the neighborhood teenagers are shooting hoops late into the night. If you're sensitive to noise or light, look around with an eye toward protecting your sleep. Busy roads, bus and train routes, bars and restaurants, street lights — if you love to be in the thick of things, you may be thrilled by the activity. If you're a light sleeper, you may want to invest in a white noise machine or find another neighborhood.

7. Walkability
Being able to walk to a cafe, a library and a grocery store will save you money and keep you healthier, so don't forget to check the Walk Score of your new address. Who knows? Maybe you can do without a car altogether. If you're moving to a rural area, you can still think about potential walks from your home, but instead of walking to the bakery on a Saturday morning you may be walking across a field to have a cup of coffee with a neighbor, or walking to your favorite bird-watching spot in the woods. Take it a step further and look for bike lanes. A good network of bike lanes and well-kept sidewalks indicates a local government that is willing to invest in the health and safety of its constituents.

Learn more about real estate in Woodland Hills and Los Angeles County from realtor Marian Khosravizadeh’s website.

REPOST: 10 most expensive markets for real estate

If you had a million dollars, you’d probably consider investing it in real estate. This amount could likely get you a decent property in a nice neighborhood, but in Monaco, this will only land you 15 square meters of space. USA Today highlights some of the world’s most expensive real estate markets.

To most people, New York City has become an otherworldly real estate market. It's the town where a sky-rise condo just sold for more than $50 million—and it was only that cheap because it was raw space.

Image Source: www.usatoday.com

But to the global rich, New York is a bargain.

A new report shows that on a per-square-foot basis, New York is half price compared to some other favorite cities of the rich.

The Knight Frank Wealth Report shows that the tiny, tony principality of Monaco remains the most world's expensive real estate market. The report found that $1 million will only get you 15 square meters of space, or about 160 square feet. So you could buy a $1 million bedroom—and presumably share a bathroom and kitchen with other property-poor millionaires.

In New York, that same $1 million gets you a whopping 30 square meters of space, or about 430 square feet. That puts New York down at number six on the list, below Monaco, Hong Kong, London, Singapore and Geneva.

"New York is a definite bargain from the global marketplace perspective," said Dolly Lenz, founder of Dolly Lenz Real Estate in New York. "It's not a bargain from the perspective of New Yorkers who have seen the prices quadruple over the past 20 years. But the wealthy look more globally, and when they compare these cities, New York is great value."

But the report — done by London-based real-estate firm Knight Frank along with research firm WealthInsight — had other interesting tidbits when it comes to the global wealthy and real estate. They include:

Biggest price gains. The city that had the biggest price increases for luxury real-estate was Jakarta, Indonesia, with prices up 38% for prime, luxury real estate. Auckland, New Zealand, ranked second, at 29%, while Bali, Indonesia, ranked third, with prices up 22%.

The darling of the rich. London is the favorite city of the rich. The study ranks cities by their attractiveness to the rich based on four criteria: economic activity, quality of life, knowledge/influence and political power. London ranks first in the world, followed by New York. The two cities always dominate the top of the list (they are like the Bill Gates and Warren Buffetts of rich cities), and they are basically tied.

But, the study projects New York will eventually retake the lead.

"History, location and their long established wealth mean that London's and New York's positions remain unassailable," the report said, adding that New York will soon get an edge from political power and economic activity.

The skyscraper index. Knight Frank also ranks skyscrapers by the capital value of upper-story floor space. Hong Kong ranks first, with a value of $69,222 per square meter. Tokyo ranks second, with around $40,000 per square meter, followed by New York at around $25,000.

Mariyan Khosravizadeh is a Woodland Hills realtor serving sellers and buyers around Los Angeles County. Visit this website to find out more about her work.

REPOST: 'Haunted' real estate signs in New Orleans are grabbers

Known to be one of the most haunted, if not the most haunted, cities in the country, New Orleans have scared away most of its potential real estate buyers.  Read this article from USA Today to learn about what an estate broker did to turn the city's reputation to their advantage.

Image Source: www.usatoday.com

A New Orleans real estate broker has been getting lots of attention since actor/director/comedian George Takei posted a photo on social media Monday of a real estate sign reading "Not Haunted."

On Monday, when Takei posted a photo on his Facebook fan page of a "For Lease" sign from Shelnutt Real Estate indicating that an apartment for rent was "Not Haunted," more than 121,000 people "liked" the post and more than 23,000 shared it with others. Some readers shared their own photos of the Shelnutt Real Estate signs advertising apartments and condominiums, with one side of the signs indicating the properties are "Haunted" and the other side reading "Not Haunted."

Hundreds of people called the company, many just to see if someone would answer, and the media came calling, says company owner Finis Shelnutt.

Takei could not be reached Monday night.

The signs are an apparent reference to New Orleans' unofficial title as the most or one of the most haunted cities in America.

In addition to the hundred or so telephone calls, Shelnutt says he also was a guest on two radio programs after the Takei posting.

The real estate signs are not so much an indication of whether potential renters and owners can expect to have see-through roommates, but more a joke to drum-up business, Shelnutt says. He says he thought what better way to edge out the competition than with creating a buzz about ghosts. All the signs say "Haunted" and "Not Haunted" because Shelnutt was once a bond broker and believes in hedging his bets, he says.

"Ghost tours is a very large business in the (French) Quarter – very large. I mean extremely large. You can't imagine," Shelnutt said. "Thousands of people a night doing ghost tours. It's, like, real big."

Shelnutt should know. He also is owner of French Quarter History & Ghostbuster Tours, a company that offers walking tours of French Quarter haunted spots.

This chapter in the life of the realtor/ghost tour guide in his late 50s is just one in a number of noteworthy tidbits. Shelnutt was married for nine years to Gennifer Flowers, the model and actress who said she'd had a relationship with President Clinton.

Shelnutt, a Little Rock native, says he wasn't always a complete believer in the spirit world "until we started doing these tours and it gets really bizarre," he says. "Every night, someone will pick up orbs," Shelnutt says, referring to white circles sometimes picked up in photos that some paranormal experts say represent ghosts.

Now, Shelnutt says he has seen so much – including a frequently swinging trash can lid in his kitchen – that he believes the eight properties he has listed are haunted.

"I think all of them are," he says.

As for Takei, he has been busy in his post-Star Trek days developing his talents as a social media star. His Facebook fan page has generated more than 6 million "likes" and the funny photos and memes with commentary that he posts daily get shared thousands of times.

Realtor Marian Khosravizadeh is connected with Woodland Hills Real Estate Services. She specializes on serving clients who are looking for real estate opportunities in Los Angeles County and its surrounding communities. Learn more about buying and selling homes here.

REPOST: Home Staging Effect? Not Much.

How effective is home staging? A recent study finds it really doesn’t have that much impact on a home’s sale price. Additional details of the study's findings are featured in The Wall Street Journal article below.

How much does a tacky purple wall color affect a home's sale price? Not much, according to new research on home staging.

Option 1: Some study participants saw a home rendering with ugly purple walls and mismatched furniture. (Image source: wsj.com)

While good staging does influence a home buyer's overall impression of a house, staging alone doesn't result in buyers willing to pay more for the house, says Michael Seiler, professor of real estate and finance at the College of William and Mary, who researched how home buyers responded to six house tours that varied in paint color and furniture quality.

His findings show that buyers are willing to pay roughly $204,000 in each of the house examples, regardless of the quality of furnishings or paint color. However, the research subjects believed that other buyers would adjust their pricing based on how the house is staged.

"We were able to parse out what you consciously believe and subconsciously believe," Mr. Seiler says. "Beforehand, everyone thinks poor staging is going to be a problem. But when we actually did the experiment, we found it doesn't matter."

Option 2: Other participants saw a rendering of a room with neutral paint color and matching furniture. (Image source: wsj.com)

Mr. Seiler and co-authors Mark Lane of Old Dominion University and Vicky Seiler of Johns Hopkins University led 820 home-buyers through one of six virtual house tours in March 2012. Using professional-grade rendering software created by an architecture firm in Virginia Beach, Va., each house featured either a "neutral" beige wall color or an "unattractive" purple paint color, and "good" furniture, "ugly" furniture or no furniture. The neutral and attractive options were chosen to appeal to the greatest number of people, Mr. Seiler says. The home buyers then reported what they would be willing to pay, as well as their overall impression of the house.

Still, Mr. Seiler warns: "All we could test is how much the home would sell for. What we don't know is whether a well-staged home will sell faster. It may sell quicker."

The study, "The Impact of Staging Conditions on Residential Real Estate Demand," has been accepted by the Journal of Housing Research for publication sometime next year, he said.

Image source: wsj.com

It may be hard to persuade real-estate professionals of the findings.

Doug Eichman, a real-estate agent with Core in New York City, spent more than $30,000 to stage a Midtown East penthouse co-op listed for $6.995 million. His stager, Cheryl Eisen, president of New York City-based Interior Marketing Group Inc., says staging works when buyers feel emotionally connected to the house.

"The bare-bones reason for staging initially is to show buyers how they can function in a space," Ms. Eisen says. "When you go over the top, you make them have an emotional reaction to the space. If they fall in love with the space, they will be willing to pay for it."

Darci Willis, a real-estate agent with Century 21 Scheetz in Carmel, Ind., says that when potential buyers are on the fence, a well-staged home may be a deciding factor.

"Even though people logically know that they can change the paint color, it can be distracting and off-putting. Buyers are thinking emotionally at that point," she says.

Realtor Marian Khosravizadeh is connected with Woodland Hills Real Estate Services. She specializes on serving clients who are looking for real estate opportunities in Los Angeles County and its surrounding communities. Learn more about the ins and outs of buying and selling homes here.