How to create a strong relationship with developers as a staging professional

The housing market is changing and for property developers, simply building homes in the right locations, is no longer enough.

New properties in quality locations will always sell. But for developers to get the most from their work and from their investment, those units need to sell for the right price, to buyers, willing to pay a premium.

Moreover, to protect their bottom line, developers need their units to sell quickly, in a timeframe that keeps holding costs and associated financial risks, to a minimum.

Of course, savvy developers have long been looking at ways to maximise the rewards they receive for their effort. Yet, over the last few years, the market has moved, increasing costs and reducing the scope they have to achieve the right profits.

If we look at the big, national house-builders it’s easy(ish) to see some of the practises that have been adopted and played with, to address this issue.

Here, numerous but often subtle changes in business methods and marketing, at every stage of the process, from the acquisition of land, through to the development, through to the completion of the sale, are apparent to the watchful eye.

 

But they don’t always get it right!

Adopting the wrong approach has seen some developers devaluing their brand over the long-term.

For example, some opt to simply focus on maximising the number of units they can build, on any given plot, by reducing the size of the homes they are building.

 

It’s not a great customer-focused strategy…

Such practices have been rubbished in the press and generated countless, negative headlines – taking centre-stage in a national, on-going debate about how best to solve the UK’s housing problem and the so-called crisis of quality in new-build homes.

In my opinion – uncontroversially, I hope – upsetting one’s customer base, homebuyers, is not the answer.

 

And yet the question remains…

How can development companies continue to improve on their bottom line, whilst still meeting the needs of their buyers and the needs of those who will end up living in the properties, being built?

 

Houses for sale in a buyer’s market

According to recent data from Zoopla, sellers are, increasingly, knocking more off property asking prices in a bid to get homes sold. The gap between asking price and sale price is up from 3.3% in 2018 to 3.9%, currently, in cities, across the UK, with localised statistics in some areas showing higher numbers.

For sure in some key cities across the UK property prices are flying, however some UK property, is squarely in a buyer’s market, meaning buyers can afford to be more discerning, negotiate lower prices and prioritise their feelings about build-quality, sustainability, architecture and style, above other considerations.

Homebuyers want beautiful homes, well built and nicely presented. Property developers, deep-down, know this to be true and most strive for this, despite some succumbing to the temptation to ignore this reality.

But while the popular, public perception is that, when margins are squeezed and demand is slowing, developers always – as a fait accompli – jump into cost and quality reduction, this is far from always the case.

For sure, too many developers focus solely on their costs and too few on analysing how they can build on their market position, improving their sale prices and speed of sales through simpler, smarter means.

The truth is, we are seeing developers paying a long term price for this kind of short-term thinking.

 

But many are innovating and adapting to the market.

Staging a property, properly – presenting it, properly – making it truly ready for sale – is one of the ways that developers can make an appeal to the market and improve on the numbers that count, without having to focus on bringing the price of the build, down.

And that is why home staging I genuinely see is a must for developers.

Employing the services of a home staging professional is one, perfect solution, for homebuilders who want to survive in the current, tightly-margined environment, we find ourselves in, today.

 

What home staging professionals can focus on

Home staging professionals should continue to prioritise the numbers, new-build developers care about, and how your services can help developers, including…

  • Increasing the number of viewings.
  • Increasing the number of enquiries.
  • Increasing the number of offers.
  • Decreasing the time between a property going on-the-market to the sale being agreed.

And benchmarking and showing improvement on performance in these areas, home stagers can help developers improve on the only two things that really matter to them, namely:

  • Achieving the best sale price.
  • Achieving the quickest time to sale-completion.

 

Why doesn’t every developer work with a staging professional?

We, in the property game, do not hesitate to employ the services of other industry professionals such as accountants, solicitors and planning consultants. But for whatever reason, often small to mid-sized property developers can see staging as a cost rather than an asset or a necessary investment.

This, I believe, is a mistake.

 

And the solution?

The solution, as is often the case, is to be found in education.

Unfortunately not all property developers see the ‘value’ in home staging work and even fewer see the value in incorporating staging into their strategy, early in the development process.

As a home staging professional, part of your job is going to be to convince property developers that there is measurable value to be gained.

Whether it’s working on the refurbishment of a one-bedroom flat or with a developer who is building a block from the ground-up, the relationship between a staging professional and a developer should be that of a partnership.

Property stagers can provide immense value to their clients but they need to showcase real figures and casestudies of where these numbers count and add value to developers.

Because developers are going to respond, first-and-foremost, to data and to case studies that demonstrate qualifiable results.

 

Presenting a pitch

It is going to be up to you, the home staging professional, to present your case to the property developer in a format that immediately demonstrates the utility of staging their properies in preparation for sale.

The best method for doing this is through case studies, containing all the necessary facts and figures to illustrate, not only what has happened on past projects but what staging can do for the project, specifcially that the pitch is for, as well.

Above, I mentioned the kinds of numbers that property developers are most interested in and these are what a home stager should be focussing on in the case studies they document and subsequently present.

But, more than that, a developer will want to be able to form an expectation of achievable results for their own project. Such expectations can only form if the stager has provided the potential client with enough data.

 

What we can learn from the Home Staging Report, 2019

This year’s Home Staging Report provides a lot of useful information but the section that stood out most to me is the results of the survey where the question was, ‘Did you get a return on your investment with home staging?’.

The importance of such a question, cannot be underestimated and it is something that every home staging professional should be able to answer on behalf of their clients – and should be confident that their clients, too, would be in a position to give a confident answer, should that question be put to them.

If you’re pitching to a developer and can demonstrate the returns that you have generated for similar clients in the past and have the figures ready, to back those claims up it puts you in a fantastic position.

The home staging report shows us that 77% of respondents answered that question, affirmatively, saying that property staging was an activity that had paid for itself.

But a further 23% replied that they weren’t sure or that the question was impossible to answer.

In other words, in nearly a quarter of all home staging projects, the return on investment is not being measured, or if it is measured it’s not being presented and shouted about.

And what does this tell us?

That a solid, well-thought-out grasp on how to calculate and present ROI is where any staging professional has a not-insignificant opportunity to stand out from the herd.

 

Benchmarking

The problem here is a lack of understanding on the subject of benchmarking and a perceived lack of access to data (market data, being a topic we cover, extensively, in our company blog).

In order to work out an ROI, one first has to understand the local property market your working in.

When it is known how long comparable properties in the local area take to sell, then it will also be known what selling a property faster, should look like.

When it is known how much comparable properties sell for, in an area, then this is also a benchmark, against which, a case for having impacted the sale price, can be built.

By putting this all together, balanced against the client’s overheads, home stagers are, over time, going to be able to put together a realistic picture of exactly what they are doing to help directly build on their clients’ bottom line.

But should the developers, and home staging professionals, not know the benchmark figures for the location and property type, prior to staging, it will be difficult, if not impossible to prove the success of staging, once the property has sold.

And as such, supporting information for the next pitch, won’t be available to the home stagers.

 

Putting it all together

To sum up…

Developers are often looking for ways to improve their product and profit margins and property staging can help to this end.

But, while a partnership between home stagers and developers should, self-evidently be of mutual benefit there are still some hurdles to leap over, in the industry, as it stands.

Small-to-medium developers are not all, yet convinced about the utility of hiring a property staging professional or what that looks like, cost vs investment.

 

The answer, here, is better business reporting…

Home stagers know that their efforts will mean a property will sell faster and for a better price but it is only through comparing their results with the local markets they have worked in and by factoring in their clients’ costs and overheads, will they be able to truly demonstrate their value.

Benchmarking current and new projects against the following data sets in the local area of the property

  • Average time to sell
  • Average marketing price
  • Average sale price achieved
  • Average number of viewings / offers to sale agreed

Whilst showing casestudies of your previous projects completed and the improvements a staged property had over the local averages will work wonders.

Partnerships between stagers and developers are a match made in heaven and there is no reason for anyone to be missing out.

Robert Jones – Director of Property Investments UK

 

Learn more about property investing, visit Property Investment UK’s website: https://www.propertyinvestmentsuk.co.uk/

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