Monthly Archives: June 2016

Design World For Great Real Estate

It may feel like no other career compares to selling real estate, but professionals in other fields can relate to you.

“There’s a lot of listening and a lot of complaining and errors to fix,” says Linc Thelen, founder of Chicago-based Linc Thelen Design. “It’s a stressful job at the end of the day, and you have to be very communicative.”

Know the feeling? Well, Thelen isn’t a real estate professional; he’s talking about his work as an interior designer. We heard from him and dozens of designers, architects, developers, and others at the Chicago Design Summit this month. In the process, we gleaned three thoughtful ways for you to work better with clients, make properties shine, and help your business rise above the noise.

Helping Clients Declutter

Interior designers have to convince home owners to pare down or update their decor all the time, so they have a few tricks up their sleeves that you can learn from.

Marshall Morgan Erb, an interior designer in Chicago, told attendees every home owner he works with has an existing design element they can’t part with for one reason or another, even though it doesn’t fit their final vision. Erb suggests making modifications to the item, such as upholstery, painting, or staining, or considering giving the item to a family member or friend who would appreciate it. But sometimes, clients just need a little time to change their perspective.

“I like to let other things develop in the project, and then we circle back on the fact that the dining room table doesn’t fit the home they want,” he says. “It takes a while for them to be truthful to themselves… but eventually, they distance themselves from it.”

Taking Magazine-Style Photos

Open any architecture or home design magazine and you’re likely to see at least one photo of a home taken just before sunset. “We all love those dusk photos,” admits Celeste Robbins of Robbins Architecture. It’s not just the glow of the golden hour that draws us in; Celeste Robbins of Robbins Architecture notes that a twilight setting allows a photographer to highlight the interior and the exterior of a home at the same time. A warmly-lit family room appears to glow when framed by the dark blue of dusk from outside. But don’t forget to pick a focal point inside the home that’s visible from the windows (a dining room table centerpiece, perhaps) to capture the eye.

Another way to use windows is to incorporate a home’s natural surroundings in your listing photos. After all, there’s a reason it’s called a “picture window.” Robbins suggests making greenery a part of the staging to create a serene scene on the cheap: “Nature’s always a form of art you never tire of, so if you’re able to bring nature into the house, you’re starting in a good place.”

Responding to DIYers

Just as consumers think they can buy or sell a home on their own using real estate websites, they also think DIY design solutions can replace the knowledge and expertise of a professional designer. The key is to avoid getting defensive. Chicago-based interior designer Michael Del Piero says she embraces Pinterest and other design sites as a place to start building client relationships.

“It shows that you’re not worried and uptight, and it shows that you’re collaborative,” she says, noting that these sites also help emphasize good design as a worthy priority. “All that has helped us because it’s given validity to designing your space. At least it is interesting and important to them.”

Wear and Tear

What do you do about scuff marks on the hardwood flooring? Or nail holes from hanging pictures? What about dirty appliances? Can you charge a tenant to bring the property back into the same condition it was in before they moved in?

Of course, tenants want their security deposit back in full, but as a landlord, you must retain the deposit to apply toward any damage that the tenant is responsible for. When it comes to assessing what issues were caused by normal use and which problems are more excessive, it can get complicated.

When a tenant moves out, it’s up to the landlord to process their security deposit and return it in a timely manner. This deadline varies considerably from state to state, but for most areas, it’s about 30 days.

To further compound the issue, state and local regulations vary considerably on how security deposits should be handled. Not surprisingly, disputes regarding security deposits are among the most common reasons landlords and tenants end up facing each other in court.

To clear up some of the confusion surrounding this issue, here are some guidelines for the typical areas where damage occurs in a rental to help you determine whether it falls under the category of normal wear and tear or is something more serious.

Flooring

In most cases, you can’t expect the floor to be in pristine condition after a tenant leaves. Carpet naturally has a limited lifetime, especially if it’s a lighter color. High-traffic areas will naturally become worn down, and it’s common to see a few light stains and indentations from furniture. A steam clean, customarily performed in between tenants, should bring carpet back into decent shape. However pet stains, holes, and burns generally go beyond everyday wear and tear. When it comes to hardwood flooring, the same standards apply. Worn or scuffed flooring in areas that receive a lot of traffic is to be expected, while deep gouges or an extensive series of scratches are usually indicative of tenant damage. With tiles or linoleum, it largely depends on the quality of the flooring and what has caused the damage. If linoleum is starting to peel near the door, for example, it’s most likely the result of normal use. Broken or chipped tiles or deep scratches in flooring could have been caused by dropping heavy items or dragging something across the floor and may be damage the tenant could be held responsible for.

Walls and Doors

Faded paint or wallpaper is considered normal wear and tear, and minor superficial damage — such as a few small nail holes, or a hole where a door handle hit the wall — is usually considered normal wear as well. These small issues can easily be repaired and shouldn’t come out of the tenant’s security deposit. However, pen marks all over the walls, or deep gouges or dents that will require more than some quick plaster to repair, are usually considered excessive. Similarly, the cost to repair or possibly replace doors that are hanging off the hinges or sliding doors that have come off of their tracks and been banged around can usually be deducted from the tenant’s security deposit.

Suite to Street Appeal

Commercial spaces are benefiting from homey staging touches that draw client interest and close deals.

When it comes to creating favorable first impressions during showings, commercial practitioners are starting to take a page out of the residential sales playbook. Professional stagers are reporting an uptick in interest from commercial brokers who recognize that an office suite, a retail space, or even a vacant warehouse can benefit from an appearance boost. While only about 5 percent of commercial brokers currently use professional stagers to help get a building or retail space leased or sold, according to Barb Schwarz, founder of Stagedhomes.com, she and other staging pros see enormous growth potential. In the commercial space, staging can help with your clients’ company branding while offering value for a transaction.

Residential Crossovers

Minneapolis-based stager Shar Sitter has a background in interior design and a strong portfolio of commercial clients. In her 11-year career, Sitter has staged a wine and liquor store, the entryway for General Electric’s Minneapolis headquarters, an 18,000-square-foot counseling and healing center, model units for assisted living centers, and even the entrance to a Keller Williams brokerage that sought to attract “high-ticket” agents. Her full-service business, Rooms With Style, includes a 3,000-square-foot warehouse stocked with residential furniture and accessories.

Her clientele was exclusively residential until a large apartment complex hired her to stage a model unit. “They liked it so much they said, ‘Will you do our common areas, offices, and entryways?’ [I found] it’s really not so different, because you’re still targeting an audience. Instead of targeting a buyer, you are targeting the client’s customers. It’s about conveying who they are and what they want to sell.”

If there is a key distinction between the goals of residential and commercial staging, Sitter observes, it’s that the commercial stager is more likely to be helping project a company’s brand rather than preparing a property for sale. Recently, she staged a construction company’s front entrance, which required her to create a space to reflect two distinct, and sometimes contrasting, needs: a professional space for client meetings and an environment filled with “men trouncing around in boots.”

The environment, she notes, had to be stylish, yet functional. The rough barn wood she selected fit the masculine environment of a construction company. But she also needed to appeal to homeowner clients who come in for consultations and need to see that the company is up on current home renovation trends. So Sitter staged the lobby with dark gray leather chairs and a soft rug, a large powerful horse as featured artwork, plus the company’s logo in metal hanging on the wall. The kicker: white shaker-style cabinets were added to the employee kitchen, demonstrating to visiting clients an awareness that “the number one kitchen color now is white.”

Are You Ready For Building

There are some situations managers and owners of commercial buildings hope will never happen on their property: natural disaster, large-scale theft, sexual assault, or even a terrorist attack. But all these things can happen, and real estate professionals have to be ready for them.

That point was brought home to Luis Alvarado, executive vice president for property management at Newmark Grubb Knight Frank in Boston, during the Boston Marathon bombing of 2013. His previous company, which he declined to name, was managing the building at 699 Boylston St., in front of which the first bomb was placed.

“Thank God we had plans in place, including how to evacuate,” Alvarado says, adding that their manual for unexpected disasters runs near 100 pages long. His company cooperated with the investigations of Homeland Security, Boston police, Massachusetts police, and the FBI. The building was shut down for almost two weeks. “You need to establish communication with every tenant and have three contacts for every tenant.”

So how should you prepare for such emergencies? “It’s important to have a written policy manual covering all those foreseeable events, so that standards of practice can be adhered to,” says Neil Merin, chairman of NAI Merin Hunter Codman, a commercial real estate services firm in West Palm Beach, Fla. “There has to be a reasonable approach that mitigates the problem but doesn’t inconvenience tenants excessively.”

The range of crises that could arise stretches long and wide, which necessitates thorough preparation. Jesse Holland, president of Albany, N.Y.–based Sunrise Management and Consulting, has virtually seen it all: “a bomb squad, a hurricane, fires.” He’s happy to note they haven’t had any reported cases of sexual assault, but have had to deal with “sexual offenders who didn’t belong on the property.”

Holland says there are four crucial steps in preparing for crises, and the first step is compiling pertinent information. “Where are the locations of the water shut-offs and gas mains? Who needs to be contacted in case of emergency and what are their phone numbers?” Holland says.

Being prepared can also help you deal with smaller emergencies. For example, when the computer system Holland’s company relies upon crashed, they were saved by the fact that part of their disaster plan is to print out the rent roll for apartment complexes each month. “All the information was there to rebuild our records,” he says.

The second major issue for Holland is relationships. “All emergency situations involve a lot of other agencies and stakeholders,” he says. For example, if there’s an active shooter on your property, you’re interacting with the police department. “That’s a lot easier if you already have a relationship with the police.”

When Sunrise puts up a new building, it invites the fire department during construction so officials can see where things are and how they are put together. “We have relationships with town officials and assessors too,” Holland adds.