When a homeowner moves out before property is sold, Showhomes moves in That lived-in look

THE BALTIMORE SUN

Jake Robinson and his family rent a 5,000-square-foot Colonial on the Severn River in Millersville. The $700,000 home has six bedrooms, five baths, Jacuzzi in the master bathroom, sauna in the basement, in-ground heated pool, hot tub, boat dock and lift.

What do they pay? Just $700 a month.

The family happened upon a newspaper ad by Showhomes of America Inc., a Texas company that searches for people to furnish, occupy and maintain vacant for-sale properties to get them to sell more quickly. The occupants, known as "home managers," pay rent well below market rates but must vacate the houses as soon as they are sold.

"The concept is to take vacant, cold-feeling properties and turn them into decorator show homes," said Gayle Horne, a regional vice president for Showhomes, a 7-year-old Dallas firm that moved into the Baltimore-Washington market two years ago.

Real estate agents frown on home sellers moving out before their house is sold. They say an empty house is more difficult to sell because home shoppers have a hard time imagining living in a place without seeing furniture, lamps, carpet, pictures and the like. In addition, buyers seeing a vacant home often feel the seller is desperate and offer less money than they would otherwise.

Still unfamiliar to most real estate agents in the Baltimore area, Showhomes is planning to make a marketing push here soon. To date, most of their vacant homes have been near Washington, and virtually all of those here have been found through PHH Homequity, the relocation firm whose parent is based in Hunt Valley.

"It's an interesting idea," says Arthur Davis III, president of the Maryland Association of Realtors. "I would be inclined to try it, because it's very difficult for a buyer to picture how a house could look when it has no furniture."

On average, houses filled by Showhomes sell 43 days faster than those that stand empty, according to PHH Homequity. Sellers also fetch more for their properties and spare themselves maintenance and utility costs -- for an average saving of $1,800 per property, PHH Homequity says.

Renters pay for utilities and upkeep. They can spare the owners a disaster from a frozen pipe or an attic fire, said Keith Bisogno, manager of marketing for PHH Homequity, the sole relocation company entitled to work with Showhomes in the Baltimore market.

More importantly, Mr. Bisogno said, renters give a home a feeling of character.

"Four walls can lack personality until there is a couch, a plant, a throw rug and a creative window treatment in the room," he said.

The owners of the property, however, get none of the rent money toward their mortgage; that money is kept by Showhomes.

Renters must own or acquire fine furnishings -- good enough to meet an interior designer's approval. They must keep a home in show-to-sell condition seven days a week. They must be willing to leave the house with a few minutes notice when an agent brings prospective buyers through. And, most importantly, they must agree to move when a property is finally sold.

The reward is a chance to rent for about a third of the going market rate. Monthly charges for a small house or condo start at $300. The maximum charge for a $1 million house is $1,000 a month.

Showhomes raises all of its revenue from the rent paid by home managers, said Kelly Rose, 30, chief executive of the Dallas-based company.

Mr. Rose declined to discuss the company's finances.

Along with partner Daniel Ortega of Atlanta, Mr. Rose founded the company in 1986 in Oklahoma after a steep decline in the Southwest real estate market left the region with many empty houses.

"There was a tremendous number of vacant homes that were deteriorating and causing everybody else's values to go down. We matched these vacant homes with families who wanted to save money and everybody won," Mr. Rose said.

To date, Showhomes has filled more than 25,000 vacant properties with home managers throughout the United States -- about 400 in the Baltimore-Washington market.

Showhomes' properties range in value from $90,000 to $2 million; most in this area are valued at more than $200,000.

The concept is still gaining acceptance by real estate agents in the Baltimore area, said Ms. Horne, of Showhomes. Some agents fear that a home's occupants will not keep a property in show-to-sell condition or will resist showings.

"Realtors worry about losing control of their listings. But once they work with us, they realize it's very easy to work with home managers and that it increases the marketability of a home," Ms. Horne said.

Sonia Waldorf of Long & Foster's Bowie office recently turned over a four-bedroom colonial to a couple of Showhomes managers -- a young executive and his wife, a medical student. The house sold to the second couple who saw it after the home managers moved in.

The couple's furniture included a number of fine antiques, which enhanced the decor of the home, with its library, two-story family room and gazebo, Ms. Waldorf said.

Operating out of an office in Vienna, Va., Showhomes finds vacant properties through private owners, banks, real estate agents and corporate relocation companies such as PHH Homequity. It finds its home managers through newspaper ads and referrals from realty agents.

"Almost everyone who calls says, 'There must be a typo in your ad' --and that 'typo' is the price," said Iretha Camp, an administrator at the Virginia office of Showhomes.

Most renters stay in a property for four to eight months and have one or two months' notice when they must vacate -- although, technically, they can be asked to move with as little as five days' notice. In general, renters can stay until five days before the home goes to settlement. And Show homes promises to find them another property -- though not necessarily in the same community.

Those who want to become home managers are carefully screened. They must be nonsmokers, without pets and prove they have designer-quality furniture by providing photos. They must also agree to buy extra items to fill out a room setting.

From the outset, home managers work closely with Melissa Coates-Bolino, a Showhomes interior designer. She helps arrange furnishings and instructs them on how to keep property in model-home condition. Home managers, for instance, are not allowed to leave toiletries out in the bathroom, let newspapers pile up, or leave dirty dishes in the sink. Home managers are also subject to monthly surprise inspections.

"It actually gets you organized. You make sure the dishes are in the dishwasher at night and that you've picked up your dirty clothes," said Mr. Robinson, the home manager in Millersville.

Mr. Robinson and his wife, Heather Dawbarn, who have two young children, happened into the Showhomes program 16 months ago. Having bought into a pizza franchise with two local outlets, the family moved to Maryland from Tennessee in 1992 and were shocked at the high cost of housing.

The couple -- in their early 30s -- decided to rent rather than buy. Scanning newspaper classifieds, they happened upon the Showhomes ads and were accepted into the program.

They occupied their first house -- another large Severn River property -- for 13 months until it was sold. Then in July they moved to their current home, which also sold recently and which they must vacate before the deal goes to settlement in a few days.

"It's kind of like a Horatio Alger story in a weird kind of way," said Mr. Robinson. "By being a little resourceful, we're able to live in a beautiful house without paying an arm and a leg."

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