Staging in real estate is where a seller does a temporary beautification of a property.  The furnishings are usually rented or supplied by the listing agent with the intent of selling the home more quickly.  The listing agent may do the staging in exchange for a listing agreement.  However, reverse staging is the opposite of this practice and is actually criminal in nature.

I saw reverse staging for the first time probably 15 years ago when I got a call from an investor who offered me a waterfront property in a very nice neighborhood.  When you get these calls the best thing to do is drop what you are doing and go see it as hesitation can result in lost deals.

I met the investor and his partner at the property and the outside looked reasonably good but inside was a different story.  It appeared the property had been vandalized with dry wall knocked out everywhere.  The toilet bowels were smashed and many of the windows were broken.  In addition, the ceiling had brown stains in numerous spots which indicated roof leaks.

As I spoke to the sellers, they explained it was a short sale and they were still working on getting a final price from the lender.  They also admitted that the ceiling stains were from iced tea they sprayed to fake the roof leaks.  The smashed windows, toilet bowls and holes in the drywall were also their doing.

Actually their drywall destruction did disclose a massive termite infestation that would otherwise have gone unnoticed.  After they told me what they had done, I decided not to do the deal with them.  I felt if they were capable of that level of deceit why should I think I would be immune.

I haven’t seen them in the local real estate scene in many years so they moved on or maybe were caught and incarcerated.  Yes, it is a criminal offense to reverse stage a property and bank fraud as a matter of fact.  This came to light awhile back when an investor confided that he had banged up a property to get a better price and he got caught.

I cannot bring myself, and I hope you don’t, to reverse stage a property for the sake of getting a price reduction.   While the punishment may not fit the crime, you could still have a criminal conviction on your record that would negatively impact your future for many years to come.

To your limitless success,

Dave Dinkel

PS – I am an advocate of having a seller leave all the stuff they don’t want in the property when we buy it.  Especially in probates, the seller’s unwanted items can be a treasure trove for the buyer – in some cases for us it has been nearly worth as much as we paid for the property.  If you are wholesaling a property that is full of junk, it should be worth it to clean it out before you start showing it – this usually adds $5,000 to $10,000 to the sale price.