In a tough market, home staging—meticulously setting the scene in a home to help it appeal to potential buyers—may be the cure for a property that just won’t sell, particularly for vacant homes typically sold by investors.
Early studies suggested that staging a home could cut in half the number of days it spent on the market—30.9 days for an unstaged home compared to 13.8 days for a staged home, according to a 1999 study by a Los Altos Coldwell Banker broker.
More recent studies show that staging may reduce the time a property spends on the market by much more.
“The latest statistics are showing 163 days to sell in the country average, not staged, and 21 days or less staged,” Barb Schwarz, creator of Home Staging, said. “And longevity on the market means one thing…reduction in price.”
Staged homes also went for 6.4 percent more than the seller’s asking price, compared to 1.6 percent more for unstaged homes, according to the Coldwell Banker study.
“The actual figure we’re seeing is running anywhere from list price to 6.9 percent above list price, compared to other houses in the same area,” Schwarz said.
While staging may no longer net a sale above and beyond the asking price—remember, the study was conducted during the peak of the housing boom—using a professional’s expertise in prepping an investment property may help investors sell property in a shorter amount of time for more than they might otherwise have received.
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After all, “The investment of staging in your property is less than a price reduction,” Schwarz said.
Staging, in essence, enables potential buyers to envision themselves living in the home. For sellers who live in their properties, that means depersonalizing the home by taking down family photos and refrigerator art; changing artwork; decluttering; minor landscaping; moving furniture; and adding small touches, such as fresh flower bouquets.
“Any home can benefit from staging, any size, any price point,” Carolyn Stieger, president of the International Association of Home Staging Professionals’ (IAHSP) Great Lakes Regional Chapter, said in an e-mail interview. “We all have ‘too much stuff’ and that is a distraction to potential buyers.”
For investors who don’t live in the property they are selling, staging may consist of furnishing and decorating a vacant house. In these situations, many home stagers will rent beds, sofas, chairs and artwork to make a home look more livable.
“You take a mannequin in a window and you want to sell the clothes, and if there’s nothing on it, [people] can’t see what they’re buying,” Schwarz said. “They can’t imagine what a scarf would look like, or a skirt or a blouse, until they put it on. It’s the same for a vacant house.”
Schwarz suggested setting up “vignettes” or groupings of three items at three different heights—such as a chair, end table and floor lamp—all viewable from the doorway of the room. “It helps the buyer mentally move in.”
Staging a tenant-occupied property may be even more difficult than staging a vacant property. Tenants don’t have a vested interest in selling the property and have to endure buyers interrupting their lives and walking through their homes throughout the selling process.
“I tell the owners that they have to hold the tenant accountable to keep it staged,” Schwarz said. Schwarz suggested a “staging bonus” to tenants for working with agents to stage a property and keeping it presentable until it sells. Investors may want to give their tenants bonuses such as a free month’s rent after the sale or a percentage of the closing costs.
For investors, the ability to save money and sell quickly by staging a property is key. Cleaning and decluttering can cost $305 to $339, but doing so can increase the property’s sale price by $2,093 to $2,378, according to StagedHomes.com. Schwarz said she called this the return on staging investment (or ROSI).
“Sellers can save tens of thousands of dollars,” Stieger said in an e-mail interview. “Price reductions usually are taken in $5,000 or $10,000 increments, or higher, depending on the price point of the property. The marketing of the property has to look its best, and staging the property before any marketing photos are taken is a must.”
For one of Stieger’s clients, a property that had been sitting stagnant sold in just a weekend once it was staged.
“I worked with a builder with a spec home that had been on the market ‘since the beginning of time’ according to the builder,” Stieger said in an e-mail interview. “He decided to try staging. I finished staging on Friday afternoon, his Realtor held an open house on Sunday and the second couple to walk through purchased the house.”
The cost for a simple home staging consultation runs from $200 for a customized consultation for the do-it-yourself sellers to $5,000 to 6,000 for a complete home makeover by a team of IAHSP-certified stagers, according to Mortgage News Daily. However, statistics show an average of a 3 percent minimum increase in final sales price on staged homes versus non-staged homes, according to StagedHomes.com. On a $300,000 home, that’s a $9,000 increase, so investors may consider the price of the consultation and work worthwhile.