Why stage a home? Here is a list of 8 benefits of staging a home before putting it on the market:
1. Staging is a Highly Effective Marketing Strategy
Staging a home is an integral part of any good real estate marketing strategy. While important, the primary purpose isn't simply to make the home more aesthetically appealing. Furthermore, a home staging company is not a furniture rental business. The business model isn't simply renting out furniture to home sellers.
Home staging is a unique industry in it's own right. While it is important to hire a home staging company who will curate an aesthetic that appeals to the tastes of your targeted buyer, the main objective of home staging is addressing the targeted demographics' needs as it pertains to their desired lifestyle: How they see themselves living, working, and entertaining in their new home.
Home staging defines the spaces of a home and highlights each area's functionality. For example, a buyer may view a bonus room in an empty house as just wasted space that will raise the costs of heating and cooling the home. But, if that same area is staged as a room that would be useful for that targeted demographic, it now becomes an asset rather than a liability. Many times, a stager can turn a space into something the buyer didn't even know they needed, but after they see it, they suddenly must have it!
The National Association of Realtors (NAR) does an annual survey of their members to gauge the effect staging has on home sales. Here's what their 2021 report indicates:
Source: 2021 Profile of Home Staging by the National Association of Realtors Research Group, pages 7 and 8.
A random sample of 58,300 active REALTORS® filled out an online survey. A total of 2,347 useable responses were received for an overall response rate of 4.0 percent. At the 95% confidence level, the margin of error is plus-or-minus 2.02%.
When home staging has a positive impact on this many buyers, it stands to reason that this is resulting in more offers. The more offers you get, the more terms you have to choose from.
2. Staging Your Home Will Help You Get More Money at the Closing Table
All the benefits of staging a home have a direct effect on this one. If you want to sell your home for more money, staging it is the way to do it. According to the same NAR 2021 report...
Let me put this into perspective for you: My company, Larimar Home Staging, is located in Rancho Cucamonga, CA. So I'll use California as an example. According to the California Association of Realtors (CAR), as of April of 2021, the median price of a home in California was $800,000. So, according to the results of this NAR survey, the average home seller in California could potentially make an additional $8,000-$160,000 or more if they have their home staged before putting it on the market.
While it's hard to predict what a buyer would have paid for a home that wasn't staged, or how much more, we can look at comparable homes that weren't staged and the percentage of the list price they received compared to their staged counterparts. I track home listings online in my area and I'm always very pleased to see the results properly staged homes get compared to homes that were not staged, or staged poorly. When looking at these comparisons, I also advise taking note of the level of service the staged home received. For example, partial staging or occupied staging won't get the same result as full, vacant staging. While partial and occupied home staging usually cost less, your return will be proportional to how much you're willing or able to invest.
3. The Investment in Home Staging is Less Than the Average Price Reduction
Home staging is an investment. You'll get the money back at closing and then some. Furthermore, home staging will almost always cost less than the average price reduction. Staging will also get the house sold more quickly, so not only can it help prevent the first price reduction, it will prevent multiple, subsequent price reductions and lower offers due to the lower perceived value of a home that's been sitting on the market. When buyers see that a home is taking a long time to sell, they 1) assume something is wrong with the house; and 2) know that there is no competition with other buyers for the house and, therefore, know that the sellers will be willing to accept below asking price. Your home will never have as much perceived value in the eyes of home buyers than the first day it hits the market. Start out on the right foot by staging it before listing for maximum results.
4. Staging Your Home Will Save You Money in Carrying Costs
By staging your home to get it sold faster, you could be saving money in more ways than one.
As I explained above, buyers will usually offer less for a house that has been languishing on the market, costing you money. But the number of days on market may also result in additional living expenses and carrying costs. Here are just a couple examples:
If you're selling because of a divorce, it's likely one of you is renting or paying another mortgage for a separate home elsewhere. Or perhaps you've had to relocate for work. That's two sets of housing expenses you're paying simultaneously: two mortgages (or one mortgage, one rent payment), double the utility bills, maybe double in landscaping and/or pool maintenance fees, etc.
If you're an investor who flipped the house, you understand that these carrying costs eat into your return on investment (ROI).
5. Staging Will Give You an Edge Over Your Competition
In a cool, neutral or even warm market, there will be many homes for your targeted buyers to choose from that meet all their basic criteria: their desired square footage, in the neighborhood they prefer, within their budget…. So, how do you get your home to stand out? Do you even know who your targeted buyer is? What appeals to them? A good home staging company knows these things and will stage your home to fit that demographic's needs and tastes.
Even in a really hot sellers' market, like we are currently experiencing in 2021, professional home staging may make the difference between getting a couple lukewarm offers and a bidding war between buyers who want your home so badly they'll offer tens of thousands or even a hundred thousand or more over list, and they may even waive contingencies and/or be willing to pay above appraisal value.
6. Staging Will Create Better Marketing Photos
One of the most overlooked benefits of home staging is better photos. In the age of the internet, a buyer’s first impression of a home is now formed when they preview the photos on sites like Zillow and Redfin. I highly recommend all home listings be professionally photographed, but there is only so much a photographer can do. Home staging will get you the best marketing photos. The best home stagers understand that certain colors and furniture arrangements photograph better than others. A stager's first priority should be how the home is going to translate in the photographs.
If buyers are impressed enough with the photos, they will make an appointment to view the home in person. So, the next challenge is to meet or exceed the expectations they formed of the home online, and it is for this reason that I strongly advise against virtual staging. I've written a separate post explaining why virtual staging doesn't work, but to summarize, it's like meeting up for a date with someone you connected with on an online dating site who turns out to look absolutely nothing like their profile pic. If this has ever happened to you, ask yourself if the same reaction you had then is the reaction you want to evoke in home buyers. If I thought virtual staging worked, I'd change my business model in a heartbeat. Just as it may appeal more to you because of the lower fees, I would have significantly lower overhead costs doing virtual staging vs real staging. But I want to offer a service that has value.
7. There's a Psychology to Home Buying
A good home stager knows there's a psychology to home buying and knows how to work this to your advantage. How buyers feel about the home will directly affect how fast you're going to sell and for how much. In fact, there's a whole book available on Amazon called Psychological Staging written by Kristie Barnett, a former psychologist-turned-home-stager, which I highly recommend.
Here are just a few of the many ways how a home is staged (or not staged) will have a psychological effect on your potential home buyer:
8. Professional Home Staging Fees May be Tax Deductible
During the first certification course I completed to become a professional home stager, I learned one of the lesser known benefits of home staging is that it is tax deductible. Since a home stager prepares your house for sale, the IRS considers the service an advertising expense, as long as the stager has been hired for the sole purpose of selling your home. The staging fee is subtracted from the proceeds of the sale of the home and decreases the total realized profit. Disclaimer: Since the tax code changes as new laws are passed, I recommend contacting a tax professional or accountant to verify if the cost of home staging is still deductible.
Call Larimar Home Staging to learn more about how we can help you sell your home faster and get higher offers!