Does staging a house really add any value to the sale?

Question

Hey BP,

During to foreclosure boom in Las Vegas we never staged a single home we sold and it became very obvious that what sold a property quickly and at the high end of comps was the quality of the finish. Because of this, we consistently beat local comps despite many running battles with the appraisers.

Now in Atlanta, there is a consensus among all Realtors here that you have to stage a home to sell it or get a good price. However, it does not seem to make much of a difference here from what we can see. Most of the homes we have sold seems to come down to quality of finish and the price with buyers fighting everything tooth and nail until the day of close.

The average cost of staging a home for the duration of the selling period or the staging company minimum charge (3 months) is $2500 which is a good chunk off the bottom line.

I've been in the property game a long time, done a lot of deals and my instincts are telling me this is not the best use of this kind of money and throwing $1,000 into marketing on day one would be a far better use of it.

I can't seem to move away from the idea that a beautifully finished home as it is would be like an open canvas to a potential buyer and I know most aspiring homeowners have their own creativity and ideas about their style of home.

I'd really like to get some feedback on this. Thanks BP!

Dawn Brenengen · Answer

you don't have to stage every room, just the main areas and any awkward spaces. If you have a particularly small bedroom, stage it as an office or nursery so that a buyer can see that it's still useable

You are not paying for some decorator's taste. You are paying for an expert to highlight the best features or the home and minimize the worst. Staging and decorating are different animals.

Guy Gimenez · Answer

@David T.

I can only speak to my own experiences. When the market is very heated and there is low inventory there doesn't seem to be a need stage. However, when dealing with a slowing market and more competition, I've found staging definitely helps.

One of the reasons most investors don't stage homes is cost. Years back, I found it more economical for me to buy a house full of mid-range furniture and accessories (we have less than $15K invested) and use it flip after flip. It's paid off for me many times over. Even had some buyers ask to pay me for the furniture or ask to hire my wife and I to decorate the house using the buyer's furniture.

David Begley · Answer

Bill Gulley No, staging certainly doesn't add value and is definitely a selling expense, but an expense that is well worth it if you plan to list on a MLS and have that feed Zillow & Trulia. Not even sure it will help get closer to your asking price; however, I do think staging and the resulting pictures on MLS will bring in more looks, traffic and interest than the same house not staged. Like I mentioned, I have an excellent professional "stager" that is also a real estate agent. For a 1,700sf home, the price is about $1,750 all-in for 6-months. I got a full price offer within 24 hours of listing a rehab that is scheduled to close next week. I'm not implying that this was all due to staging, but I will now be very reluctant to list a house not staged.

The family room and kitchen before and after staging:

David Begley · Answer

@David T. I can only speak anecdotally, but when I was in the process of rehabbing an in-town property (http://www.biggerpockets.com/forums/223/topics/172559-a-jv-rehab-with-another-biggerpockets-member---a-success-story), I made it a point to review new offerings listed on MLS within a mile or so of my property to see how they were listed and marketed. I unscientifically noticed that those staged seemed to get quicker offers and closer to asking price than those that didn't. So, I decided to stage this house and whether or not the cause, had an offer the second day it was listed and had four very interested realtors with clients the same day, even before actually going through the house. Also, I was able to get a professional to stage for about $1,750 for a 6-month contract and they provided everything from towels, to pictures to window treatments. I think it can differentiate yourself and make your property more attractive at least for that first visit.

David Begley · Answer

Bill Gulley You are correct sir! The staging was 0.67% of the contract offer. :^)

Tom Yung · Answer

@David T.

Attention & effort should also be paid to the color of lights.

Depending on the color of interior. Different colors of the different light bulbs provide very different effects on the highlights.

The color that@David Begley used in living room is a warm grey. Same warn light bulbs were used. Change the color of the bulbs to cool white. It will generate a off harmony effect.

Also the beam & direction of the light play a important part of staging. Like the under counter light on to the cabinet & mirror tiles.

staging also covers minor defects.

David Begley · Answer

Why not skip the 6% paid to Realtors, list as a For Sale by Owner and save $18,000 then? To me, that's the same logic - you may eventually sell the house as a FSBO, but do you really want to take the gamble that the carrying costs on a FSBO won't exceed the realtors fees? Of course you wouldn't. The reason for staging the home is for quick attention in the MLS, increased traffic and interest, and hopefully a quicker list-to-close time. In your example, I certainly wouldn't agree to pay 7% in closing costs - I'd agree to 6% so I could justify the staging. In my example, I doubt I would've received a full price offer within 24 hours without staging, and if staging shortens that time by 4-6 weeks, you've paid for the service. (Besides, I "save" 3% realtors fees by listing the properties myself.)

Bill Gulley · Answer

@David Begley

Agreed and looks good! I'm guessing at your price that was close to 1% or less. :)

Bill Gulley · Answer

IMO, staging cost should be at 1% of the sale price or less, and not all rooms need to be staged. Main living areas, kitchen slightly or lightly, main bath, master bath, the rest can be empty. If you have a large master suite, might stage that.

It is a selling expense and it does NOT add value to the property!

You will never see an appraisal saying "this house is staged" and then add value!

What you might do is show the home in a better light, which appraisers try to ignore, but opinions can be swayed somewhat, if they look more favorably on the property they may lien a bit higher but will still be justifying the value. No appraiser cuts an opinion to one per cent, but meeting the contract price might be more of a goal, appraisers are human.

But, no, selling costs do not add value to any property. :)

Heera S. · Answer

Staging allows ideas for how the home can look. Sometimes potential buyers don't see how things would fit and it helps them to see it as a home rather than just a house. The costs are high, I don't see why you wouldn't rent furniture yourself and place it there rather than rely on a designer's taste. Everyone has their own taste anyways, I don't understand why pay for someone else's unless they can convince you will benefit from their style.

Does staging a house really add any value to the sale?

Does staging a house really add any value to the sale?

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