Maybe you are currently in the process of selling your house or your real estate business is.
You might have been advised to take a look at home staging and that it may help to move your property faster.
But is it worth the while? And how much does it cost to stage a house?
Staging a house costs on average $400 and can increase the dollar value of a house between 1% and 6%.
The costs of staging a house can become a ‘money graveyard’. Yes, it has many benefits, but can also be easily overdone and nullify any benefits.
Today we discuss general aspects of home staging, some interesting stats and of course, how much it costs and the ROI you may get out of it.
What Is Home Staging?
When you usually go out to a nice restaurant for a date night or a real date, or when you participate in a formal gathering, you usually want to present yourself from your best side.
This is to make a good impression and to appeal to as many people as possible or in case of a date or date night to attract your date.
Home Staging is basically the same, just without makeup or your favorite wardrobe.
It’s usually the preparation of a private residence for sale in the real estate market with the aim to appeal to the largest amount of potential buyers possible.
Another aim is to increase the perceived value of a home so you can achieve a higher selling price on the market.
The task of a home stager is to make changes to the interior design, so that the home becomes more attractive and welcoming.
This is very important for potential buyers to be able to see themselves living in it more easily.
Not many people have good visualization skills and are able to imagine a fully furnished home according to their taste while visiting an empty home or do the same with a not so well interiorly designed one.
Is Home Staging Worth It?
Before concluding if home staging is worth it, let’s check some stats about it and then compare some pros and cons.
This is more or less confirmed by 25% of buyer’s agents who stated that it increased the dollar value of a home by 1% to 5%, compared to non-staged homes.
On the other hand, almost 30% mentioned that staging had no impact at all on the dollar value.
A staged home made it also easier for a buyer to visualize the property. This was stated by 83% of buyers’ agents.
Staging in general had an effect on a majority of buyers’ view of a home. This was reported by 40% of the buyers’ agents.
Only 6% of the survey participants claimed that it had almost no effect on the buyer’s view of the home (source).
A tiny majority of sellers’ agents claim that staging decreased the time on the market (28% report a slight decrease, and 25% a significant decrease).
What Percentage of Homes Are Staged?
This is an important question to ask if you would like to know what you are up against in terms of competition, and if you can risk to not stage a home as a real estate professional targeting retail buyers.
Sellers’ agents stage a house in 28% of the cases and only stage homes in 13% of the time, when they are difficult to sell (source).
That makes a total of 41% of homes that are offered staged on the retail market.
Who Pays for The Staging of a House?
According to the same study mentioned in the source above, the average cost of staging a house was $400.
And while the seller’s agent personally offers to stage the house, in 18% of the cases, the costs were covered by the seller before the listing of the home, or offered as a staging service to the seller by the real estate agent in 17% of the cases.
The Pros and Cons of Staging a Home
Let’s take a look at the pros and cons of staging a home to then draw the conclusion if it’s worth doing.
- It can increase the dollar value of a home between 1% and 5%
- It makes it easier for a buyer to visualize the property
- Staging has a positive effect on a majority of potential buyers of how they view a home
- It can give you a competitive advantage
- Staging makes a home look well-maintained, contemporary and more spacious
- The interior of a home can be better tailored to a special target group the real estate professional is focused on (e.g. getting rid of carpets, if you target first-time home buyers such as covered in my article)
- It makes necessary repairs better visible, so bad surprises will happen less
- When you plan to do a virtual tour, staging can also help to better prepare the respective house for it
- It helps to make a house stand out and by that makes it more memorable for potential buyers after a showing was done
- Staging can be time-consuming and costs can run out of hand, especially when you have to deal with furniture
- If costs run out of hand, it can be difficult to get a positive return on investment out of it
- It will be challenging if you still need to live in a staged home and have to maintain closets empty or having to remove things again and again before showings to potential buyers
- In terms of speed, there is no clear evidence according to statistics that a staged house always moves faster. If you sell a house in a high demand area, why go through the trouble anyway?
- The advantages of staging may not have the same effect on an older and used home than on a newly built one. It might even be counterproductive if overdone with an older house, where potential buyers mostly don’t expect a brand new interior
- Doing it right is almost an art, as a middle ground between letting the potential buyer enough freedom for imagination and not giving him ideas for all the needs.
So is it worth it? Let’s do a quick math example.
If we trust the stats, the average cost of staging a house is $400. But let’s be a bit more conservative with it and assume it is $700.
The median listing price of a house in the U.S. is $226,800 (source).
Now, house staging can increase the dollar value of a home between 1% and 5%.
Applying these numbers to the median listing price of $226,800, this would mean an increase between $2268 and $11,340.
Based on the math you can say that yes, it’s worth doing it.
You will get a return on investment of between 224% ($2268 minus $700 divided by $700 multiplied by 100) and 1844% ($13,608 minus $700 divided by $700 multiplied by 100).
But staging homes below $100,000 could easily put your return on investment at risk, if you don’t get more than a 1% increase of the dollar value.
What Is the Best Way to Stage a House for a Quick Sale?
To answer this question, we need to ask which areas of a house are most important to stage.
The study mentioned above also found that staging the living room (47%), the master bedroom (42%) and then the kitchen (35%) were most important.
Of course, you can stage everything else too, but it wouldn’t have the same effect.
So, applying the 80/20 principle, the 20% of rooms for home staging that affect 80% of the outcome of home staging would be the mentioned rooms above.
Could Soft Staging Be an Alternative?
To get even more out of home staging in the context of the 80/20 principle and protect and/or improve your ROI better, soft staging could be an interesting alternative.
It is a more budget-friendly version of the conventional home staging, focusing on the most essential things that have the most positive effect on potential buyers.
Traditional home staging usually involves using different types of furniture. Soft Staging doesn’t use furniture.
It works with what is already available in the house and complements and compliments the interior with further accessories and artwork that have much lower rental costs.
The goal is the same as with conventional home staging, to make the ambiance more welcoming and warmer.
Although they don’t seem to make a big impact, these little details can have a positive impact on the psychology of potential buyers.
Unfortunately, I couldn’t find empirical data and stats about this sub niche of home staging, but my intuition and logical thinking based on the above statistics tell me that this is probably the best home staging option when it comes to older houses, where staging can be easily overdone.
However, when it comes to completely new constructions, soft staging might not be the best choice.
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