The Benefits of Staging Your House for Sale -- Another Sign of Softness in the Housing Market

Well, I've certainly detailed what I think will happen to the housing market, noting that many homeowners are becoming desperate to sell and, above this, there are even more signs the housing market is headed down. I've also laid out my real estate investing plan for the housing decline. So, I've covered the issue from many angles.

But this is a new one to me. I found this article on home "staging" at MSNBC. Basically, for a fee, a professional will come into your house and rearrange furniture, change lighting, add some curtains instead of blinds, and on and on -- all with the intention of making your home look better to prospective buyers. And it seems to work. Check out these facts:

According to a 2006 StagedHomes.com survey, homes listed for sale without staging spent an average 4.5 months on the market; homes staged before listing spent less than 1.5 months on the market. The average time for a staged home to reach a ‘sales pending’ status was about a week. And staging boosts the estimated sales price by 3 percent, according to other industry surveys. On average, certified stagers charge $1,900 per listing, Schwarz estimates, although that varies widely depending on region.

While no independent national surveys have been conducted to substantiate these industry claims, anecdotal evidence suggests the ranks of staging adherents are growing.

Very interesting.

So, if you have a $200,000 house and spend $1,900 on staging it, on average you'll save three months on the market and make a sale for $6,000 more than you would otherwise? Seems like a good deal to me.

As I was reading this article, I thought, "This is a creative idea. But it certainly does highlight the fact that it's getting harder and harder to sell a home. What will they come up with next -- families you can hire to live in your house and make a good impression?"

Then I clicked to page two of the article and read:

Headquartered in Mobile, Ala., Showhomes has been staging homes nationally for 20 years.  But it practices a more extreme form. The company moves one of its home managers — along with the manager's family and possessions — into a vacant home. Then the home manager stays until the listed home is sold and closes.

This too seems to work:

Professional golfer Jeff Johnson and his wife, Rebecca, were uncertain where they wanted to live when they moved their family to Charlotte, N.C., late last year, so they signed up with Showhomes to be ‘home managers.’  They are already in their fourth home.

“All three of their previous homes sold for 94 to 97 percent of their list price," according to Lucy Henner, director of marketing for Showhomes. And they sold within weeks of the Johnsons moving in.

Ok, so while these new methods of selling homes seem to be helping, they also reflect the fact that the real estate/housing market is getting tougher and tougher for sellers. They are having to be more and more creative to sell their homes and consider new and "outside the box" ideas. Which isn't bad -- that's one of the benefits of capitalism, that you see a financial process, add to it to make it better, someone then adds to that idea, and so on and so on. But still, why are these creative ideas just coming into the mainstream now? I think it's because homeowners are facing a slowing market and have to do a bit extra to sell their homes.

Comments

[Larry Nusbaum]

It's exactly why I like to buy empty houses and non-owner occupied houses. And, these ideas listed above are not new, but as important as ever for sellers.

[Stock Rake]

I was going to say the same thing. Home staging is not new, but VERY effective nonetheless. Most people cannot visualize what the house/condo will look like without the staging. I've personally seen properties sell faster than my own (which were not staged). It definitely works. On future properties that I buy/sell I will likely utilize home staging. Like Larry said, in "todays market" staging is extremely important for sellers, because they need every edge they can get.

[Kim]

I sold a house in 2004 and staged it beforehand. It's actually unusual to see a house for sale in Northern California that isn't staged. Everyone expects it now. Most buyers have little or no imagination. I staged the house myself, having a pretty good eye and understanding of what buyers want to see. I priced the house high - very high - and expected to negotiate. Instead, I had an offer from a buyer who not only wanted the house, but wanted to buy all the furniture, artwork, bedding, etc. that I had used to stage it. I received full asking price for the house, plus an extra $14K for everything else.

[Free and Clear]

Achieving equilibrium between supply and demand for housing is critical to stabilizing housing prices, and therefore household wealth, its worth it to extent tax credit to increase the demands .