Sometimes people are wondering: Is home staging worth the cost?
For people who don’t understand what home staging is, it seems like it’s essentially just arranging furniture and accent pieces in a house so that it looks nice.
Wait, isn’t that decorating? Doesn’t every homeowner go through that exact process when they move into a place?
Kind of. It’s not really that simple.
You might want to check out this article about what home staging really is and you’re sure to learn that home staging actually incorporates a considerable amount of psychology in the elements chosen and their layout in a room.
When done properly, staging affects prospective buyers so they are more likely to view the home favourably and they’ll be more interested in putting an offer down.
Still, even after learning about the science behind it, some people wouldn’t be convinced.
So we want to look at what math behind home staging is saying.
How much is home staging?
The average prices for staging a vacant home can range between 1% and 3% of the list price of the home.
This is the price for staging of vacant homes. Occupied (furnished) homes generally cost considerably less to stage.
Still, 1% to 3% of the list price of a home, that’s actually a considerable amount of money.
Imagine a home on the market for 1 million dollars. That could be anywhere from $10,000 to $30,000 for staging.
Even a home for $200,000 would normally be staged for anywhere from $2,000 to $6,000.
That’s a lot of money.
And homeowners are paying it.
Because it has a return on investment (ROI).
Is home staging really worth the cost?
Return on investment is important. It’s like when your grandmother buys three identical antique depression glass dishes at a garage sale for a loonie each, and you go on ebay to find out that the same ones are selling for over $25.00.
It almost makes you want to rob Nan’s dishes off her.
Now, let’s say she sells one on Kijiji to someone out in Torbay for $26.00.
She basically gave a loonie and received $26.00. She spent $1.00 on buying the dish, and received $26.00 when she sold it. Another way to think about it is this:
Nan bought $26.00 for $1.00. Nice job, Nan!
That’s how home staging works. It’s an upfront cost. It’s investing in how you show your property, and in exchange, regularly, the 1-3% sale price investment brings 8-10% yield.
That means that, in the higher end of average, you’re buying 10$ for a loonie.
That’s almost as good as Nan! Not bad!
Even if you receive returns that are on the lower side of average, you’ll be buying $8 for $3.
That’s still buying $2.67 for $1.00! More than doubling your money!
Staging as an investment
It’s possible for somebody to double their money by playing the stock market or driving a used car down to the U.S.A. to sell and make back the currency exchange. And there are people who do that.
But busy professionals don’t have the time required to put into those ventures, and the time spent away from work can mean a loss in pay that means the whole endeavour is not worth their time.
Even when there’s money put into investment options such as mutual funds it takes many years before somebody can expect to double their initial investment.
As we mentioned before, with staging, the lower side of average is to more than double your investment, and it happens in a short period of time.
As for normal conditions, staged houses can sell within 24 hours of being staged, or it may take two months. A lot depends on the market conditions.
Very rarely will a staged house take more than two months to sell if it is within an appropriate price range for the market and the online representation of the home has had sufficient work put into it.
It also happens occasionally that a home will fetch more than the asking price once staged.
It’s certainly a better option than dropping the price of a house by $10,000 right off the bat. Sure, you might listed a house at the high end for the market conditions, but generally if it’s in the right ballpark for the value of the home, staging can help get the right people in to see your home (considering how great the photos will be) and those people are more likely to make an offer.
There are very few investment options that yield this kind of return in so short a time. Staging should be seriously considered as an option for investing in for the sale of your home.
According to the statistics, the average investment in staging vacant homes more than doubles. It takes almost no time at all, essentially between the moment the stager begins to work and when the buyer transfers the money. This sales process can take a period of days or weeks but extremely rarely will take more than two months.
The benefits of staging are so evident that in an NAR survey of Real Estate Agents who are forced to keep up with trends in competitive urban markets, 85% responded that they recommended staging.
And why is that?
As we’ve discussed:
• At the lower side of average, staging is an investment in which you double your money.
• At the higher side of average, staging is an investment in which you 10X your money.
• Staged properties bring in more visitors, so they’re more likely to get an offer.
• Staged properties can sell like hotcakes, sometimes within 24 hours.
• Obviously, most homes last longer than 24 hours on the market, However, staged properties are almost never on the market for more than 2 months.
Is doubling your money in less than two months worth it?
I guess the question is:
Can you afford not to stage?