Sellers! Don’t put the cart before the horse!
If you know the meaning of this saying, you’ll know where I’m going with this when it comes to preparing both vacant & occupied houses going on the market. Don’t list your house until it has been properly prepared. Don’t be so anxious to sell that you do things backwards!
This happens so many times! I get a call from a potential seller wanting a quote to stage their vacant house before they put it on the market. Now you can’t stage a vacant house of any size for $500. When people realize it could cost anywhere from $1500-10,000, they will sometimes put it on the market without staging it to see what happens. Maybe it will sell without staging and then they will save all that money for staging! If it doesn’t sell in a couple of months, they will stage it. Here’s what could happen.
- The house doesn’t sell in the two months, so a price drop is encouraged by your Realtor. Often it is reduced by $5000 or $10,000. (Remember you can usually stage an average vacant house for 2 months for less than $5000.) Realtors often encourage a price drop, and rightly so in some cases, but they are not taking the hit like you, the sellers, are. If your Realtor is asking a 5% commission, it is actually split between the selling agent and the buying agent so that they get 2.5% each. If your house sells for $490,000 as opposed to $500,000, your Realtor will get $12,250 (2.5% of 490,000) as opposed to 12,500 (2.5% of $500,000). So for every $10,000 you lower the price of your house, your Realtor gets $250 less in commission.
- The house doesn’t sell in the two months, so the clients go ahead with the staging. However, the majority of the most interested buyers will have seen the house already in its unstaged condition. The most activity on a house will be the first 2 weeks after listing. After that, the momentum starts to diminish and the house will eventually become a stale listing. The buyers who have already seen it are not likely to come back just because it has now been staged. In fact, they likely won’t even know it has been staged. If it had been staged when they had seen it first they would have likely made a better offer than what any ‘new’ buyers will offer.
- The house sells in the first 2 months and the seller saves the staging fee. But they likely didn’t get the highest price possible. Statistics show that professionally staged houses sell for 6-17% more money than a comparable un–staged house.
Occupied houses also need to be properly prepared for a faster and more profitable sale. I will often do a consultation ($200 for average size house) for an occupied home and give detailed instructions of what they need to do to increase the sellability of their house. It could be instructions on which areas to paint. I also give the paint colors that would work best for buyers. It could be updating light fixtures, appliances, flooring , etc. It may just be the arrangement of furniture for optimum traffic flow, de-cluttering and de-personalization. It could include instructions for correct placement of art or advice about window treatments. It may include which pieces of furniture to remove or what pieces need to be added. Every house is different.
And sometimes the same thing happens with occupied houses. The sellers will often put it on the market first to see if they can sell it without doing all the work or spending all the needed money. But the most interested people will see it first and it will be un-staged. So the seller could lose a potential sale.
And if they decide to stage it after a couple of months, the most interested people will not see it staged. Also, the listing is becoming stale and the momentum is gone.
And whether vacant or occupied, the first impression for most buyers today is from the online photos. Buyers today eliminate houses based simply on the photos, especially when there are so many houses to choose from.
So, the moral of the story is that no matter how you look at it, staging your house BEFORE it hits the market is more profitable for the seller.