THE STAGING QUESTION: SHOULD OR SHOULDN'T I?

[Marcin Chojnacki]

I get asked this question a lot...is staging really worth it? The answer isn't as simple as it may seem. Many pro's will always say yes! I will say...IT DEPENDS.

There's many unique situations in real estate where your project will not fit the model or blueprint that might be considered as a "business standard". Standards vary from market to market so I will be explaining my experience in the Chicago land market.

BENEFITS 

- For starters your home will literally look like a model home! Many people are unable to visualize how the house they are viewing will look once it's furnished, this follows the same concept of why you shouldn't walk a prospective buyer through your flip until rehab is fully complete; visualizing a finished product is difficult for many.

- Quicker resale times. Staged properties on average sell much quicker than their non staged counterparts. You are knocking most potential buyers off of their feet as soon as they walk in the door. 

-Higher sales prices. On average staged homes also will sell for a higher price than a non staged home. When deciding whether or not to to fork over the few grand it will cost you to add designer furniture into your property always remember this: A few thousand dollars will ALWAYS be less expensive than a $10,000 price drop to increase traffic. 

-Amazing photographs. I'm not sure on the exact percentage here, but I think it's safe to say that 90% or more of individuals (especially first time home buyers) start their search online. Your pictures literally will make the first impression on shoppers. As they always say "You never get a second chance to make a first impression". 

-You literally give the buyer's agent and the buyers a place to sit and discuss. I personally think this is very beneficial. Let's use a vacant house for example: Buyer's walk in, they like the home but don't love it. They want to discuss price, terms, etc with their agent. There is literally no place to sit so they do it standing up in an empty house with an echo. Not a very comfortable situation to be in when deciding on a VERY big life decision. The more comfortable your buyer's physically feel, the more comfortable they will be with deciding to move forward with your property. With a staged house you provide them the atmosphere needed to feel comfortable enough to make a decision. Add some beautiful aromas, set the perfect temperature and voila!...HOME IS SOLD.

-Wow your buyer's appraiser. Many people will fail to factor this in before making their decision. Just like your buyers were amazed, when they decided to submit the offer to purchase your home, their appraiser likewise is human and can be subject to the same wowing effect! This can increase your chances of the home appraising out for the offer price (or higher) and will prevent you from having to cancel a deal or be forced to lower the price. However this does come with some restrictions; which I'll use to lead into the disadvantages of staging (or when you shouldn't stage). 

DISADVANTAGES (OR WHY/WHEN YOU SHOULDN'T STAGE):

-Appraisal. I know this sounds like I'm contradicting myself but let me explain. When you are selling a property in a neighborhood where EVERY house is almost identical, then it will be VERY hard to get the property sold for a premium. Even if potential buyers love your house (because of the staging) and offer you more than comparable listings, your home will likely not appraise out for more than the one down the street. This is especially true in areas where the sales prices are under 200k. Even if you wow your appraiser he will see that all surrounding homes are the same size, same beds, same baths, same layout, etc. While his breath may be taken away by the beauty of your home his analysis later on will quickly bring him back to senses as almost all his comps are very very similar. 

-Money. Yes staging costs money and it is not cheap. A good staging company that uses top of the line furniture, designers, photographers can easily run you over $3,000. As stated above, in the advantages section, this is still lower than a possible price drop of 10k. However this concept doesn't apply as well when your resale price is mid to low 100's. If you are selling a property for 120,000 and you know similar properties have sold for about the same amount, it will be very very hard for you to get an extra 5k on the resale end of your home. In this scenario the total cost of staging is 2.5% of the value of the house (that's a big chunk!). It is much easier to get an extra $10,000 to even $50,000 on a property that's worth $500,000. On this home the total cost of staging is a mere 0.6% of the value of the house. It's much easier to recoup the cost of staging by enticing your buyers on properties that are more expensive. The $3,000 investment can put an extra $10,000-$50,000 in your pocket on higher end homes.... much much much harder to do if your home is worth $120,000. 

As a general rule of thumb, anything over a $200,000 resale price I stage and anything under $200,000 resale price I do not. Many times the more expensive the home, the more unique the layouts can become, the more the buyers, buyers agents, and appraisers will be able to sway in your favor. 

Attached are a few photos of a property we flipped that we staged. It sold in 5 days for $255,000 (about $15,000 more than current comparables were suggesting).

Thanks for reading and Happy Investing!

Respectfully,

[Ellie Hanson]

Been flipping for a few years and decided to stage for the first time this last house bc it's 632 sq ft. Staging makes it feel bigger and now we know for sure a queen bed fits no problem. Didn't use a staging company for thousands tho. Used a furniture leasing company (Aaron's) that was $220 a month. And they deliver and set up.