Is Home Staging Worth the Cost?

Real estate agents say that potential buyers make a decision of whether to buy or not within the first few seconds of seeing a house for sale. With such a small opportunity to make an impact, it is imperative for sellers to make the best first impression possible. In recent years there has been a growing trend of homeowners and flippers hiring staging companies to dress up their properties. Staging a house doesn't come cheaply. If a seller spends the money on staging, do they recoup that cost in the final sales price? Does staging help a property sell quicker? Is it worth it?

-staged bedroom and dining room

Builders have known for years the power of a first impression, and that is why they have a model home that is perfectly furnished and decorated. Buyers are attracted to a lifestyle, not just paint colors and flooring. A well-furnished and designed space can lead a buyer to have thoughts like: "I will be organized if I live here. I will have more quality family time in this cozy den. I will have amazing dinner parties with friends in this spacious dining room." And ultimately, "I will have a better life in this house." These thoughts may not always occur quite so clear and close to the surface, but they are happening at least on the subconscious level. Not may buyers will purchase a house that they don't think will improve their life.

A vacant, empty house doesn't have the same warmth and homey feeling. It isn't as welcoming. It even sounds unnatural, as walking and talking echoes throughout the hollow structure. When a house is unfurnished, buyers don't have as much to look at other than the imperfections on the walls, and the scratches on the floors. Staging brings in more color, more light, and multiple textures. It is the maximization of a house to appeal to buyers. Nearly all staging companies claim that hiring them will result in a house that sells faster and/or for more money.

There are a range of staging services that are available at different price levels. A seller could choose to stage only the living areas of a house, and leave the bedrooms empty. Others may include the master bedroom, or all of the bedrooms. If a house is still occupied, many staging companies will work with the residents' existing furniture, by rearranging and de-cluttering the space. A complete staging gives attention to all details, including rugs, lamps, and artwork. It adds softness through bedding and pillows.

Online photos and video tours are significantly more powerful with staging. The furnished and decorated house is more memorable and makes a better impression than an empty one. If rooms are painted in the same or similar colors, it can be difficult to differentiate between them. At times, realtor captions under the photos stating "bedroom two, bedroom three," are the only way to tell the rooms apart. In these instances, the house can be quite forgettable.

I have used a staging company for the past four renovated houses that I've had for sale, which includes three flips and one primary residence. Each time, the stagers (Prix de Solde in Nashville) have done a wonderful job and undoubtedly improved the presentation of my properties. However, it is nearly impossible to prove if the staging made the house sell for more money or more quickly.

In the spring of 2013, I completed an entire renovation of an East Nashville cottage. The finishes were excellent, the staging was superb, and we were hopeful for a quick sale. My real estate agent listed the house on a Saturday morning, and he held an open house on Sunday afternoon. By Sunday evening we had received four offers, and accepted one for full asking price. The market was such that the demand for buyers was strong, and the inventory was low. Would I have gotten just as many offers and sold the house for the same price without staging? Was the quick sale a result of the market dynamics, or the color palette of the guest bedroom bedding? I'll never know.

There are too many variables in play to pinpoint exactlly what makes a house sell, and it is difficult to perform an experiment that simulates the real market. It isn't as simple as having two identical houses side by side, with one empty and the other staged. Once buyers have seen the staged home, they can visualize and project that look into the empty one, and I doubt the sales price would be different at all. It is why builders usually only have one model home, and are able to sell future construction based on that example.

One study, called "The Impact of Staging Conditions on Residential Real Estate Demand," was conducted with more than 800 home buyers. The buyers were shown six different virtual home tours with varying levels of staging and design, including no staging at all, and some that was even "ugly". The results were that the buyers would all pay about the same price regardless of the decor. While that study might be telling of the impact of staging on virtual homes, I don't think it is conclusive about actual physical structures with buyers offering actual dollars. The results are not indicative of what real buyers experience when they step into a tangible house that is appealing or appalling.

I use stagers because they make my final product look the best that it can. With buyers doing so much home searching online, often the first impression of a house is through a computer screen or ipad. Staging adds a wow factor that an empty house doesn't have. Then I want that potential buyer to see the house in person and be even more wowed.

Although I deliberate over paying for the staging in every instance before the house is listed for sale, I view the expense as a cost of doing business. After the house has sold, I never regret paying for the staging. In some instances, I felt confident asking a higher sales price because the staging made the house look so good. In those cases I recouped the $2,000-$2,700 that I typically pay for the service. Ultimately, I keep hiring them because I keep selling properties for near the asking price or above it, and I don't want to interfere with a good formula.

Stagers can use an incredible sales pitch. They can claim that it helps houses sell for more money and more quickly. Neither of these claims are measurable because staging is never the only variable. The evidence cannot be proved or disproved. If the benefits are unquantifiable, how do we know if staging is worth it? We don't.