Home Staging is a Necessity, Not a Luxury in Today’s Market

How Staging Works

Staging Facts

Return on Staging Investment: Calculate Yours!

Avoid Common Mistakes Sellers Make

Home Staging is a Necessity, Not a Luxury in Today’s Market < return to top >
In our current real estate market it is more important than ever to employ professional
home staging to help sell a home. The market is slow, but there are properties still selling.
One may think it’s just the short sales and foreclosure properties that are moving, but it’s not.

Certainly there are some smart investors scooping up those bargains, but for traditional homebuyers,
life goes on. People continue to get married, grow their families, get divorced, downsize and relocate
– causing them to need a new home. And these buyers are typically looking for an attractive,
move-in ready home.

That is where staging comes into play. Staging should be part of every seller’s exit strategy.
And, for the best financial results, the home needs to be staged from Day One on the market!

How Staging Works < return to top >
   
   
__Before___________________________After

• Staging makes a home look its absolute best to stand out above competing homes and enable
  buyers to visualize themselves living there.

• Staging serves as a visual aid for buyers to help them see the home’s possibilities by showing
  how the space can be used and what size and/or how much furniture best fits the space.
  
  
  

• A staging investment is significantly less than a price reduction or a hard money payments.

• Most sellers see a substantial return on their investment in professional home staging because
  it can significantly reduce their holding costs.

• If a home is vacant and not staged it often will be considered neglected and/or a distress
  sale and the buyer will expect a deeply discounted price.

• Staging is often tax deductible.
  

Avoid Common Mistakes Sellers Make < return to top >
1. An all too often sellers consider home staging a luxury rather than a necessity. That can be a very
costly mistake.

With the current condition of the Phoenix real estate market, to get your home sold it must have
the best presentation, be comparably priced and be marketed well – the days of simply sticking a sign
in the front yard are long gone!

2. Another costly mistake sellers make is to put their home on the market months and only
have it staged if the home hasn’t sold.

Staging helps at any point, but to minimize your holding costs and increase your bottom line
– have your home staged prior to going on the market. Otherwise the listing gets stale,
no one comes to look at the home anymore and then it is no longer perceived as an attractive
property. If it is vacant and not staged it often will be considered neglected and/or a distress sale
and the buyer will expect a deeply discounted price.

Return on Staging Investment: Calculate Yours! < return to top >
If you are watching your wallet and are hesitant to invest in professional home staging, use the
following formula to help in the decision-making process.

Formula
1. Determine what the holding costs of the home are per day:
Calculate the monthly cost of the mortgage including hard money, property taxes, utilities, H.O.A.
fees, and maintenance and then divide that total monthly cost by 30. The result is the cost per day: X.

2. Determine the average length of time it will take to sell the home: 
Multiply X by the average number of days on the market for the home's neighborhood.
The result is the cost per day: Y.

3. Determine the total holding cost by multiplying the cost per day (X) by the average number
of market days (Y).

4. Determine the cost for professional home staging. This will depend on a number of variables,
but typically is about 1% of the sales price.

5. Consider that professional staging can reduce the number of days the property is on the
market to 50% or more, depending on the property and the stager's ability. To determine
the return on investment for staging subtract the total staging investment from the total
holding costs of a staged home versus a home that is not staged. Be sure to factor in that
staging is often tax deductible.  Most investors see a substantial return on their investment
in professional home staging because it can significantly reduce their holding costs.

Example
The home is on the market for $300,000 and the holding cost is $100 per day.
The holding cost, based on the average number of days it takes to sell a home in that
neighborhood is $9,000($100 per day holding costs X 90 days - average number of days
to sell in that area).

The staging cost is $3,000, based on the home selling in half the time of a property that
has not been professionally staged or 45 days. There would be a $6,000 net savings if
the staged home sells in 45 days instead of the average 90 days ($9,000 holding costs
minus staging investment), making professional staging a fraction of the holding costs.
The seller should also equate the staging investment to making a typical 5% to 10%
selling price reduction, which in this case would be $15,000 to $30,000, significantly
more than a staging investment.

How quickly the home sells depends on the staging company and how successful it is. Be
sure to verify the average number of days to sell of the staging company you're considering
because the results do differ. View Enhanced to Sell’s stats.

For the best financial results, stage the home before it goes on market. This will avoid it
being becoming stale and perceived as an unattractive property. If it's vacant and not staged it often
will be considered neglected and/or a distress sale and the buyer will expect a discounted price.
This results in you having holding costs for months and then still needing to make the staging
investment to avoid a distress sale.