To Stage or Not to Stage

From Maine Realtor Magazine, Winter 2018

I remember as a kid  watching my aunt get her home ready for an open house. She warmed the oven and threw some cinnamon into it. She said it would make the house seem cozy, and appeal to more people. And she was right.

Today’s version of “cinnamon in the oven” is a little different, but the principal is the same. A home on the market must be appealing and valuable to as many people as possible. And it must outshine the competition.

What exactly does that mean?

A successful home sale requires three components: A competitive price, an effective realtor and a great presentation of the home. Great presentation, or staging, can mean a lot of different things, depending on the property. It can be as simple as rearranging the furniture, removing clutter and hiding the litter box. Or it can mean new paint and replacing the counter top. And if it is vacant, it might benefit from rental inventory.

Either way, the property must measure up to its perceived value. If two similar properties are priced the same, and one is free of repair needs and appropriately furnished, its perceived value will be far greater when compared to the property that, for the same price, has peeling paint, clutter and missing shutters. Either the pricing needs to be adjusted or the condition of the second property needs to improved. More on that in a moment.

Buyers will compare every property they’re looking at.   They are more sophisticated than ever before, and expectations are high. Gone are the days of a buyer visiting the home before knowing a lot about it. Buyers today are looking at properties online before deciding if it’s worth the visit. The warm scent of cinnamon has been replaced by virtual tours and professional photographs, as the first hook to engage their interest.

Back to improving the condition of a property, there are a lot of things worth doing and many that are not. This is where you need to do a little math, have an experienced realtor who knows the market, and an experienced stager who is focused on the sale of your home. After providing a staging consultation, I may hand the seller a list of suggested repairs and improvements that will cost $12k. We have already determined that the price needs adjusting if its condition is not improved, in order to compete with other similar homes on the market.

So why not just lower the listing price by $12k and skip the headache of having the work done? Because the repairs and improvements are worth a lot more than what you will pay for them. Without implementing the repairs, the adjusted price will likely be dropped by more than the $12k it will cost to make them happen. Why is that?

Perception.   A buyer who sees issues will also see a task list awaiting them. They will also over estimate the amount it will cost to have the work done when they move in. And when they see the obvious, ignored issues, they might wonder about the issues that are not as obvious. They can lose confidence in how the home has been cared for.

Staging is not inexpensive. But neither is an unsold house. Staging is almost always less expensive than doing nothing.   If $12k in repairs means that the listing price does not get reduced by $20k, and if it means the home doesn’t sit for several months with carrying costs, then it clearly is worth the investment.  Who typically pays for staging?

Every transaction is a bit different. And I do not get involved in the terms of the contract between realtor and seller. I have been paid by both over the years. But I have seen firsthand the more the realtor can get behind the idea of staging, the more confidence the seller will have. Sometimes the realtor will pay a portion or pay upfront and get reimbursed. Sometimes the seller will pay. That is between the realtor and the seller.

At a minimum, a stager should evaluate the property for improvement opportunities.   You may find that it needs very little. Or you will be armed with a report that details important suggestions for improving your competitive edge. Otherwise, you may be leaving money on the table.

From Maine Realtor Magazine, Winter 2018

 

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