Underwater home staging? It's all about the net.

By
Real Estate Agent with Watson Realty Corp
I hear all the time that sellers and Realtors believe that home staging just isn't worth the investment in properties that are "underwater". Short sales, or listings where the seller has to bring money to the closing table often discount the idea of home staging completely. Agents are afraid to tell the seller that 'more money' needs to be spent and sellers feel frustrated and angry at the thought. 
 
Today I'm going to share two videos with you showing the point of view from the Stager (me) and from a home seller. I was not the stager or the agent for the seller in this case, Angela Batchelor from Wilmington, NC was. I think when you see the two points of view, it may make you think differently. 
 
Next, I'm going to share some numbers to back it all up. What I love about math is that it is pretty black and white. Sure, statistics change and then the math adjusts accordingly, but all in all, our market and numbers haven't changed that much. While homes are selling much more quickly today than they may have been in 2010, what is true is that if they are not properly priced and presented, the days on market (DOM) is not much better. Buyers complain about inventory levels, but they are out there... they just aren't what the buyer is looking for today. 
 
 
Now for the seller's opinion... 
 
 
Now, let's look at some cold hard numbers.
 
  • The National Association of Realtors (NAR) said that in 2010 the average home sales price in the US was $173,100.
  • Zillow said that the average home took 1% in price reductions per month
  • Trulia said that the average price reduction during the listing period was 9% for homes under $2M, homes over $2M it was 14%
  • The Real Estate Staging Association (RESA) said that the average DOM reduction was 78% for staged VS non-staged homes.
Now for the alignment of each statistic across all platforms.... 
 
RESA staging statistics
 
The above study shows that 126 homes were listed on the market for approximately 9 months prior to staging
 
78% of 9 months = 7.02 months saved…. 
 
(Zillow & Trulia stats merge here)
 
$173,100 x .0075 = $1300 average mortgage cost
$200 estimated Carrying Costs
Monthly costs ($1500) x additional DOM (7 months) = $10,500
Avg price reduction (1% x 7 mos) = $12,117
Total savings?  $22,617

When all is said and done, the net savings in this example is likely to be around $20,000 (after we subtract the cost of staging). Home staging is not an expense. It is an investment. This is all about the NET PROCEEDS. How much less does a seller have to bring to the closing table? How many fewer months will they stress over the additional monthly mortgage costs? Will they be able to short sell instead of losing their home to foreclosure? 
 
Eventually, with or without staging, the money will be spent. Will it be spent in additional mortgage costs, price reductions, money brought to the closing table, or will you rip the band-aid off, stage it and actually sell it now? 
 
PS. I just created a new home staging infographic that showcases the statistics I just presented. 
 
 
Thank you for reading... Underwater home staging? It's all about the net.
Posted by

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 Author Bio: Melissa Marro, Home Staging Industry leader, Realtor, and entrepreneur offers a unique perspective on New Home Construction, Resale Residential Real Estate, and Home Staging

For more information on buying or selling in the St Augustine, St Johns, Jacksonville, or Ponte Vedra area, visit StageListSellNEFL.com or call Melissa Marro (marro.melissa at gmail.com), Watson Realty, for more information (904-466-2093).

 

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Re-Blogged 6 times:

Re-Blogged By Re-Blogged At
  1. Athina Boukas 09/11/2012 06:36 PM
  2. Michelle Carr-Crowe-Selling Silicon Valley Homes in Top Schools San Jose, Cupertino, Saratoga, Palo Alto-Just Call 408-252-8900 09/11/2012 06:47 PM
  3. Heather Cook 09/12/2012 12:42 PM
  4. Marie Fox 09/12/2012 04:46 PM
  5. Linda Thompson 09/14/2012 02:22 PM
  6. Cheryl Ritchie 09/16/2012 05:33 AM
Topic:
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Tags:
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Ambassador
1,600,717
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 800-610-7253 DRE01267479 - Costa M

Melissa - I think it would be easier to talk a seller into it who was bringing money to close than to get a short sale seller to do it.

Sep 12, 2012 10:31 PM #30
Rainer
47,732
Amada Slade
Ballenger Realty, Beaufort SC - Beaufort, SC

Melissa, What an amazing job you did with that post.  Wonderful info.  Well deserved feature. Congrats.

Sep 13, 2012 04:28 AM #31
Rainmaker
420,201
Melissa Marro
Watson Realty Corp - Saint Augustine, FL
St Augustine, St Johns, Ponte Vedra
Christine - it is definitely easier to convince a seller that has the money over a short sale customer. A lot depends on WHY they are doing a short sale.
Sep 13, 2012 08:52 AM #32
Rainmaker
420,201
Melissa Marro
Watson Realty Corp - Saint Augustine, FL
St Augustine, St Johns, Ponte Vedra
Amanda - thank you!
Sep 13, 2012 08:53 AM #33
Rainmaker
89,811
Linda Thompson
Selling By Design-Staging - Fresno, CA

Wow Melissa, another info home run!  Thanks for the post. I reblogged it to localism hoping to help educate the public here in Fresno CA.

Sep 14, 2012 02:37 PM #34
Rainmaker
420,201
Melissa Marro
Watson Realty Corp - Saint Augustine, FL
St Augustine, St Johns, Ponte Vedra
Linda - thank you! I will go check put your reblog!
Sep 14, 2012 02:52 PM #35
Rainmaker
328,299
Julia Maher
Nestings: Connecticut Home Staging and Model Homes - Fairfield, CT
Connecticut Home Stager

You've presented an excellent business case study, Melissa!  We'll put it to good use.

Sep 15, 2012 09:40 AM #36
Rainmaker
420,201
Melissa Marro
Watson Realty Corp - Saint Augustine, FL
St Augustine, St Johns, Ponte Vedra

Julia - Thank you! 

Sep 15, 2012 10:45 AM #37
Ambassador
1,610,874
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Melissa- I have to apologize for coming so late to this.  I read it when you posted it and then had to leave for an appt.  Your video was perfect!  Your presentation ... the video from the seller... all were perfectly presented.  

Sep 15, 2012 03:51 PM #38
Rainmaker
420,201
Melissa Marro
Watson Realty Corp - Saint Augustine, FL
St Augustine, St Johns, Ponte Vedra

Kathy - I appreciate you taking the time from reading all the blogs that you read to stop by mine. I also appreciate the very kind email you sent. 

Sep 15, 2012 07:42 PM #39
Ambassador
1,610,874
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224



      
  Thanks for the Ah-ha moment!
Featured you in my Weekly Post!

Sep 15, 2012 08:58 PM #40
Rainmaker
722,982
Cindy Edwards
RE/MAX Checkmate - Johnson City, TN
CRS, GRI, PMN - Northeast Tennessee - 423-677-6677

Well you certainly know your numbers and your business.  You present it very well.  Nice post.

Sep 16, 2012 05:27 AM #41
Rainmaker
1,771,555
Debbie Gartner
Floor Coverings International - Westchester NY & Stamford CT - White Plains, NY
The Flooring Girl - Westchester hardwood flooring

Great stats here and logical argument.  In our area, the avg home price is around 600,000 - 650,000 so I would imagine that stats would be magnified.

All that aside, I think that everything depends on the context of the home and how much money (if any) the seller can spend.  For some, the #'s may add up that it's a smart investment, but if they literally have no money, it may not be an option.  Alternatively, if they could finance it somehow, maybe that would help.

Also I think there is gray area as to what staging is. Many times the issues are repair that is needed (e.g. floors, carpet, paint, broken items, water damage).  It often seems that some of these items should be attended to first as they transfer.  A stager may help point these out.

Sep 16, 2012 05:37 AM #42
Rainmaker
465,672
Gay E. Rosen
Houlihan Lawrence - Larchmont, NY
Honest, Hardworking and always Professional!

Melissa-  great videos making your point perfectly- and those facts! WOW! Congrats to you and your expertise.

Sep 16, 2012 06:04 AM #43
Rainmaker
1,783,104
Dorie Dillard
Coldwell Banker United Realtors - Austin, TX
Realtor-Canyon Creek- NW, Austin TX Homes For Sale

Good morning Melissa,

I just came over from Kathy's post this morning and she is right..this is an excellent post! Your videos are fantastic and really gets your points across! Thanks for the informative post.

Sep 16, 2012 06:44 AM #44
Rainer
151,803
Anna Tolstoy
Coldwell Banker Residential Brokerage - Natick, MA

Melissa, great video - and great idea interviewing a seller who honestly says he was first quite aganst the whole staging idea, but saw what difference it does indeed make. 

Congrats on participating in the challenge, we are waiting for more video blogs from you!

Sep 16, 2012 08:18 AM #45
Rainmaker
420,201
Melissa Marro
Watson Realty Corp - Saint Augustine, FL
St Augustine, St Johns, Ponte Vedra

Kathy - Thank you for the feature!

Cindy - I'm a numbers girl... =)

Debbie - You are absolutely right. The higher the price tag, the more this is amplified. I also agree that things like carpeting, painting, maintenance, and repairs should be taken care of before staging. If there is only room for fixing vs staging, then fix things. As we like to say in the south... don't put lipstick on a pig. 

Gay - Thank you. The numbers are always a shocker to naysayers or those who aren't familiar with the process & success rates. Still, in my markets, we've proved it time and time again.

Dorie - Thank you for stopping by and the kind words.

Anna - Another Realtor, in another market, who is a friend of mine and uses staging for every listing actually did the video with the seller. I've used it a bunch of times since she authorized me using it. It is really great. Of course the other video was my perspective.

I also did two other videos on these blogs: Model Homes vs Staged Models... What's the Difference? and The best new home builder benefit of all (and no one talks about it).

Sep 16, 2012 09:35 AM #46
Rainmaker
843,841
Lyn Sims
RE/MAX Suburban - Schaumburg IL Real Estate - Northwest Suburbs of Chicago - Schaumburg, IL
Schaumburg Homes

Great presentation but I think that better stats can be used than from Z & T. None the less, great insight for sellers who wonder why they should even think about the costs. Extended handling costs are never thought of for some reason.

Sep 16, 2012 01:40 PM #47
Rainmaker
420,201
Melissa Marro
Watson Realty Corp - Saint Augustine, FL
St Augustine, St Johns, Ponte Vedra

Lyn - I would agree that in general there are issues that the real estate community has with Z & T. That said, I needed numbers from a source that the public likes... and one that isn't in the staging field. NAR actually does say that staged properties sell for 5-20% more than unstaged, but that's such a vague number. I needed housing stats. 

Sep 16, 2012 02:21 PM #48
Rainmaker
1,494,927
Sally K. & David L. Hanson
Keller Williams 414-525-0563 - Brookfield, WI
WI Realtors - Luxury - Short Sale - CDPE, REDS

  We stage homs that are shorts ALL the time....especially with divorce...he took the....she took the....putting it all together for putting the best house forward is what shortens the time on the market and gets the best price..right side up OR upside down !

Jul 04, 2013 02:56 AM #49
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Rainmaker
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Melissa Marro

St Augustine, St Johns, Ponte Vedra
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