Will staging increase the value of a home?

By
Home Stager with Home Matters

I know, some of you will think that the world must be coming to an end...  Two blogs in one week, what the heck is ole Gary doing.  Well, I woke up this morning feeling compelled to talk about something on my mind so set back for a few moments and listen to me squawk.  (Lots of birds this week on AR)

buzzard

I have read a couple of comments from our friends in the Real Estate Agent arena lately that make me pause and consider what they believe Home Staging will or will not do for their clients.  One comment in particular made me think that there may be a very large disconnect between what the perception that Home Staging does for a homes selling price versus what it really does.  A statement was made that a home listed in the $960,000 range was Staged and sold 10 months later for $720,000, far below the initial asking price.  The inference was that Staging certainly did not help this home sell quickly or for the $960,000 asking price.

Please, help me here; are their any Stagers that think that Home Staging will increase the overall price that the home is actually worth?  Our company, Home Matters, has always looked at Staging as a way to increase the marketability of a home, with-in the price range in which it competes.  The benefit of Home Staging as we have told the story here in Indianapolis is that if your house is priced appropriately among a number of houses in that price range, that staging the home will move it up in the ranks of desirability among those homes.  We have never conveyed that Staging will make the home worth more than its real intrinsic value.  I'm not sure what has happened that some would even consider buying into the thought that Home Staging will make a homes overall value increase over what the market will bare.  In the example above, what could possibly be done to a home that would make it worth $240,000 more than the market would support?  Where have we gone so wrong as to instill the thought in agents, any agents, that this is what staging will do?  I could not personally look someone in the eye and tell him or her that we can do this without blinking like crazy.  The agents, builders and home owners that Home Matters works with here in Indianapolis understand that we increase the marketability of a home and that increase will lead to a successful sale, at the appropriate price.  We don't need to try and sell them snake oil, they are happy enough to just be competitive.

race

The best way I can illustrate my thoughts on what Home Staging is designed to do, follows with this illustration; There are 250 homes in a northern suburb of Indianapolis, in the price range of $720,000 to $750,000, up for sale.  In this same area there are at any given time, 50 homebuyers looking for homes in that price range.  So at any given time there are only 50 possible winners in the home seller ranks.  Our contention is one thing and one thing only; we can increase your ranking among those 250 competing homes that are on the market, in that price range.  From a pure mathematical standpoint, every home that ranks from #51 to #250 will not compete for the 50 homebuyers.  Those homes ranked between #51 and #250 are the homes that make up the staggering 55% (Indy market) that linger on the market, month after month, eventually expiring, moving from agent to agent and some even withdrawn from the market by the seller. 

No where in this equation or in what we say our goal is for staging homes do we say that "We can make your home sell for a bunch more than it is really worth."  Having said all of that, I have heard the stories of places on the west coast or maybe in Manhattan or other areas where historically there is the opposite effect where you have 10 homes for sale and 50 buyers wanting those 10 homes.  Obviously this causes bidding wars that can lead to sale prices above the real value, what ever that is, but this is not real life for the other 95% of us.  The other 95% of us simply offer a way for homeowners to compete at the top of their heap, what ever that is.  

I have to ask; does any staging company out there really say that they can get a home seller more than their home is really worth?  Does anyone even infer it? What has taken place that some agents believe this is what we proclaim to do?  Please help me in my endeavor to seek to understand... I think my next post will be titled "How many condition issues have you covered up this week, Mr. & Mrs. Stager?"  To address the other perception that really bothers me.

The squawking is over now. 

I would really like to hear your feedback.

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Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Hello Cathy, what you described is one of the two real outcomes that Staging can provide for a home seller.  Sell it quickly and potentially increase the amount with-in the range that the seller can realize.  The home owner you talked about in your comment is very luck to have sold so quickly.  Our experience has been that the best/quickest reaction from Staging comes with-in the first few weeks a home is listed and you get that initial surge of buyers.  Thanks Cathy for your comments.
April 14, 2008 10:27 AM #24
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Julie & Amy, thanks for reading my post.  Ah yes, the twin cities are.  Know it well.  At least the right down town part.  What you stated in your comments is exactly what we believe to be the truth of the State of Staging for the biggest part of us.  The overall notion that we can do for you, just like what happens in Beverly Hills, just points out that we have to continue to educate on a national and regional level.  Thanks for stopping by to see me....
April 14, 2008 10:36 AM #25
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Hello Kristi, In all honesty, when we go into a home we rarely know when a home is overpriced or not.  Area dictates so much of home value here in Indianapolis, that an apples to apples comparison is just not possible.  I do understand that the home seller is in a strange place right now in our area, in that many homes have not appreciated or have depreciated over the last few years.  The sellers in the Midwest I think are use to a very predictable appreciation and for the first time that just is not the case.  Too many are just not getting past the emotional part of buying into the depreciation that has taken place.  The part that bothers me is the fact that many homes are listed every day, by agents that know better.  I am really stuck as to why an agent would bother taking a listing that they know will not sell.???
April 14, 2008 10:46 AM #26
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Utah Dave, nice to hear from the west.  What you stated does in fact make perfect since, it fact, that is the truth on the matter.  That fact is supported by all of the statistics I have seen.  Sell it quicker.... Saves on carrying costs.  Sell it for top dollar with-in the price range.... Earns the most possible.  Thanks for reading my post.
April 14, 2008 10:51 AM #27
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Tori, nice to hear from you.  Recently I have been made aware of these statements, and I believe them to be made based on the results of some of those areas I defined in my post.  While that may be their reality, it certainly is not representative to the rest of the world and would be considered not only a bold statement, but stretching of the truth for most of us in our areas.  Again, education, education, education.  It is our jobs to talk about the reality for our own areas.
April 14, 2008 10:57 AM #28
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Hey Craig, I think Utah Dave represents one of the three groups out there right now, both agents and home sellers.  There is the group that clearly understands the concept and understands how it increases Marketability, there is the group that are in total denial, for many reasons, some reasons being ok because of their uniqueness, and then there is the group in the middle that are simply waiting on the message that is delivered to them in such a way that it will strike a note that makes for clear understanding.  I think it is clear where the educational opportunities are..??  Thanks for stopping by my friend....
April 14, 2008 11:06 AM #29
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Maureen, what you said is a familiar story for us also.  We have on occasion had to tell the home owner that condition issues must be addressed 1st, then staging comes 2nd.  We also suggest to these owners that they hire an inspector that will be able to evaluate and recommend on all issues.  We tell them that condition issues will be found, it's all a matter of when.  You actually made me think about another area of heart burn for stagers.  Many times stagers are blamed for covering up inspection issues that we are not even aware are issues.  Stagers advise home sellers on only the condition we can see and are known to be a problem.  We do not know if your circuit breakers are up to code, we do not know if the wiring is ample, we do not know if the plumbing is good or not.  This is not a cover-up on the part of the stager. We don't proclaim to be Stager/Inspectors.  Maureen, as always it is a please to see you visit.
April 14, 2008 11:17 AM #30
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Hello TerryLynn, actually you are the perfect person to ask my newest burning question of...  If an agent takes on a listing, what will it cost the agent to market that listing?  If the listing does not sell and the seller moves on to another agent that they think will get them their inflated value, is the first agent compensated in some way for their expense?  So, if it costs for marketing and if the seller moves on having never sold the property leaving the agent with an expense they cannot recoup...  Wouldn't this practice be better described as gambling, rather than Real Estate sales when dealing with an overpriced home?
April 14, 2008 11:26 AM #31
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Hello Becky, By all means use my example.  It is so painfully simple, but I think simple is what people understand most.  I really don't understand the whole concept of a home owner thinking that anything you do while selling a home, will get you more than simply the top of the range...  Much older than the concept of staging are the publicized facts that most changes to a home will not increase it's potential value, beyond the top of the scale.  It must be that emotional and visual connection to perceived value, even in the owners mind.  This reminds me on the old SNL skit by Jon Lovett, "Yeah, I might be able to get more, wait, I can get allot more, Yeah, no wait, I can get rich, yeah, that's the ticket."
April 14, 2008 11:35 AM #32
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Hello Elaine, What you wrote is so very true.  I'll inject a short story, we had an agent that we made contact with several years ago.  She had a $450K home that was empty.  After two years since the initial contact, the home still set there empty and for sale.  Out of desperation she asked Linda if she would stage the home.  We asked her to wait until the listing expired, then we would stage it, she could then re-list it and see what happened from the first burst of buyers that come with new listings.  The home sold in 38 days, at 98% of the list price, the same list price that the home had been at for almost a year.  Her take on the whole matter is that she still did not understand what caused this effect.  She didn't understand the dynamic that drew in a buyer.  She even told Linda that frankly she wasn't sure if it was just that everything Linda touched had some sort of "Good Luck" now associated with it, but she did now believe that she needed talk her sellers into having Linda stage her listings, just so the magic, or good luck or whatever it was attached itself to her homes.  The reality of the situation is just what you said, the home simply stated to compete among the other homes in the top of the range.  No magic, no good luck, just marketing.  Elaine, thatks for coming to read my post, I am always happy to see you stop by.
April 14, 2008 11:54 AM #33
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Hello Kathy, I sense that many markets are becoming very competitive, I know ours is.  Fortunately we are finding that many are catching on to the fact the Staging can help increase a homes ranking within that competition.  Thanks Kathy...
April 14, 2008 12:31 PM #34
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Well my darling, Of course I've been listening, and watching, and learning.  Your a good teacher, except I still couldn't physically stage a chicken coup....  When are you going to teach me that part?  How busy has it gotten when we talk to each other through a national Blog site?  See you tonight.
April 14, 2008 12:34 PM #35
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Hello Kelly, Thanks for your comments.  I think that what you tell your clients is the high road approach to what you can say with confidence.  I beleive as home sellers come to grips with the repositioned housing market, that is all that they really need to hear, not some exadurated stretch of the truth.  Thanks again..
April 14, 2008 12:39 PM #36
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Good Morning right back at you Cathy, I am a native of Fontana (Now there is a good place to be from).  I was born in Redlands, grew up in Fontana and moved away in 1970 to Arkansas to work for Walmart.  I have been back several times over the years and the area has truly changed for the better although those that live there now look at me strange when I say they.  The Fontana that I grew up in was noted for the Steel Mills and for being the birth place of the Hells Angels.  The Fontana of today is know for lots of Industry and the Home of the California Speedway (which use to be the Steel Mills area).  Quite a different perspective than when I was there.  I remember my first trip to Hollywood was to see the play "Hair" which was at the Aquarius Theatre.  Interesting place, it was.  It's actually nice to find someone that was really born in California, most living there now are from some place else. 
April 14, 2008 12:47 PM #37
Anonymous
Anonymous
Anonymous

they definitely sell more quickly that's for sure

April 14, 2008 12:50 PM #38
Rainmaker
270,523
Cathy Lee
CL Design Services Home Staging - Danville, CA
ASP, IAHSP, RESA Danville, CA
LOL!  I went to see "Hair" at the Aquarius Theatre in June 1969.  I will never forget it as I did not know about the nude finale.  My father worked at NBC studios as a set designer/graphic artist, so I grew up staging-I went to work with him all the time!!! 
April 14, 2008 11:22 PM #39
Rainmaker
251,689
Robert Machado
HomePointe Property Management, CRMC - Sacramento, CA
CPM MPM - Property Manager and Property Management - Sacramento Area
I can see a staged home selling for more within its neighborhood price range and certainly quicker.  But you have to have something to work with in terms of overall condition and location too.
April 15, 2008 12:22 AM #40
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis

Chadd, they certainly do that. From this standpoint there is obviously money saved in what does not have to be spent as carrying costs.  Thanks for you comment.

Cathy Lee OMG, It would have been the summer on 1969 when I went to see Hair also.  What a coincidence.  I will always remember on the walk to the theatre that it felt like I was part of a carnival.  What a bunch of interesting folks there were on the streets at that time.  So your dad was one of the true "Original" Stagers?  How cool is that.  You probably knew more about staging at 5 than most of us still know.  Very neat.  How did you wind up in Norther California?  You wouldn't believe how I got from So Cal to Arkansas.  What a culture shock that was.....

Robert, you are absolutely correct.  There are a lot of factors that go into where your home falls in any price range.  If you want it to sell at the top of the price range it fits in, make sure the condition is great and it's staged for optimum marketability.  Thanks for your comments.

April 15, 2008 08:52 AM #41
Rainmaker
32,738
Chris Castetter
F.C. Tucker Company - Avon, IN
First Vice President

Gary,

Once more- excellent input for the home staging arena.  You have hit the nail on the head as usual.  I have to comment that while home staging may not increase the actual market or appriased value of a property, it will equal a faster sale and there is certainly value in that for everone involved!

April 21, 2008 12:23 PM #42
Rainmaker
71,131
Gary Barnett
Home Matters - Indianapolis, IN
Home Matters Property Stylist Group, Indianapolis
Hello Chris, nice to hear from you.  As we both know Staged homes, especially the ones staged just before being put on the market, can fly off the shelves, so to speak.  By the way, I see that you have some closings coming up soon...  Good for you.
April 22, 2008 07:51 AM #43
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Rainmaker
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Gary Barnett

Home Matters Property Stylist Group, Indianapolis
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