What is the ROI of Home Staging and Is It Worth It?
When home sellers put their homes on the market, the number 1 concern is usually how fast can they sell the house and how much can they sell it for?
Every home seller will want to get the best selling price possible on their home sales. Sellers are probably asking themselves questions like”: “What realtor will get me the most money?”, “What time of the year should I sell?”, “What can I do to sell my house for top dollars?”
Nowadays, staging is pretty common in the United States real estate market. In many cities like San Francisco, Chicago, New York, staging is essentially a must when someone is putting their homes on the market.
But many sellers still wonder: “Is home staging worth the cost?”
Obviously, there is no guarantee, and staging is an investment on something the sellers will part with soon. Still, it is a proven strategy in preparing and marketing the homes for sale.
The National Association of Realtors (NAR) now regularly publishes reports on home staging. In NAR’s 2019 home staging study, the study recommends staging as part of the marketing process of listing a home for sale.
As a home stager of more than ten years, it is not a surprising result to me. We turned many skeptical clients into believers. In a 2015 our blog posts about our own home staging stats, our own statistics show that:
-
97.68% of our projects were vacant home staging.
-
Out of the sold properties, 87.80% of our projects sold within 30 days.
-
Out of the sold properties, 88% of our projects were sold over-asking.
-
The price differences ranged from $100 – $405,000 over the original asking price, which translates to a 0.02% to 45.25% increase from their original listing prices.
-
Altogether, $4,443,985 more than the original asking price.
-
Average days on market (DOM) for our staged and sold properties were 17.58 days.
-
Comparing to public data from San Mateo County, the average DOM for residential homes in San Mateo County last year was 30 days (source).
-
According to public data, the smallest average DOM last year in San Francisco County was 28 days, for residential houses in Q3 2014 (source).
Staged Homes Sell Faster And For More Money
Stats have proven that well-staged homes sell faster and often for more money. What staging does is transforming the listing to target its potential buyers by creating an aspirational lifestyle the potential buyers want to buy into. Home stagers make design decisions to appeal to potential buyers’ tastes and likes. Below is an infographic that NAR has produced on staging.
In the same report, The National Association of Realtors found that:
-
40% of buyers’ agents cited that home staging had an effect on most buyers’ view of the home.
-
83% of buyers’ agents said staging a home made it easier for a buyer to visualize the property as a future home.
-
28% of sellers’ agents said they staged all sellers’ homes prior to listing them for sale. 13% noted that they only staged homes that were difficult to sell.
-
The most common rooms that were staged included the living room (93%), kitchen (84%), master bedroom (78%), and the dining room (72%).
-
A median of 10% of respondents cited that buyers felt homes should look the way they were staged on TV shows.
-
38% of respondents said that TV shows that displayed the buying process impacted their business.
Staging a home increases the dollar value of the home by between 6-10%
The Return On Investment Of Home Staging
When it comes to the return on investment for home staging, when staging a home, 22% of sellers’ agents reported an increase of 1-5% of the dollar value offered by buyers, in comparison to similar homes. 17% of respondents stated that staging a home increased the dollar value of the home between 6-10%.
Recently, Coldwell Banker also published a survey result that staged homes sell for more than 6% above the asking price.
Let’s say on average, a staged home sells for 6% above the asking price. That means:
-
For a $100,000 listing, that’s $6,000 extra in the seller’s pockets and $3,000 extra for the seller’s agent’s commission.
-
In the San Francisco Bay area, the current home median price is $1,365,700, according to Zillow. This means that the sellers can pocket an extra $81,942 and the real estate agent can stand to make an extra $40,971 on the commissions!
This means it is a win-win scenario for everyone involved, not to mention the extra 6% will more than pay for the initial investment of staging the home.
