We all know that cash can run short at the end of a renovation, and the cost of professional staging might seem like an unnecessary expense. What is the reality? Does staging really work?
Staging As a Marketing Tool
Some investors think of staging as an extra to consider if there are leftover funds when the work is complete. We’d argue that staging a fix and flip project is always a great idea that will pay for itself and then some. Here's why.
Professional staging involves more than simply moving a few pieces of furniture into a home just so the floors don't echo. Staging is not merely decorating, and there are industry guidelines, created by local and national staging associations such as RESA (Real Estate Staging Association), that apply. Staging sets a scene in a buyer's mind to suggest lifestyle possibilities. Effective staging highlights architectural features, focuses on views, enhances room sizes and minimizes flaws. Ideally, a buyer will not remember the details of furniture and furniture arrangement, but will know immediately that their own sofa and dining room set will fit, and that the master bedroom will accommodate a king bed.
Staging = Higher Price, Quicker Sale
More than half of buyers report that they are willing to pay more for a home that has been professionally staged, and 81 percent concede that staging influences their ability to "see themselves" living in a particular home. In addition, 96 percent of buyers' agents say that staging has an effect on how prospective buyers view a home.
If that doesn't make you sit up and take notice, consider this: according to Realtor.com, staged properties sell 88% faster for selling prices that are an average of 20 percent higher. These numbers are consistent for hot or slow markets and across a wide range of neighborhoods. What do these numbers tell us? Simply, staged homes sell faster and for more money. Even if buyers don’t think they would pay more for a staged home, they will and they do.
[Looking for more tips to maximize your sale price? See our blog about additional ways to Sell Your Flips Faster and For More Money...Here's How]
How Much Does it Cost?
Nationwide, the average cost of staging a vacant property is about $300-$500 per room. In the DC area, you can stage a small condo with a few key pieces of furniture and accessories for a few hundred dollars while staging a 4,000 square foot home can cost a few thousand. While that may seem like a hefty sum of money, it is almost certainly less than the first price reduction you would consider if a house doesn't sell quickly. When you add in the cost to carry a property an additional month or two, it becomes money well-spent.
A professional will provide stylish furniture in keeping with the home's style and price range, prepare a personalized plan and detailed staging schedule, and be cognizant of your needs, expectations and deadlines. The stager may also coordinate with a professional photographer and with your real estate agent. Eighty-eight percent of buyers initially view properties online, and will only schedule an onsite showing if that first impression is favorable. Staging helps to generate showings, and a well-staged home prompts a prospective buyer to submit an offer.
The business of fixing and flipping a property is a bit like walking a tightrope. Balancing time, costs and financial return requires steady and constant concentration. As you assemble your team, remember that staging is an important part of the mix, along with the quality of the materials you use and the strength and flexibility of your lender.
Brought to you by Walnut Street Finance, providing fix and flip, renovation and bridge loans to real estate investors in DC, MD, VA, and DE. One local stager Walnut Street Finance recommends is True House Design.