The Value of Home Staging in a Seller’s Market
Tara Wheeler, Owner
The late spring and summer housing market is typically favorable for sellers. Warm weather and more flexible schedules inspire prospective buyers to be more open to undertaking a home purchase. This heightened interest results in more visits and offers for homes, which can also increase selling prices. A recent report found that home sales finalized in May, June, and July net 7-10% above market value on average (1).
Despite the unprecedented events of 2020, the summer real estate markets in Delaware and surrounding areas have continued to prove advantageous for sellers. So, given the favorable conditions, you might be wondering if home staging is still worth the investment – the answer is YES! Home staging is a critical marketing tool that maximizes the selling price while increasing the speed of sale, regardless of the environment.
Here are 5 reasons that you need to stage your home in a seller’s market:
1. A staged home results in better photos, which are critical to building interest.
Engaging listing photos are your home’s currency online. The more appealing the images, the more views your listing will receive, and you only have one chance to make a first impression. A new listing receives 3 times more views in its first week than at any point thereafter, so sellers should enter the market with staged, professional photos rather than waiting to test the market before investing in staging if they don’t receive any offers.
Before and after photos of a living room staged in Summer 2020 that had multiple offers and went under contract above asking price before the Open House.
2. Home staging expenses are tax deductible.
Home staging services that prepare a primary or secondary home for sale are considered an advertising expense by the IRS – which is great news for sellers! When sellers complete their taxes, they can subtract the cost of staging from the proceeds of a home sale, decreasing the total realized profit. One important detail – if a home is staged and then taken off the market, the staging expenses are no longer tax deductible since the advertising did not result in a home sale.
3. Home staging communicates proper scale, flow, and use of a space.
A primary goal of home staging is to paint a vivid picture of the optimal way that prospective buyers can enjoy the property. Photos and tours of a vacant home leave much for the buyer to imagine, and since most buyers are not trained designers, they won’t naturally envision how an empty space can function. Empty rooms feel much smaller than when scale-appropriate furnishings create inviting spaces and segment areas. Additionally, most people do not live in a home in the way that it should be staged, so showing the property with the homeowners’ existing furniture and décor is counterproductive. Most often, the home will appear too cluttered and personalized or, if the pieces are too large for the size of the space, they will again make rooms feel smaller than they are.
Before and after photos of a secondary living room that was staged in early Summer 2020. After multiple offers and a biddding war, this property went for $60,000 over asking price. The Homeowners couldn’t believe that they even considered not staging!
4. Staging makes the property more move-in ready.
Due to historically low interest rates, home buyers are currently experiencing a buying power surge that is fueling the “very competitive markets” in Newark, Wilmington, and more (2). This competitive market also means that many buyers are working at the top of their purchasing power, leaving little extra funds for repairs or renovations after purchase. These buyers expect to buy properties that are in move-in ready condition, which is where we come in! Our experienced staging team identifies the cost-effective and impactful updates and repairs that will create a move-in ready experience and inspire buyers to make an offer. Many sellers combine our consultation services with a professional home staging plan and are very pleased that they did.
5. The ROI of home staging is substantial.
While each selling situation varies, the homeowners and Realtors we work with are very pleased with the return on their staging investment. Home staging typically costs between 1-5% of the asking price (industry average), and this investment pays off in the form of heightened buzz, decreased time on the market, and a higher offer. In a 2018 study of 4,000 homes, 68% of staged homes sold for at least 9% more than the unstaged homes of their neighbors. Plus, homes that are staged sold 75% faster than those that were not (3). If you do some quick math based on your own property and potential listing price and staging investment, what numbers are you looking at? Can you really afford not to stage your home?
Before and after photos of a living room in a home that Wheeler Home Concepts staged, photographed, and videod in March 2020. The home was under contract by the end of April!