Does home staging really impact selling price?
A new study that says home staging does not translate into higher selling price, has sparked a controversy in the real estate business.
“People think that staging makes a difference,” says Michael Seiler co-author of the study “The Impact of Staging Conditions on Residential Real Estate Demand.” “What we found out was that from a price perspective, it doesn’t have an impact.”
But, staging does influence the buying process and a buyer’s overall opinion on a home, said Seiler, who’s also the K. Dane Brooksher Endowed Chair Professor of Real Estate & Finance at The College of William & Mary in Williamsburg, Va.
The study, scheduled to appear in the Journal of Real Estate Research later this year, was done over a period of several months with a national sample. The authors created six unique variants of a virtual home tour: good furnishings and a neutral wall color; no furnishings and a neutral wall color; poor furnishings and a neutral wall color; good furnishings and an unattractive wall color; no furnishings and an unattractive wall color; poor furnishings and an unattractive wall color.
“We find that homeowners are willing to pay the (statistically non-significant) same price for the home under all six different treatments,” Seiler says.
In a follow-up interview, homeowners significantly believed that other homeowners would be willing to pay a greater price for a well-staged home and a significantly lower price for a home with an unattractive paint color in the main living area.
“The discrepancy between stated and revealed preferences is consistent with our robustness sample of real estate agents who erroneously also believe homeowners have a differential willingness to pay, depending on staging conditions,” Seiler said in the study.
The staging business, where agents and sellers hire professionals to “stage” or decorate a home to attract buyers and fetch better prices, went gangbusters in the last decade. When the housing bubble popped, agents and sellers relied increasingly on staging professionals to help them woo otherwise reluctant and choosy buyers. So far the common belief is when all fails, staging triumphs.
“It’s ridiculous to say it doesn’t work,” says Shell Brodnax, CEO of the Real Estate Staging Association, which boasts 1,076 members nationwide and recently had its fifth annual meet in Las Vegas. “It completely works every single time.”
In a slow market, when nothing moves, staging helps sell a home faster, Brodnax says. In a hot market, staging helps fetch top dollars, she adds. According to a RESA study, 174 homes were sitting idle in the market for 156 days. When the sellers hired staging professionals, those same homes sold in 42 days.
“The consensus is that it helps,” says Walter Molony, spokesman for the National Association of Realtors.
The NAR hasn’t done any studies on staging, but Molony said that Realtors, too, believe that staging speeds up the selling process, creates a better first impression on buyers and at times even fetches a better price.
Dorcas Helfant-Browning, former NAR president and managing partner at Coldwell Banker Professional Realtors in Virginia Beach, Va., says staging has always been part of the real estate business, and she relies on it to sell homes.
“Good agents have been doing it forever,” Helfant Browning says. “ We call it preparing to move. People need help imagining what they would want their home to look like.”
Mary Abella, owner of Indianapolis-based staging and home decorating business A Little Bit of Red, said a beautiful and perfect house would always be more attractive to a buyer than one that is unkempt and unappealing.
“There was a condo here in the market that was sitting for one year and went through several price reductions,” Abella says. “Finally, the seller decided to stage it, and we sold it in 19 days. Staging absolutely helps.”
Abella adds that staged homes sell faster thereby avoiding price reductions. Staged homes often get the asking price, and some even end up in the middle of a bidding war, she .
Seiler said staging professionals have called on him “mad” about his findings.
“I never said staging wasn’t good,” he says. “Just that it doesn’t come through with a better price.”
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