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Are Realtors Expected to Pay for Staging in this Market??

I am not sure if this is happening in your area but in the past month I have been on several consultations where the SELLERS EXPECTED THE REALTORS TO PAY FOR THE STAGING OF THEIR HOME!! Is this happening to you, and if so what should you do??

Let me first say that I truly belive that realtors should be pay for the consultation of the home stager. I think that it is important to team up with a professional Home Stager and have us as part of your marketing team. We can review your clients property and be the "bad guys" as we tell them that the dated wallpaper and doggie beds need to be removed PRIOR to listing the property.

When you team up with a Professional Home Stager in your area ask if there is a Preferred Agent Discount if the Realtor pays for the consult. All my agents get a 20% discount off the original cost of the consult. This adds value to your listing presentation and the sellers SHOULD NOT have to pay for this fee. This now becomes part of your marketing plan....BUT what happens after the report and Proposal have been submitted??

Over the past month I have heard that the sellers are asking that the realtor pay for the cost of staging. Remember this could involve removal of wallpaper, painting, adding new light fixtures and oftentimes the cost for rental furniture. WHY WOULD A SELLER EXPECT THAT FROM THE REALTOR?? These are improvements that are necessary and must be made when preparing your home for sale in ANY MARKET!

What if a realtor pays for this service and you DECIDE TO NO LONGER SELL?? Remember, when selling your home it is absolutely necessary that you prepare it for SALE. WHEN YOU DECIDE TO SELL YOUR CAR, WHO PAYS FOR THE DETAILING?? Sellers, this is your responsibility.

What I have seen over the past month or more has been very upsetting as I watched sellers DISMISS HIGHLY QUALIFIED, PROFESSIONAL REALTORS as their agent because they did not pay for the staging. I have also worked with some agents who have agreed to pay BUT because they are also limited they are giving Stagers VERY LIMITED budgets with which to stage.

Yes, a Professional Home Stager will pull out all the stops to ENHANCE a home...but if the budget only allows for partial furnishings and enhancements and DOES NOT COVER the cost to remove moldy wallpaper and stained carpets, what have we accomplished here.

As the market grows tougher it is important to remember these facts:

1. ENHANCE YOUR HOME when preparing it to sell. That means review each room with a keen eye and make all necessary repairs from the outside broken doorbell and light fixture to the dog stained carpet in the living rom.

2. CHOOSE AN EXPERIENCED REALTOR. Don't go with a discount broker, in the end the money you think you were going to save could have cost you thousands. A TOP AGENT that I work with just lost a listing because she chose NOT to pay for the staging. The seller went with a realtor that said she would pay for the staging. When we checked out this realtor, we were surprised to find out that in the past year, they had only SOLD ONE HOME!

3. PRICE THE HOUSE ACCORDINGLY...Listen to your realtor when they tell you the value of your home, they have based this price on the CURRENT pricing for your area.

4. STAGE YOUR HOME and pay for the necessary enhancements. We staged a home yesterday where our hands were literally tied. The seller refused to pay for the staging....the cost was very reasonable $1,500.00 which included removing VERY OLD, dated wallpaper that was stained and peeling in his kitchen and bathroom. The bathroom was BEAUTIFUL BUT for some ODD reason they had the ceiling and crown molding painted PINK. They refused to address these items and the realtor had to do something so she asked us what can we do on a $500.00 budget??

We did our best to HELP THIS AGENT out and it did look BETTER! Here was the sellers response. He did NOT want to pay for the removal of the wallpaper and the painting, but he would be willing to accept $400K for his house....DOWN FROM THE ORIGINAL ASKING PRICE OF $449K.

$1,500 for PROPER STAGING OF YOUR HOME.....NOT! $49K PRICE REDUCTION..YES! What's wrong with this picture? Is this a growing trend?

If you are considering placing your home on the real estate market, TEAM UP with a Professional, experienced agent who works with a Professional experienced Home Stager...

The team of ReStyled to Sell can help in ALL ASPECTS of your sale...Call today @ 732-995-3425

Posted by Phyllis Pafumi-ReStyled to Sell Staging Homes NJ on 10/12/2008 08:36 AM

Comments (11)

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Originally posted at: Phyllis's Blog: Are Realtors Expected to Pay for Staging in this Market??

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11 Comments on Are Realtors Expected to Pay for Staging in this Market??

OCT

2008

Phyllis, I don't pay for my sellers homes to be staged. I don't do it for the reasons you listed in this post. I recommend stagging and most of them comply. But, a few haven't. I think it is all in how the listing agent presents the value of it. Unfortuantely many Realtors just don't see the value and you can tell when you show their homes.

HI Phyllis. This is a great post. The homeowners should be invested and value the staging-the staging should not be tied to the Realtor.

Phyllis: I believe the home owner should pay for home staging. Why?

When the home sells, the home owner gets 94% of the profit. At the very least they should then pay at least 94% of the cost of staging the home, a service which helps their home sell faster and for a better price.

The listing agent has to split 6% among themself, their broker, the listing agent and the listing agent's broker, usually netting the listing agent around 1.5% (assuming the commission is 6%).

I have worked with a few agents who agreed to pay for staging in order to get a listing. In that case, I recommend the listing agent have the home owner pay for the staging up front and have the listing agent reimburse them once escrow closes. Having hard cash on the table (in the form of staging fees) motivates the seller to consider all offers, set a realistic selling price, and particpate more enthusiastically in the sale of their home (making it available for showings, keeping it clean, etc.)

OCT

2008

Great post, I have not had a client enlist the help to stage their home, but this information would benefit me in how to handle it should it be necessary to enlist the services of a staging company or individual. Aloha, Daniel

A real estate agent should encourage staging. They shouldn't be responsible for the cost incurred anymore than they would for the landscaping of the property or bearing the expense of edging the lawn.

OCT

2008

I wish home staging was more popular in my area - some homes that I show really need it! I myself sepnt two of the three hours at my open house today cleaning so that the potential buyers could see that the house had potential - a have a few clients who are single older gentelmen who just don't have the know how to clean propely (nor the time)!

OCT

2008

This is touched on in Beth Baker's blog http://activerain.com/blogsview/760466/Home-Stagers-and-Realtors-Price-Drop-or-Pay-for-Home-Staging

One of the key things said there was the realtor saying that dropping the price is paper money vs out of pocket money. Whether we like that or not, that's how they see it. The price drop is just paper money and money they don't have yet. The out of pocket money may not come back to them no matter what the house sells for. People go for the way that is less painful. It's less painful to give up something you never had, than to go into debt or put on credit something you aren't sure will work. THIS IS NOT ME TALKING, IT IS HOW SELLER'S THINK. So, illogically, they often make that choice. Can you the stager change their way of thinking? Can the Realtor? Sometimes, but you need to speak to them to do so. Hoping the Realtors let you do a presentation for their clients.

NOV

2008

NO, the agents should not pay for the staging on all listings.

Certain circumstances the agent might pay.

As a realtor (now retired) I've paid for the stager only to have the seller decide that the house not selling was my problem. It had nothing to do with the market.

The buyers pay for their inspections. The sellers should pay for their staging.

The agent suggests that we give them a consult

Hi Phyllis, I work with Realtors that will pay for the Staging and are reimbursed on closing. It seems to work in our market. Properties are still moving in our area. It is still a risk to the Realtor as someone pointed out. What if the property does not sell? I recently had a property that had an overwhelming odour of smoke and wet dog even after cleaning, carpet cleaning and an ozone machine being placed in the home all day.

I really felt the Realtor was going out on a limb for this particular client. The property sold in 15 days near list. Another case of a professional Stager marketing the features and focal points of a property to balance the see saw of potential problems that could stall the sale of a property or increase the DOM.The Staging created a warm and welcoming ambience to a property that was previously on the market for 7 months with no offers, not even low ball offers.

My realtor partner and I have just come up with an idea to propose an increased commission charged to the seller to be paid at settlement and part of our increased service is to stage every home (we do offer more services and marketing than most realtors at this point in our area). We won't use it on every listing...but we will be using it on most listings. The staging services will vary from house to house as will the out-of-pocket as I hire people to: clean, stage and accesorize. This will not include cosmetic work which will continue as usual on a proposed basis to the homeowner. We will have the listing prepared and signed prior to the staging with the agreed upon pricing for obvious reasons:

1. We will insure that we will actually take the listing with the desired length of contract;

2. We will insure that we have the desired commission;

3. We will insure the price of the home up front so we are comfortable with market value and salability. How often do we get done with painting, carpeting, staging, etc. and the homeowner starts to increase the value of his home more than the agreed upon amount!

Each home will reap it's own different profit margin. Some will be greater than others depending on the level of need for each home. All will be more salable as we have them better prepared.

I'd be curious to hear comments on this. Has anyone done it? Has it worked?

I have recently taken out the staging in two properties due to the homeowners unwillingness to continue paying the monhtly fee .. There was never even a question that the REA's would pay to keep the staging in place. Seems to me that we all lost.. Both of these homes are in price range ( $550.000 and $800,000) that is very tough right now, and having them vacant is going to make them even less appealing.

I am really liking this idea of Sheri's to increase the comm a bit to cover the staging cost,, BUT we all know the murky waters that we might find oursleves diving into.. A Realtor that I have worked closely with for over two years is letting some of her listings go when the contract comes up for renewal due to the homeowners being either unwilling or unable financially to even fix a leak in the roof.. Here again, the REA could step up and offer to do that.. but where to say "enough" in this market ??

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