Underwater home staging? It's all about the net.

Reblogger
Real Estate Agent with Virginia Capital Realty

The article below speaks to my basic principle in marketing your home and selling it quickly at the highest possible market price to-day!

Regardless of the fact that your home is worth 30% less than it was in 2005, it still needs repairs and staging to sell.  There is no way to pass the cost of repairs to the buyer.  

A buyer finances the house "all in" much like a car.  You can't ask them to finance the home "as is" and then come in and pay cash for repairs after they close.  They just don't have to.  

They don't have to paint the red walls a neutral color. They don't have to pull up and replace the worn dark green carpet.  Even if you deduct it from the list price, dollar for dollar, the buyer is unwilling and unable to afford this cost after closing.  They have already maxed out their financing and cash downpayment.

Therefore, the seller has to put in the investment and effort to make their house attractive to a buyer that will have "empty pockets" after buying the home.  It really comes down to that.  

If unwilling to spend the money to attract buyers, then simply keep your home

if you can....

Original content by Melissa Marro
I hear all the time that sellers and Realtors believe that home staging just isn't worth the investment in properties that are "underwater". Short sales, or listings where the seller has to bring money to the closing table often discount the idea of home staging completely. Agents are afraid to tell the seller that 'more money' needs to be spent and sellers feel frustrated and angry at the thought. 
 
Today I'm going to share two videos with you showing the point of view from the Stager (me) and from a home seller. I was not the stager or the agent for the seller in this case, Angela Batchelor from Wilmington, NC was. I think when you see the two points of view, it may make you think differently. 
 
Next, I'm going to share some numbers to back it all up. What I love about math is that it is pretty black and white. Sure, statistics change and then the math adjusts accordingly, but all in all, our market and numbers haven't changed that much. While homes are selling much more quickly today than they may have been in 2010, what is true is that if they are not properly priced and presented, the days on market (DOM) is not much better. Buyers complain about inventory levels, but they are out there... they just aren't what the buyer is looking for today. 
 
 
Now for the seller's opinion... 
 
 
Now, let's look at some cold hard numbers.
 
  • The National Association of Realtors (NAR) said that in 2010 the average home sales price in the US was $173,100.
  • Zillow said that the average home took 1% in price reductions per month
  • Trulia said that the average price reduction during the listing period was 9% for homes under $2M, homes over $2M it was 14%
  • The Real Estate Staging Association (RESA) said that the average DOM reduction was 78% for staged VS non-staged homes.
Now for the alignment of each statistic across all platforms.... 
 
RESA staging statistics
 
The above study shows that 126 homes were listed on the market for approximately 9 months prior to staging
 
78% of 9 months = 7.02 months saved…. 
 
(Zillow & Trulia stats merge here)
 
$173,100 x .0075 = $1300 average mortgage cost
$200 estimated Carrying Costs
Monthly costs ($1500) x additional DOM (7 months) = $10,500
Avg price reduction (1% x 7 mos) = $12,117
Total savings?  $22,617

When all is said and done, the net savings in this example is likely to be around $20,000 (after we subtract the cost of staging). Home staging is not an expense. It is an investment. This is all about the NET PROCEEDS. How much less does a seller have to bring to the closing table? How many fewer months will they stress over the additional monthly mortgage costs? Will they be able to short sell instead of losing their home to foreclosure? 
 
Eventually, with or without staging, the money will be spent. Will it be spent in additional mortgage costs, price reductions, money brought to the closing table, or will you rip the band-aid off, stage it and actually sell it now? 
 
 
Thank you for reading... Underwater home staging? It's all about the net.

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Melissa Marro, grew up in St Petersburg, FL, and has spent her entire adult life moving. As the wife to a disabled Navy Submariner, Marro understands the stress of buying, selling and moving. In the 15 years of military service her family served, they moved 12 times, buying, selling, and investing in homes along the way. Finding a passion in real estate, Marro created one of the strongest home staging companies in the nation, before selling it and moving back to Florida. Settling down in the oldest city in the US, Marro now calls St Augustine home. 

In June 2012 Marro opened a new home staging company, Rave ReViews Home Staging and started selling real estate in the Sunshine State. While new to the area, Marro is not new to the business. Working in real estate since 2005, she understands the complexity of the market. In 2011, her Charleston based home staging company helped stage and sell more than $20 Million in residential real estate

For more information on buying or selling in the St Augustine, St Johns, Jacksonville, or Ponte Vedra area, visit StageListSellNEFL.com or call Melissa Marro, Watson Realty, for more information (904-466-2093).

Professional Designations & Awards:

vacant property specialist Design Specialist 2009 RESA Pro Stager of the Year2012 product of the year

Creator of:

Online home staging consultations SAR home staging traininghome staging jacksonville st augustine

Member of:

National association of Realtors       Sales and marketing council         Northeast Florida Builders Association

Comments (4)

MichelleCherie Carr Crowe Just Call...408-252-8900
Get Results Team...Just Call (408) 252-8900! . DRE #00901962 . Licensed to Sell since 1985 . Altas Realty - San Jose, CA
Family Helping Families Buy & Sell Homes 40+ Years

Great points about underwater home staging, and thanks for sharing the statistics.

Sep 11, 2012 11:40 AM
Melissa Marro
Keller Williams First Coast Realty - The Marro Team - Orange Park, FL
Jacksonville Real Estate and Home Staging

Athina - Thank you for reblogging and the great introduction piece... well said!

Sep 11, 2012 11:43 AM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Have a great day and an outstanding week with your camera in hand.

 

Sep 16, 2012 02:56 AM
Athina Boukas
Virginia Capital Realty - Richmond, VA
Certified Residential Specialist (CRS)

Thank you for your post Roy.  Have a great week.

Sep 16, 2012 03:05 AM