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Property Styling and Home Staging News
Home Staging or Discounting - Whats the best approach for selling your home sooner?
In recent, tougher property markets weve seen house prices soften over the last year or so. In some markets, prices have dropped by 5%, in others 10% - in some, even a little more.
Home sellers are regularly advised in the press, by real estate agents and real estate bodies to ensure the price they expect to sell for is realistic. To ensure their expectations are in line with market values for the area, the land size and the features and style of the home, etc.
Fundamentally, vendors are asked to review their pricing by 5%-10%. That means that on an $800,000 property, you need to discount your home by $40,000 to $80,000 from what it was in late 2010.
Ouch! Reality can sometimes hurt.
As any experienced sales person will tell you, the easiest/fastest way to sell something is to lower the price.
But what if there was another way?
What if, rather than lower the price of your product (your property), you adopted a strategy of raising its value to what it originally was before the market turned? Would that be more profitable for you as a property seller?
Typically, well informed home staging (ie more than just hiring some furniture) sees a $3,000 return for every $1,000 spent on property staging. So lets look at the numbers of how that could work.
Imagine your $800,000 property has lowered in value by 7.5% and is now valued at $740,000.
Option one lower your home selling price (discounting strategy)
That is, in order to sell at fair market value, you could simply lower your price by $60,000 to $740,000 easy.
Option two expertly home stage the property to increase value (add value strategy)
Now lets take that same property, valued at $740,000, and home stage it with some expertise. Lets spend $20,000 painting it in modern, appealing colours, landscaping the front yard, updating some fittings and staging it with modern furniture.
Based on our three for one ratio (which we achieve in most markets), the $20,000 spend adds $60,000 of value, taking the propertys valuation back to $800,000.
The final outcome is that by enhancing/staging the property you obtain a far better return. In fact, youd have $40,000 more in your pocket in comparison to discounting your price.
To provide a real life example, we recently met a client who was struggling to sell their home for $1.1M and was being asked to lower their selling price.
They then engaged our services to strategically enhance the propertys home staging and spent just over $20,000 painting, gardening, furnishing and updating the kitchen.
They then went on to sell the property a few weeks later for $1.22M. That is, they were at least $100,000 better off by expertly staging the property to market (rather than discounting their price).
This isnt an isolated incident. Its about being creative and informed when selling your property and being able to identify the home staging enhancements that will deliver that three for one return.
If youd like to find out about home staging and selling your home for more, contact me or call 1300 768 464.
Richard Armstrong is a Director of Melbourne firm The Makeover Group. He possesses over a decade of property and home staging experience and post graduate property qualifications, researching what enhancements give the best returns in the Melbourne property market. He is the author of the books Sell Your Home For More in Any Economy and RentBuilder An Experts Guide to Cashflow Positive Makeovers. A registered building practitioner, he contributes to Australias leading property publications and websites and has helped thousands of clients add millions of dollars (collectively) to their property returns.