Home Staging 2 - The Effect of Home Staging

      For the fear of not being able to get the return on their investment, most sellers are reluctant to spend money on staging before putting their homes on the market. Renovation can be considered as the extremity of staging. To help home sellers better understand the effects of home staging and renovation, I conducted an analysis comparing a staged home with three other non-staged comparables that are sold in Bellevue Washington in 2013.

      Table 1 shows summary of compared listings. These homes all locate within the boundary of Sammamish High School. All properties have two floors, the lower floor and main floor. I have personally visited the subject property. It is obvious that the main floor in the subject property has been beautified through staging and renovation. The renovation is mostly done in the kitchen and bathrooms. The lower floor living room and bedrooms are not remodeled but are property staged. From the looks of the pictures, none of the comparable properties are remodeled or staged. Strictly speaking, the comparable homes are not really comparables to the subject property, because the subject property have been staged and renovated. (For two homes to be comparable, they have to have similar features.) However, it is this difference that makes us easier to see the effect of home staging and renovation. Despite the staging and renovation, these homes are very similar in other ways. Hence, they can be considered comparable for the purpose of this article.

	Subject Property	Comparable 1		Comparable 2		Comparable 3
	description	description	adjustment	description	adjustment	description	adjustment
MLS #	501458	465013		500205		510758
List Price	$479,950	$409,900		$450,000		$440,000
Sold Price	$547,500	$443,500		$460,000		$465,000
List Date	6/13/2013	3/28/2013		7/24/2013		7/2/2013
Beds	5	4	+5,000	5		4	+5,000
Baths	2.5	3	-2,000	3	-2,000	2	+2,000
sqft	2560	2350		2350		2580
lot	7080sqft	8140sqft		7776sqft		7980sqft
Park type	Carport - attached	Carport - attached		Carport - attached		Garage - attached	-12,000
Year built	1959	1961		1962		1972
Adjusted Price			$446,500		$458,000		$460,000

Table 1. Summary of the subject property and comparable homes without renovation and staging

Figure 1. front yard of the subject property

Figure 2. front yard of comparable 1

Figure 3. front yard of comparable 2

Figure 4. front yard of comparable 3

Figure 5. kitchen in the subject property

Figure 6. kitchen in comparable 1

Figure 7. kitchen in comparable 2

Figure 8. kitchen in comparable 3

Figure 9. one of the bathrooms in the subject property

Figure 10. laundry room in comparable 1

Figure 11. one of the bathrooms in comparable 2

Figure 12. one of the bathrooms in comparable 3

Figure 13. one of the bedrooms in the subject property

Figure 14. living room in comparable 1

Figure 15. one of the bedrooms in comparable 2

Figure 16. one of the bedrooms in comparable 3

 

      Figure 1 through figure 16 show some pictures of the subject property and the comparables. (For easy comparison, The arrangement of the pictures is so that each property will be shown in every 4 photos.) It can be easily seen that the exterior of the subject property is very similar to that of the comparables. The exterior of comparable 3 looks slightly better with attached garage. However, price adjustment can be made to take the attached garage into consideration. Using this method, we can estimate the value of comparable 3 if it had the same features as the subject property (without innovation and staging). Similarly, we can estimate the value of comparable 2 and 3 if they had the same features as the subject property (without innovation and staging). At the end, we can consider these values as the potential sold price if the subject property was neither staged nor renovated (see Table 1). It can also be seen from the pictures that comparable 1 can been considered as the lower end property among the comparables and comparable 3 can be considered as the higher end property among the comparables.

      After the comparison and adjustments, the estimated sold price for the subject property without staging and renovation ranges from $446,500 to $460,000 (see Table 1). The subject property is sold for $547,500. Therefore, the increased value for renovation and staging is between $101,000 and $87,500, an increase of about 20%.  If the cost for renovation is kept at less than 12% of the original home value and the listing agent is providing complementary staging service, the sellers in this particular sale are getting a return of 8% of their original home value!      

      Home staging and renovation do pay off in this particular sale. The amount of return on the investment of staging and renovation may not be the same in a different market. However, buyers in a similar market may find this case study useful when trying to decide whether or not it is worth hiring a real estate agent with staging expertise or investing money on renovation.