The Growing Pains of the Home Staging Industry

By: Chaz Wilke - Staff Writer
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Preparing a home for sale likely includes deep-cleaning your property and hiding the clutter. A home staging service takes that idea to the next level. Professionals come to your home and outline a list of changes that could include rearranging furniture, maybe hiding a few personal items and potentially giving your walls a fresh coat of paint, among other suggestions. There is a growing home staging industry that hopes to sell this service to prospective home sellers.

Michelle Krueger of NWI Times says, “The key is if the market slows, a staged house will sell quicker for more money, and if the market remains hot, it will sell for even more money.”

For those looking to maximize the selling price of their home, hiring a home staging professional seems like a no brainer. Or is it?

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What are the Benefits?

Side-by-side comparisons of homes on the market may provide the most tangible evidence of the effects of good home staging.

Recently, the real-estate blog Curbed presented before-and-after examples of home staging’s impact on a one-bedroom condo in Seattle. This home was listed in May 2013 and languished on the market. Now, the condo is relisted with fresh home staging proving the effects that a professional home stager can have on a property.

The changes appear to have affected the perceived square footage and overall flow of the condo. Home staging professionals suggest these changes will benefit a home on the market by potentially receiving more bids, a faster sale and maybe even a higher purchase price.

The promise of selling your home quicker and for more money is a compelling incentive to hire a home stager. But to some, it might just sound like a fast-talking salesman’s tactic to peddle a new service.

Since home staging is about influencing prospective buyer’s perception of a home, skeptics may be searching for hard statistical data to back up some bold claims made by those in the home staging industry. For the most part, that search will likely come up empty.

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The Fog of Perception

We’ve found that many home staging businesses play fast and loose with data in an attempt to provide a specific monetary value for home staging as a service.

Many home staging businesses online include a statistic from the U.S. Department of Housing and Urban Development that states “a staged home will sell on average 17% higher than homes that have not been staged.” There are many home staging business sites prominently citing this statistic.

But, this statistic is not available on any Internet-published HUD document. Each site that references the 17% increase in sale price does not include a link to an official government source. We’ve requested factual verification from HUD and will update this article if we learn anything new.

Others have voiced concern over the widespread use of this unsubstantiated HUD statistic. Al Leong deflates the validity of this oft-repeated statistic by saying “… the real estate appraisers and real estate agents do in general, disagree with a high 17% figure.”

Leong also tracks the original source of this HUD statistic to an about.com post that was “removed after an investigation by about.com with the US Housing and Urban Development (HUD),” Leong said.

This also isn’t the only unsubstantiated statistic home staging professionals provide. Ohio-based Turn Key Home Staging & More cites the 17% HUD claim, then follows that up with an assertion that “according to statistics, home staging has a 169% return on investment.” The actual statistic that this increased ROI references is not provided.

The 169%-return-on-investment figure is also widely repeated. Various sites attribute it to a 2005 study, then a 2003 HomeGain study. Another site suggests the ROI has risen to 349% in 2008 while giving no source for that data. We checked with HomeGain, a licensed real estate brokerage, to verify this data. We found that the return-on-investment information provided in HomeGain’s study includes this disclaimer:

“This report represents a consensus of the polled agents’ opinions and is for general information and illustration purposes only. Actual costs and benefits may vary due to geography, market conditions and home characteristics. This report is not intended to replace the advice of a real estate agent, and should not be considered professional, legal, or tax advice.”

Essentially, HomeGain is saying that this information is derived from opinion, not fact.

But, not all home staging professionals are content with promoting baseless numbers.

Judy Heinrich of Judy Heinrich Home Staging decries the widespread misrepresentation of data that is used to sell home staging services. “Citing any statistics that we cannot back up with a link to the actual study or report only discredits our reputation. We should all confirm any statistic we choose to cite with a link to the actual study or report,” she said.

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True Home Staging Effectiveness

A recent study performed by Mark Lane of Old Dominion University, Michael Seiler of the College of William & Mary, and Vicky Seiler of Johns Hopkins University conclude that “while staging efforts do appear to impact potential buyers, the effect does not carry through all the way to the bottom line.”

As part of the study, more than 800 participants were asked to estimate the value of homes presented in side-by-side pictures. The Dispatch includes a few of these comparison photos. The study concluded that participants did favor the staged homes, but the estimated values of the favored homes didn’t increase.

“People can look past the colors of the walls, and they can look past the furniture,” Seiler said. “If you Google home staging, you’ll find all these unsubstantiated claims, like staging will add 8 percent to your home’s value.”

“Those numbers are pretty much made up,” Seiler says.

Takeaway

Home staging is not an exact science. The perceptible value provided by a home staging expert is entirely personal. The statistical figures floating around the Internet should be taken with a grain of salt when deciding on the need for home staging services.

This is not to say that home staging isn’t useful. Consider the Curbed write-up about the one-bedroom in Seattle. It’s clear that home staging helped make the space look more desirable. But, this is the problem with an industry attempting to monetize buyer perception — it’s purely subjective.

Most would agree that staging your home can have a positive effect on potential buyers. But there is no statistical data that can give any hard evidence of a dollar amount associated with that effect.

Becky Fields of Home Staging and ReDesign in Tracy, California sums it up by saying, “Ultimately the goal is to sell the house and if staging helps get it sold, then it’s a valuable tool.”

Chaz Wilke is an employee of Deka Marketing Group. Deka Marketing Group receives payment from advertisers on HomeLiving101.