Furthermore, a quarter of buyer’s agents said that staging increases offers on properties by 1%-5% compared to other similar homes that are not staged.
Home staging aims to highlight a property’s features and reduce the emphasis on the negatives. Home stagers can also cleverly transform unique and unusual spaces, so prospects can see how they might use the home if they decide to buy it. For example, an odd-shaped or small room might be transformed into an office, second living area or kid’s playroom. Home staging helps prospective buyers visualize where they might put their own furniture when they move in and can make the property appear more “liveable”.
There’s no doubt that staging can be an effective way to help sell a property, but it also adds costs and additional risks that brokers and agents need to consider.
Here’s how your agents can use home staging to boost sales, but also manage the risks…
Get a Quote for Staging Before You Agree on Your Commission Rate With the Seller
Often home staging is “sold” as an add-on service — an option that the sellers can choose to help show their property in the best possible light and to boost their chance of selling.
Normally, the real estate agent would deal directly with the professional staging company, and their fees would be covered within the commission price charged by the agent. Therefore, it’s essential that agents obtain a quote from the stagers before they agree on a commission rate with the seller.
Keep in mind your home stagers will need to see the property to provide a good estimate. It’s almost impossible for them to give you a quote without seeing the space. Failure to show them the space can result in situations where the home staging estimates quoted to the seller end up being much less than the actualcosts. This is not a good situation to be in as a real estate agent, as ultimately, this overspend cuts into your commissions.
The entire house does not need to be staged. It’s cost-effective to focus on those areas where people are most likely to spend their time. According to the NAR 2019 Profile of Home Staging, the living room, master bedroom and kitchen are the three most important areas for buyers. So, it makes sense that the most common rooms to be staged are the living room (93%), kitchen (84%), master bedroom (78%) and the dining room (72%). The least common room to be staged is the guest bedroom (28%).
The number of rooms to be staged will largely depend on the individual house and the seller’s budget. Agents should make recommendations based on what offers the best return on investment and value for the money for their client.
Be Clear With the Property Owner About the Staging Process and All It Entails
It’s imperative that the homeowners are aware of, and on board with, all that the staging process involves. Agents need to be clear with the property owners about the costs of staging, what each step entails, and what they need to clear out to make staging possible. Decluttering the home is the most common recommendation to sellers from real estate agents, according to NAR’s research.
Staging offers the ability to depersonalize a property and make it attractive to a wide range of prospective buyers. So stagers may recommend removing things like personal photographs and replacing them with artwork. They may also suggest removing heavy, bulky furniture and replacing it with more modern streamlined furniture pieces.
Sometimes, sellers can be hesitant to make such huge changes to their space — after all, it is their home. But, homeowners need to be prepared that their home is going to look very different. Real estate professionals can help to sell the benefits because home staging offers a great return on investment if done well.
Costs for staging vary anywhere from $400 up to $6,000 plus. But again, agents should be looking for a good return on investment when making recommendations to homeowners.
Staging may not be the answer for all homes. NAR research found that only 28% of seller’s agents said they staged all seller’s homes. 13% said they only stage homes that are difficult to sell.
Do a Risk Assessment and Be Prepared
Real estate agents should do a risk assessment on home staging and aim to minimize any risks. For example:
Consider any items that could be damaged
Consider any items that could cause damage to the property
Avoid high risk, expensive items such as sculptures or expensive artwork
Avoid small items that could be easily stolen during open houses or inspections
Consider only showing the property to qualified buyers or choosing private inspections over open houses (which is becoming increasingly more common anyway during the pandemic).
Real estate agents also need to be very clear in contracts and agreements about who is responsible if damage occurs to property during the staging process. Or, what if the home stagers move some of the seller’s belongings and they’re damaged? You should be working with a reputable home staging company that has appropriate insurance coverage for these scenarios.
Ensure You Have Adequate Insurance Coverage
Ensure your brokerage and all of your real estate agents have adequate insurance coverage in case of a lawsuit. Contact CRES at 800-880-2747 for a confidential discussion about your brokerage insurance needs today. CRES specializes in real estate Errors and Omissions insurance for real estate companies and agents. And our team of expert legal professionals are available to provide you and your agents with legal advice 7 days a week.
This blog/website is made available by CRES Insurance Services for educational purposes to give you general information and understanding of legal risks and insurance options, not to provide specific legal advice. This blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state. Claims examples are for illustrative purposes only. Read your policy for a complete description of what is covered and excluded.
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