The two key components of a home sale

Posted by Michael DiMella on Tue, Jul 15, 2008

There are two major differences between homes that sell in this market and homes that don't: correct pricing and proper staging.

Neither is more important than the other, and both play key roles.  They are dance partners who must be in sync for a sale to take place (not that I know much about dancing!).  I'll give you a classic example that recently took place.  In early spring, my business partner and I met with clients who had their condo in the Back Bay on the market for nearly 4 months with no success when they called us for help.  The asking price had started at $695,000 and had been lowered a few times over the 4 month listing period, eventually to $649,000.  Their condo should have been able to sell at that price, so they thought.  Still no buyers emerged. 

We went in to meet with the owners, Alma Dell and Lyle, and actually agreed with them.  Their property should sell at that price and we even suggested it could even sell for more.  But the current problems were two-fold.  The price was too high from the beginning, eating up market time and not creating an atmosphere in which buyers felt they needed to act quickly.  The other issue was how it showed.  Since the property was mainly used as a home office, it was configured that way.  The bedrooms were used for desks and books and chairs, the living room was functional but sparse, etc.  Buyers did not see it as a home.

We recommended staging and re-pricing.  Alma Dell and Lyle agreed with our suggestions and acted on them.  It cost them a couple of weeks and about $3000 for staging and some minor cosmetic work to properly present the condo to the market.

In the end, we took a condo that had been on the market for $649,000, staged it to look more like a home that buyers would want to live in, and put it back on the market for $669,000.  We had a buyer within 5 days for $660,000.  $11,000 more than the previous asking price.  The right combination of staging and price.

 

Staging is like the packaging on products in a retail store.  Compare the products you buy to all the others on the shelf for sale.  Do they have the nicest box?  Do you notice it when you walk down the aisle?  Or is it the price that gets you to buy?  It must be some combination of the two that triggers your buying impulse.  Buyers (no matter the product, or home) usually buy on emotion.  That is the reason marketing and packaging works.  Simply put - the shiniest box stands out.  Your home must be the shiniest box.

Obviously, there is some element of branding and commercials you have seen previously that affects your decision.  But, with homes  just coming on the market for sale, there is no branding - no prior knowledge.  Nobody knows that your home tastes great or is less filling, for example.  Therefore, you only have "the box".  Especially now, when more and more buyers are starting their search online, and only choose to see properties that standout to them, the photos posted MUST show the home in its best light.  And for the photos to be great, the home must be staged well. 

For more about pricing a home right, and the pitfalls of over-pricing check out:  The price must be right by Kimberly Blanton (Boston Globe)

Tags: staging, marketing, pricing