I was asked to give a presentation at the Womens Council of Realtors North Metro Denver Chapter about home staging in January 2015. So, I might as well take this time to share a bit about what I’m going to talk about, before being handed the microphone.
Unfortunately, when I look at the statistics there is no easy way to sugar coat the facts, so I apologize now if this is hard hitting, but it is what it is and I do you a dis-service if I don’t give it to you plain and simple.
Being a bit of a statistic nut to make a case to the unbelieving to the home staging process, I thought it a good idea to to base my findings on statistics from National Home Builders Assn., National Assn. of Realtors and Remodeling Modeling Magazine Cost vs. Value Report, all of which spend lots and lots of money gathering data to determine what is going to provide a good return on investment.
It’s likely that this post will be in a few parts as there is quite a bit to cover, but I promise I’ll sum things up the best that I can in follow up posts. I’m going to talk about your homebuyer target market before getting to How To Give Home Buyers What They Really Want. You can’t market a home for sale unless you know who you are selling to.
First and foremost home staging is used to appeal to the emotions of homebuyers. No matter how much furniture, artwork, greenery, lighting and accessories are used to prepare a home for sale, there are things that homebuyers are looking for and all the staging in the world will not make up for updates and repairs not done. Not following thru with updates and repairs will only help to sell the competition.
Home sellers armed with the knowledge of knowing who their target market is and how it will help give a marketing edge over the competition, will be the winner when it comes time to sell. Should you not take these considerations into account, your home will sit longer on the market, potentially receive price reductions, ultimately selling for less moola.
Across the nation it’s a sellers market, here in the Denver Metro area average days on market was 41 days (December 2014) so you are probably thinking “I don’t need to stage my home”, but I’ll cover some interesting stats that will change your mind. You can’t sell if you don’t know who you are selling to and what you are up against.
Let’s look at some statistics:
- 33% of todays first time home buyers are 31 years of age and make an average income of $68,300. Repeat home buyers average age is 53 years old and earns approximately $95,000. 65% of these folks are married.
- What that means is you are going to have to stage your home to appeal to a broad target market. You can bet your bottom dollar that our younger homebuyers don’t want a dated, dingy home. The older buyers have made some money and are looking for something chic and stylish that reflects a certain lifestyle. Mauve, sage green, swags, wallpaper, just to name a few – gotta go. Remember, we are marketing for a higher return on investment when it comes time to sell our homes. Well, that’s my goal for you when consulting
2. New home purchasers bought a new home to avoid renovations or problems with plumbing or electrical, and the ability to customize their home. Hint, hint.
- Hopefully you are making the needed repairs to your home, or if a Real Estate professional making the recommendations to your homesellers. Homebuyers want things looking like NEW. Otherwise, statistics say they want a better price and overall value, so be prepared for price reductions if you don’t give what the market demands.
- 92 percent of home buyers use the internet in their home search.
- You need to prepare and stage a home properly to appeal to buyers. I tell my clients when providing home staging consultations that the photos are the bait used to lure prospective buyers to visit your home. Make sure the visual distractions are kept to a minimum.
- Typical home buyers searched for 10 weeks and viewed 10 homes
- Homebuyers are discriminating. You have to capture their attention and may the best home win.
- 53% of homebuyers purchased a newer home.
- Let’s take a look at what that means: contemporary, the latest, modern, up-to-date, sophisticated, current, keeps with the pace. I hope this clarifies any questions you may have on what newer means, if not don’t worry that’s what you have a home stager with buyer eyes.
- 48% reported credit card debt, that’s certainly a challenge to overcome.
- 47% purchased a more expensive home.
- 46% of homebuyers reported they have made some sacrifices such as reducing spending to purchase their home.
- Don’t for a minute think that not painting or updating is an option, homebuyers don’t have the extra money to do it. They will spend more money on a move in ready house and sacrificed to do so.
- 44% reported student loan debt (SMH/shaking my head)
- 36% reported car loans delayed them from saving for a down payment.
- 12% shared that saving for a down payment was the most difficult task in the home buying process.
Now that I have given you a snapshot of what your typical homebuyer looks like, hopefully you will have a better understanding of your target market when selling a home.
At the very least I hope that you can provide some empathy on why homebuyers shouldn’t expect to purchase what is as close to their dream home as possible.
They have overcome the obstacles of going to school, buying cars to get to work, sacrificed, paid off debt and have had to wait, to get to the point of being able to purchase a home, the American Dream. Your goal is to get your home for sale as close to new as you and your budget allow.
Updates, repairs and home staging will help you compete with NEW and updated homes in the same price range. Otherwise, be prepared for a below market value sales price, longer sale or price reductions.
Oh an before I forget, if you think that it’s a sellers market when the recent sellers who sold their homes were getting 97 percent of the listing price, and 45 percent of them reporting they reduced the initial asking price at least once, is good think again because you are leaving money on the table.
Staged and updated homes are being sold faster and for $10,000 and upwards more than ask price, with contingencies stating buyers would come out of pocket and not dependent on appraisal. These same homes sell in days not the normal 41 that we are seeing. So, these buyers mean business and have worked hard to get what they want and they will pay for what they want.
Tomorrow I’ll wrap up with talking about typical home sellers, which will be a real eye opener to your return on investment.