Who Should Pay for Home Staging Services: Sellers or Agents?

Who Should Pay for Home Staging Services: Sellers or Agents?

When it comes to selling a home, first impressions are everything. In a competitive real estate market, it’s not enough to simply clean and declutter your property; to stand out, homes need to be presented in the best possible light. That’s where home staging comes in—a process that can help buyers envision themselves in a space by showcasing its potential and emphasizing its best features.

But when it comes to covering the costs of home staging, the question arises: should the seller or the agent foot the bill?

What is Home Staging?

Home staging involves strategically arranging furniture, decor, and other elements in a home to create an inviting atmosphere and highlight the property’s strengths. The goal is to appeal to the broadest possible audience, making it easier for prospective buyers to see themselves living there.

Staging can be as simple as reorganizing furniture and adding fresh paint, or as involved as completely redesigning a space with rental furniture and accessories.

Regardless of the level of staging, it typically involves an upfront investment, which raises the question of who is responsible for paying for the service.

The Case for Sellers Paying for Home Staging

1. It’s an Investment in Maximizing Sale Price

For many sellers, the primary goal is to secure the highest possible sale price. Home staging can significantly increase a property’s perceived value by making it more appealing to buyers. Staged homes tend to sell faster and at higher prices than non-staged homes. According to the National Association of Realtors (NAR), 25% of agents say that home staging increases a property’s value by 1-5%. Given this potential return on investment, it makes sense for the seller to cover the cost of staging as part of their strategy to get the best price for their home.

2.  Sellers Are Usually the Ones Who Benefit from a Quick Sale

In a slower market, staging can help speed up the sale of a home. By investing in staging, a seller can ensure that their property stands out from the competition. Since the seller benefits from a quicker sale (often leading to fewer days on market and lower holding costs), they may be more likely to cover staging fees.

The Case for Agents Paying for Home Staging

1. Agents Have a Financial Stake in the Sale

Real estate agents often work on commission, typically earning a percentage of the final sale price. Given that home staging can help increase the sale price and reduce the time a property sits on the market, agents have a vested interest in ensuring the home is presented in the best light. By covering staging costs, agents can demonstrate their commitment to getting the property sold quickly and for top dollar—ultimately benefitting from a higher commission.

2. Staging Enhances the Agent’s Marketing Efforts

Real estate agents are responsible for marketing the property, which often involves professional photos, listings on real estate websites and showings. Staged homes photograph better and attract more attention online, which can result in more showings and, potentially, higher offers. For agents looking to build a strong reputation, investing in home staging can be seen as a value-added service that sets them apart from other agents.

3. Agents May Cover Staging Fees as Part of a Competitive Offer

In some cases, especially in highly competitive markets, agents may offer to pay for staging as part of their service to attract clients. This is often seen as a strategic move to gain business and increase the chances of a successful sale. It can be particularly appealing to sellers who may be hesitant about spending extra money on staging during an already expensive process.

Shared Responsibility: A Compromise Solution

In some cases, both sellers and agents may split the cost of staging. This can be a good compromise, as both parties benefit from the improved sale price and faster transaction. In a market where homes are taking longer to sell, agents may be more inclined to contribute to staging costs as a way to make sure the home stands out.

For sellers, sharing the cost can make staging more affordable, while agents get the benefit of a faster sale and higher commission. Some agents even negotiate to include the staging cost as part of their overall commission, which can help smooth over any concerns sellers may have about the additional cost.

There’s many ways agents can include the cost of staging as part of their marketing package. They can cover the consult of a consult, cover the cost of all or part of staging or cover the cost up front and ask to get paid back at closing.

There are also a variety of third party companies who work with professional home stagers who cover the cost of staging up front and are paid back at closing, including Notable and Titus.

Who Pays for Staging Depends on Market Conditions

The decision of who pays for home staging is often influenced by market conditions. In a hot seller’s market with high demand, sellers and agents may feel more comfortable investing in staging, as they’re confident the property will sell quickly and for top dollar, so they’re sure to see a healthy ROI.

In a slower market, however, staging becomes even more important. Properties in less competitive markets require more effort to stand out, and staging gives a home a much-needed edge. In these cases, agents may be more inclined to pay for staging, seeing it as a way to differentiate the property from others and get it sold.

Conclusion: It’s a Matter of Strategy

Ultimately, the decision of who should pay for home staging depends on a variety of factors, including the seller’s financial situation, the agent’s approach and the state of the real estate market. In many cases, sellers are the ones to cover the cost, seeing it as an investment that will help them maximize their sale price. However, in some situations, agents may take on the responsibility, either as part of their marketing strategy or to build goodwill with clients. After all, an agents job is to market the property and staging is the highest form of marketing.

Regardless of who foots the bill, it’s clear that staging can play a crucial role in the home-selling process. Whether the seller or the agent pays, the important thing is ensuring that the home is presented in a way that attracts buyers and helps secure the best possible deal.