This is my first contribution to HomeGain and thought what a better place to start then at the beginning – the importance of home staging and why it is such a hot industry in the real estate market.

In 2009 HomeGain released its national survey results for the top Return on Investment (ROI) for home sellers. HomeGain surveyed over 1,000 realtors across the country and found that the number one home improvement ROI was cleaning and de-cluttering. These two are inexpensive and truly the first two necessary steps in preparing any home for sale. The second best ROI was home staging — followed by lighting and landscaping.

The previous survey released by HomeGain was in 2007 and placed home staging behind lighting and landscaping. HomeGain estimated a 585% ROI, with average costs under $5K, and I am not surprised given the importance and success in this growing industry.

Although many have claimed starting the idea of home staging, the industry really was born out of necessity for realtors who were selling run down and cramped houses. Back then there just was not a name for it.

Savvy realtors realized that some homes needed serious help before they could put the home on the market.

It wasn’t that it needed a new roof, electrical or plumbing, it was that the home was just impossible to navigate for potential clients. At the time, and still today, many realtors did the work themselves. But, if the real estate agent couldn’t manage the job, they called in interior designers who charged high fees to the homeowners.

The concept of staging homes shifted in the 1990’s though, from not just a necessity but to one of luxury.

A realtor would hire interior designers to redecorate the home for the specific purpose of selling it, using a designer’s eye for placement and detail to entice future buyers. It quickly became a resource for those who could afford the designer prices to help set their home apart from the rest. But with the last several years of declining home prices, staging shifted back again from a luxury item to one of necessity. With the glut of homes for sale, if your home didn’t show well then it was left ignored; overlooked by homebuyers who couldn’t “see” themselves in the home — moving on to the next home for sale just down the street.

The good news from the National Association of Realtors® (NAR) is that we might be turning the corner on declining home sales, as 2009 annual sales grew by 5%, the first annual increase in the last four years.

In response, Lawrence Yun, NAR’s chief economist, said that 2010 looks to be a more balanced market with sales on track to rise again. But no matter how quickly the market turns positive, home staging is here to stay. It has shown, with a tested track record over the past 20 years, that staging helps realtors sell homes faster, and at a higher value.

In HomeGain’s 2009 survey, which is the most recent national analysis on the subject of home staging benefits, it showed that 44% of realtors surveyed say a staged home sells weeks faster than a non-staged home, and almost 30% said a home sells months faster.

With a 586% ROI, it is clear that home staging is a very valuable resource for any home seller, in any market.

Given the success of staging, home staging firms have grown rapidly. Businesses range from a one-person shop out of their home, to higher end multi-disciplinary firms that include home staging, interior design, construction and even storefront sales. A good stager does not need to be expensive, but they do need to have a good understanding of interior design, architecture style, and detail. Everything comes down to the details. From the scale of the furnishings to the room to the color that attracts and not distracts, down to the cobwebs and fingerprints.

Stagers also need to have good social skills, which will help them navigate both the realtor’s expectations and the homeowners. Because no matter how valuable a resource home staging is to realtors, homeowners are not always as easily convinced to pay for the service.

When I am called in, I am very cognizant of the home sellers’ feelings. The homeowner has spent a great deal of time bringing their home to the place it is; they have raised a family in it, gone through remodeling, or simply put their entire lives into living in it. The last thing that I want to do is tell them that I am going to “fix” their home without making sure that they are ready to move on. Because if they are not willing to let their home be prepared for sale, then staging it is not going to be successful. Each step will be met with resistance and ultimately the home will not be shown in the best light for sale, but rather the best light that the home seller wants. And it is not so much that their personal things aren’t perfect, it is that it just might not be perfect for the next owners.

The first meeting is a moment of therapy, not business. And once we agree to move forward, then the fun for me begins. Home staging is not a glamorous job. It is backbreaking and sweaty. There are a lot of starts and stops before the finished work. But there is nothing more satisfying to me then when I am finished – looking at a home that I know the next owner will feel eager to own. It has been prepared for them.

Over the coming months I will talk about what tricks I have learned to prepare a home for sale, at the least cost, and what must-haves every home needs before the first Open House.

I will also talk about how to meet the resistance of home sellers. There is a lot to know about the intricacy of home staging.

Staged Homes, LLC is very excited to share with you some of our philosophies, resources and techniques. We hope you will share your comments, ask questions and follow along with us in our discussion!