Our clients often ask us: How do we know that staging makes a difference? How do we know how to price a home? What upgrades make the biggest difference for return on investment (ROI) when selling a home?
Because we almost always sell for above asking and with multiple offers, we know that we upgrade, stage, and price homes well. But we can’t do a controlled study. We rarely get to make side-by-side comparisons that show our clients exactly how what we do makes a difference. Unfortunately, that’s just now real estate works.
As top producing San Francisco real estate agents, we make it our business to study comparative homes (comps) very carefully. That’s how we are able to decide on a list price that will lead to the highest sales price for our sellers. In this case study, we give you a comparison that goes beyond the comps. You get to see two very similar homes that sold for dramatically different price points.
These two homes are located within blocks of each other, were built within one year of each other, and sold within months of each other. Both homes have three bedrooms, similar lot sizes, and parking along with similar exteriors.
Why did the home our team represented sell for 50% over asking, while the other home sold for only 13% asking? Not only did the home we are comparing sell for less, it went through a price reduction that likely increased seller stress, and made the selling process longer.
There are three main reasons our team’s home sold for, $555,000 over asking, so keep reading if you, like so many of our clients, want to know what really results in the highest ROI.
Our team is great at pricing, and our results show it. We priced our home at a price that generated a lot of interest and stimulated multiple offers.
The other seller priced their home too high, which was a turn off to buyers, especially when you consider that they did not do much in the way of staging or upgrades.
When a home is priced at $1.6 million, buyers expect a certain look, upgrades, and amenities. If a home is priced at $1.6 million, but looks like a $1.25 million home, buyers get turned off. If a home is priced at $1.25 million but looks and feels like a $1.6 million home, buyers feel like they are getting more for their money. And who doesn’t want that?
Homes also need to be priced the way other homes in the same neighborhood with similar size and qualities are priced, which has more to do with list price than the final sales price.
Pricing also affects the amount of buyers you get visiting the first open house vs. the third, when people are less interested. In other words, fewer people will look at the $1.6 million home and, even if you drop the price later, which these sellers were forced to do, your chances of getting to your desired price are lowered. It is very hard to get people interested again.
The Krishnan Team’s founder, Ruth Krishnan, has both a sales and a design background, and so she carefully chooses the staging teams that she works with and is actively involved in the process. She has learned that staging plays a critical role in getting an excellent ROI when you sell a home and this is what she teaches her team.
The other seller, despite the initially high price point, barely staged their home. That decision gave buyers an initial impression of a higher cost, lower value home, which slowed momentum and interest in the home and very likely contributed to the home’s lower sales price.
To see how we stage homes, check out these before and after pictures:
In the property we represented, we focused on the following key upgrades:
We always ask ourselves, what is the potential ROI? In this case, we did not replace cabinets, we painted them and added new knobs and new countertops, saving both time and money — and made a big difference. We replaced the asbestos ceiling, which would have been a huge negative for potential buyers. The other seller and their team kept unattractive paneled ceilings which, though they may not have had actual asbestos, suggested an out of date, possibly unhealthy, look and feel.
A home’s value is established by good staging and also the actual fixes and upgrades. Our team always considers both the effect of staging and the difference that upgrades make because we know that real quality and customer service create a level of both seller and buyer satisfaction that leads to referrals and builds our business. This kind of a commitment is a win for everyone.
We have learned that it is very important to pay attention to the pricing strategy in a given neighborhood, and to understand buyer psychology. Key upgrades make a big difference. And staging is critical because it helps set a buyer’s price filter to a home that looks beautiful and provides them with a sense of value.
It’s important to work with a team that has a design background, knows where to spend money in the right places, is willing to project manage, and has the skills and connections to do it.
Check out this link to the home we represented, which sold for 150% of asking.
And check out our comparison home, which sold for less.
Whether you are a San Francisco buyer or seller, Team Krishnan is ready to get you results. We look forward to helping you sell your home, or find a home you love. Contact us at (415) 735-5867 or info@ruthkrishnan.com.
