A new study from Redfin proved what we probably all assumed was the case; vacant homes sell for less than those filled with stuff.
There’s something slightly unappetizing about a vacant home, whether it’s the emptiness of it all, or the desperation knowing someone is losing money each month it sits on the market.
Homes are also simply more exposed when there aren’t area rugs, couches, tables, and beds covering up minor (or major) defects.
Vacant Homes Sell for Less and Take Longer to Sell
- Empty homes sold for 3.6% less than occupied ones in 2018
- That’s about $11,000 less on average
- They also took an extra six days to sell
- So you may want to stick around (or at least make it appear that way)
As suspected, vacant homes often sit on the market longer than their occupied counterparts and fetch lower prices.
On average, such properties spent an additional six days on the market and went for $11,306 less when they finally did sell.
This is according to a survey of homes listed and sold in 2018, conducted by real estate brokerage (and mortgage lender and iBuyer) Redfin.
The biggest discounts were seen in Omaha, Nebraska and Greenville, South Carolina, where vacant properties sold for 7.2% less than occupied homes on average, a haircut of about $15,000.
Similar discounts were seen in El Paso, Texas, where the average vacant home sold for 6.6% less, or roughly $10,000, compared with occupied homes.
Discounts were smaller in more in-demand metros, including San Jose (just 0.9% less), Las Vegas (-1.5%), and Orange County (-2.3%).
How Many Homes Sales Are Vacant Properties?
- Over a third of home sales in 2018 were vacant properties
- But share of unoccupied homes varied widely by region
- 67% of sold homes in El Paso, TX were unoccupied
- While just 13% were empty in Kansas City, MO
Interestingly, Redfin found that 35.5% of all properties that sold in 2018 were empty at the time of sale.
That’s a lot more than I expected it to be. The share must have been really high during the housing crisis a few years back.
But this varied tremendously from one metro to the next.
For example, 67% of homes in El Paso, Texas were empty when they were listed for sale, whereas only 13% of Kansas City, Missouri homes were unoccupied.
There were a lot of empty homes in Arizona too, with both Tucson (54%) and Phoenix (50%) having large shares of vacant home sales.
Similar numbers were seen in Austin, TX (52%), Tacoma, WA (51%), and Las Vegas, NV (49%).
Meanwhile, empty homes were more of a rarity in Fort Lauderdale, FL (14%), Hampton Roads, VA (17%), and Greenville, SC (20%).
Make the Home Look Lived In, But Have Good Taste
- Not all occupied homes are created equal
- A poorly decorated home could actually hurt its chances
- Expect to do some cleaning/renovating/staging if you sell your home
- Many real estate agents now provide some of these services
While vacant homes mostly sold for less than the occupied ones, results may vary based on how the house itself looks and how it’s decorated.
Redfin agent Billie Jean Hemerson notes that a home seller’s furnishings can have a big impact on sale price.
If the home isn’t empty, but all the furniture looks like it’s from 1980 (in a bad way), or there’s lots of clutter, it’s probably going to do more harm than good.
Conversely, if the home seller has good taste that fits with what today’s home buyer is looking for, it could result in a price increase and perhaps a bidding war.
So just having an occupied home isn’t enough. There’s a good chance you’ll need to put some work into it if and when you list.
Fortunately, many real estate agents these days include some level of home staging in their listing package.
And Redfin themselves offer a so-called “concierge service” for a 2% listing fee (instead of 1%) that includes cleaning, staging, and a custom home improvement plan.
The company also recently partnered with a virtual staging company called roOomy to help decorate vacant properties, ideally so they sell for more in a shorter period of time.
Ultimately, when a home buyer checks out your property, they’ll want to get a sense of what it will be like when they live there.
If it’s empty, or poorly decorated, some prospective home buyers may not be able to look beyond that, even if the home itself is just fine.
Of course, if you’re a savvy home buyer with an eye for design, you might be able to snag a discount on a home that needs just a little bit of TLC to get back to its prime.
As a buyer, you should take note of the fact that vacant properties often sell for less, and use it as a negotiating tool.
While the staged homes will undoubtedly look more appealing, there’s a good chance they’ll sell at the higher end of the market.
And all those beautiful furnishings will be gone once it’s time for you to move in…
Read more: 12 home selling tips for 2019