Real Estate Market

Why vacant homes are a tough sell

(3/30/2011) Erate Exclusive - A vacant home is a tough home to sell, and a growing number of them are clogging the pipeline.

Of the nation's estimated 130 million housing units, 11.3 percent or some 14 million units stood vacant last year, according the U.S. Census.

Among properties defined as "vacant" are rental units, vacation homes, properties rented or sold but not occupied and others, but a growing number are foreclosed, abandoned, distressed or otherwise victims of the housing downturn.

In 2005, before the bust, less than 10 percent of the nation's housing stock was vacant, according to the Census.

Thomas Scott, VP of Marketing at Showhomes, a franchised home staging company, recently told Rismedia, trying to sell a vacant house adds obstacles to the sale and depresses the sales price.

"Home owners don't realize how much harder a vacant home is to sell. In today's market, you have to win the beauty contest," Scott says.

Vacant homes are also tough to insure because theft, vandalism, fires and water damage are more likely to happen in an empty home.

Vandalism and theft brings an unsavory element and, well, there goes the neighborhood and the values of surrounding properties.

With no one around to report incidents, damage can become worse.

Scott and others explain why it's better to stage a home, rather than leave it empty, especially in today's market.

"Given the vast oversupply of homes currently on the market, only the jewels will sell. If a home is vacant, it must be updated, remodeled or staged if it is to have a chance of selling," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

• Chilly reception. A blank home is a tough sell because it's like a cold, blank slate. It tells the buyer nothing, making a connection or the though of living there tough.

• No signs of life. Without the aromas of a leather easy chair, coffee roasting in the kitchen or a bouquet of fresh cut roses, the dusty, musty smells of vacancy take over.

• Empty can be overwhelming. Especially in larger homes, buyers see too many windows, too much wall. In other homes rooms appear smaller. In either case, buyers have no frame of reference to determine how their furnishings will fit.

• Imagination takes over. Buyers wonder why the house is empty and tomb-like. They may think the buyer left in a hurry and is desperate to sell. That could bring in low-ball offers.

• Flaws give cause to pause. Without furnishings to draw the eye, flaws or defects are magnified. Buyers see all the work and money necessary to repair or update, instead of focusing on the potential for the different spaces. "Some sellers and their agents even go so far as to permit a tenant to live in a property listed for sale rent-free in order to have some signs of life around as well as someone present to maintain it," Osborne said.

 

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