If you’ve ever tried to sell a home, you probably heard a lot about clearing the clutter. Buyers want to see a home’s potential, experts say. Decluttering the rooms and taking out personal items helps buyers see themselves living there.
But there also can be too much of a good thing. Experts say a vacant home doesn’t show as well as one that appears lived in. The rooms appear smaller when they’re bare of furniture. Every little blemish on the wall or worn spot on the carpet will stand out as if in a spotlight.
The end result, according to common wisdom? Vacant homes are on the market longer and sell for less than comparable occupied homes.
Sometimes, though, you have to move before you sell your home. Can you counter the curse of a vacant house?
Probably not, says real estate consultant and college professor Lary Cowart – at least not if you try to sell the home without a stitch of furnishings. He’s got the statistics to prove it.
Cowart, an associate professor and chair of real estate studies at Morehead State University in Kentucky, co-authored a study that compared the sales prices of vacant homes and homes that were still occupied. The study, published in the Summer 2004 professional journal of the Appraisal Institute, examined the sales of nearly 1,900 single-family homes in Lexington, KY. About 600 were vacant.
The findings? Vacant homes typically sold for 5 percent to 6 percent less than comparable occupied homes. They also stayed on the market for an average of 54 days, compared with 35 days for occupied homes.
“The reason, I think, a vacant house is discounted … is that the seller of the house is more likely to be under some kind of pressure to sell,” Cowart said in an interview. Those pressures can include trying to pay two mortgages or being unable to buy another house until the old house is sold, he said.
Buyers and real estate agents often assume someone selling a vacant home is strapped and will accept a lower offer, Cowart said. With that in mind, buyers might be less likely to pay full price.
Cowart and co-researcher Chien-Chi Peng, an assistant professor of finance at Morehead State, were unable to determine whether the sales prices of vacant and occupied homes started out at different levels, or whether the sellers of vacant homes had to drop their prices after they were on the market for some time.
The data did show that on average the vacant homes were a few years older than the occupied homes. Whether that affected the condition of the properties was unclear.
Cowart noted that new homes sell even though they are vacant. Buyers know the builder is not going to discount the property, he said.
If you do have to move before selling your home, Cowart advises getting the house super clean. That means painting and cleaning the carpets and fixing everything up in addition to scrubbing from top to bottom.
“You want it looking as much as it can like a new home,” he said.
Published on June 19, 2007