What Sells Better: Vacant, Seller, or Tenant Occupied Homes?
If you asked any experienced real estate agent, they will most likely tell you that vacant homes sell the best, followed by seller occupied, and then tenant occupied. I also know from my own experience that this is generally true, but I couldn’t find any hard data. So I did the research myself!
I ran the data in RMLS for all the Portland (city proper) detached homes that have been put up for sale in the last six months (prior to 4/14/2017).
Vacant Portland Homes
In the last six months in Portland, 2240 vacant homes were listed for sale.
Of those 2240 vacant homes, 1842 actually sold. This gives us a 83% success rate and a 17% failure rate. 17% of these homes were listed but did not sell, they were taken off the market as a cancelled or expired listing.
Seller Occupied Homes
Similarly, in the last six months, 1791 owner occupied homes were listed for sale.
Of those 1791 owner occupied homes, 1333 actually sold. This gives us a 75% success rate and a 25% failure rate. Again, that means 25% of these homes were listed for sale but after a while were taken off the market as a cancelled or expired listing.
Tenant Occupied Homes
It seems the general public also has gotten word (or real estate agents are helping spread it) that selling a tenant occupied home is tough business. There were only 213 homes listed for sale as tenant occupied. Of those, 79 did not sell. This gives us a 63% success rate and a 37% failure rate. This failure rate is more than double that of vacant homes! When your trying to sell a home in this hot Portland real estate market and it fails to sell over 1/3rd of the time, that should be a strong indication of a serious issue.
In addition to finding the success / failure rate of selling a home at all, I also ran all the pending (homes currently in contract) sales numbers. This is a snapshot for the thousands of homes currently pending in Portland on this date: 4/14/17. As you might expect, all of the tenant occupied homes that did manage to get in contract and go pending – on average they all sat on the market longer than vacant or seller occupied homes before accepting an offer.
What can we learn from this?
It is not always possible to vacate a property before selling. Also please note that vacant here does not mean “empty” as many of these vacant homes were staged. Vacant in this case simply means no one is currently living there. Vacant homes sell better than any other type of home. I think there are a number of reasons for this. First, buyers agents can be crazy busy in Portland. If the buyer’s agent sees that they have to call and make an appointment first, that can cause some to keep looking. If the buyer’s agent sees it is vacant and the showing can work with their own schedule and with whatever the buyer’s schedule is, it is simply more likely to go on the home tour list. Second, when people occupy homes, they occupy them. It is difficult to always clean up, remove the pets, leave the house whenever the listing agent wants you to for a showing. It can be tough. (We have some powerful tricks to help our seller clients in this situation, ones that practically eliminate the problem altogether, but I won’t go into that here.) Third, if the home is tenant occupied they may not have the same motivation as the seller for the home to sell. The seller is motivated to clean, get the house ready, make sure everything is perfect. I’m sure you can draw the conclusion here.
Bottom line: If possible vacate your home (and possibly stage it, this depends on the neighborhood, home type, and more). Vacant homes sell best. Also, be aware that selling a tenant occupied home is tough and has a very high failure rate, even in a hot Portland seller’s real estate market.April 17, 2017