What Sells a Home Best? Vacant, Seller, or Tenant Occupied? 2022 Report
Since 2017 we’ve been creating this annual report to help our clients know what occupancy status is better for a potential home sale. Is it easier to sell a home if it is vacant, seller, or tenant occupied? While most of our clients can guess it is more difficult to sell tenant occupied, this annual report helps them know just how much harder it is to sell with a tenant inside. Also for homeowners deciding to move out first and vacate or sell while still living in the home, these reports can be helpful.
The numbers used. This report is based on data from RMLS, our local multiple listing service. We are looking exclusively at city of Portland proper, detached home sales over a multiple month period each year. In order to determine the percentage of homes that sold we look at the total number of sold homes for a period and the total number of cancelled and expired (same end result of taking the home off the market) homes in that same period. Meaning each time a home is listed for sale on the RMLS there is then a certain percentage chance it will actually sell based on a different occupancy statuses.
In Previous Years Vacant Always Sold Best Followed by Seller Occupied, then Tenant Occupied
|Vacant Homes||83% Sold||78% Sold||73% Sold||83% Sold||87% Sold|
|Seller Occupied||75% Sold||71% Sold||65% Sold||78% Sold||85% Sold|
|Tenant Occupied||63% Sold||52% Sold||51% Sold||60% Sold||54% Sold|
2022 Report on What Occupancy Status Best Sells a Home
The numbers below are compiled from Jan. 1st 2022 to June 1st. 2022 using the criteria spelled out above.
|Vacant Homes||54||166||1974||89% Sold|
|Seller Occupied||76||154||1642||86% Sold|
|Tenant Occupied||25||18||96||56% Sold|
The 2022 Portland real estate market started out with a bang and a tremendously hot sellers market (though it is cooling off now). This is easy to see in the high percentage of success in vacant and seller occupied home sales. But even in Q1 in a historically hot sellers market, tenant occupied homes barely sold more than half of the time they went on the market.
It’s no surprise nearly half of all Tenant Occupied homes don’t sell each year.
Tenant Occupied Homes Don’t Show Well. The tenant has no particular motivation to keep the home in constant showing condition, whereas the seller living in a home has a direct financial goal and reward. This goes both for interior staging and exterior landscaping.
Tenant Occupied Homes are Tough to Access. Tenants in Oregon have a right to peaceful, quiet enjoyment of their rental home. If a tenant doesn’t want to allow a bunch of showings, they don’t have to (depending on your interpretation of the law and this is not legal opinion, when in doubt consult a licensed attorney). The homeowner has to work around the tenant’s schedule, the homebuyer’s schedule, and often the buyer’s Realtor’s schedule (that’s a lot of schedules) to get a showing to happen, assuming the tenant is cooperating in the first place.
Homebuyers are Scared to Buy a Tenant Occupied Home. What if the tenant decides they won’t move out after all? It isn’t easy to remove a tenant in Oregon and they have a ton of protections. The homebuyer may worry, despite reassurances, that even if it is within their right to buy and move into the home, the tenant will refuse to leave when the time comes (and honestly it does happen sometimes).
Potential Ways to Sell a Tenant Occupied Home
- The buyer accepts the tenant. Keep in mind this buyer is therefore an investor and will have to put more money down to get a loan and will have to buyer at a higher interest rate. Also, investors won’t want to pay top dollar for the home (because they’re investors).
- The buyer plans to move in and make it their primary residence.
- The tenant can legally be defined as a short term renter and can be given notice to vacate prior to close.
See if you can come to a Mutual Agreement for the Tenant to Vacate before Trying to Sell.
Let them know your plans to sell the property and offer to help them find their next place. Offer cash for keys, meaning tenant signs something agreeing to move out before you go on the market in exchange for some additional funds or reduced rent. Giving your tenant extra money to vacant will likely earn you a whole lot more money than it costs you in a home sale and can be a win-win situation for both parties.
Note: none of this advice applies to selling multi-family homes. Multi-family homes are typically sold to inventors who prefer to purchase them fully tenant occupied. This advice and report is exclusively for single family detached homes.
Top 1% Portland Sellers Agents
We charge 4% max. commission in Portland and SW Washington and have completed over 2,000 home sales since 2003. Our top seller’s team would love to talk with you today about your plans. Give us a call direct at 503-714-1111 or chat with our bot on this site. We look forward to connecting with you.June 17, 2022