| Selling

For some reason it can feel kind of scary when you’re trying to sell a vacant home in Toronto. And we’re not just talking about worrying about things like breaks ins, squatting or vandalism. We’re talking about whether you’re going to get hit by the vacant home tax thing, trying to sell a completely empty home that feels soulless and even the potential extra work it takes staging and marketing wise.

To help make the prospect less daunting, we thought we’d look at the differences between selling a vacant home versus a home where someone is living, the situations that lead to listing a vacant home, overcoming the potential risks, and the extra effort it might take to make that sale. 

Let’s dive in.

What’s Considered a Vacant Home Exactly?

A vacant home is just that. No one lives there and there’s barely any signs anyone ever did. 

Is Leaving a Home Vacant When Selling SO bad?

You know what, not really. Well, it can be. Actually, let’s back track a bit and look at why your home is vacant in the first place to help answer this one. 

  • The old night escape: So, one of the reasons a home might be vacant is that it’s your investment property with tenants who just upped and left. In most cases this isn’t a tragedy because hopefully you collected your last month’s rent. However, if the tenants left the place in complete disarray, then it becomes a problem. Since you have their deposit you can cover some damage, but a real mess leaves you footing the bill to prep the home for sale. This takes longer to list, and possibly longer to sell, which means you’re out of pocket for your mortgage payments. 
  • Divorce city: Now, during separation and divorce, it’s not unheard of for both parties to vacate the premises. This helps reduce friction and makes it easier to get a quick sale. Vacancy in this case tends to be a good thing in that the home is easy to show without trying to mediate things for a feuding couple. However, it can also make staging the home more costly and difficult if say the owners leave random large furniture pieces in the home that neither person wants, there’s serious garbage and neither person is willing to clean it, etc. Kind of like the landlord scenario, but without a deposit to cover the costs! 
  • Early home purchase: In some cases, it might be that you found a home and couldn’t wait to move in. This is a common thing for people relocating, as they tend to focus on finding a place and heading towards their new life. You can make things easier on yourself by having your agent manage the sale for you (BTW, we love doing that so give us a ring if it sounds like a plan!). This can be a good thing as it makes it easier to show the property, buyers can move in without delay, and could help sell the home sooner so you aren’t carrying two mortgages.
  • Downsizing/retirement blitz: If you’ve decided to downsize whether for retirement purposes or otherwise, you might be moving to a furnished home, or just want to get rid of everything. A decluttering blitz allows you to start afresh at your new home with furniture suited to a smaller space. This is a good strategy because you don’t have much to pack and move and your vacant home provides a clean slate in what was likely an outdated design scheme making it easier for staging. But again, this still takes work and money to get the home ready to list. However, you’re more likely to be mortgage-free in this scenario, so can afford the extra time. 

So, as you can see selling a vacant home isn’t so bad, other than presenting a challenge when it comes to staging the space and the risk of carrying two mortgages!

Are you a real estate investor looking for advice? Read these posts next:

If You Had a Choice, Would You Prefer a Vacated or Stay-Put-for-the-Sale Scenario?

Well, if it were us, and our clients chose to vacate, there are more than a few reasons we might take the vacant route. The first is that a vacant home makes it easy to see all the unloved broken stuff in the home that is less noticeable when someone is living there. Spotting all the imperfections allows time to make little repairs so the home feels well-maintained and makes a better first impression for home buyers. Along with a deep cleaning, the home is a clean slate ready for staging. 

Next, once all those repairs are made, we can neutralize the home to make it more appealing to our target buyer, choosing buyer-friendly paint colours that bring out the home’s best features without worrying about offending the homeowners. We can also decide whether there are any eyesores that might interfere with the sale such as outdated, damaged kitchen countertops, wonky, unattractive light fixtures, or icky backsplashes or bathroom tiles that could use a quick makeover. There’s a lot of budget conscious materials out there today that can provide that modern look and a touch more style without breaking the bank. These little touches tend to be a worthwhile investment but are more difficult to make when the home is occupied.

Once the home is ready for staging, we don’t have to worry about editing your furniture, and instead can bring in the exact right number of pieces to put rooms in context. We can set a certain aspirational tone for lifestyle based on our target buyer and make it easy for people to see the size of the rooms.

Finally, we never have to worry about conflicting seller schedules for viewings or depending on homeowners to keep the home clean. But truthfully, we can go either way because we have a killer staging team and can work around occupied spaces like design ninjas! In the long run, the strategy remains the same: set it up to sell.

What Would Be the Advantages to a Vacant Home For Sale?

From an agent’s point of view:

When the home is occupied, emotions get the best of the owner listening to buyers point out every little bad thing about their home. That hurts. It’s uncomfortable having buyers walking through your living room making comments about how bad your taste is (not that you have bad taste, but some buyers just can’t stop themselves from saying things like that!)  This often translates into revenge at the negotiation table because you don’t want that little so and so who said your curtains look like the before shot in a weekend makeover spread on HGTV.com to get away with it. That makes our job tough. For the agent, showing a home sans the occupant keeps things all business, so the only thing to get emotional about is tears of joy when the home is sold.

From a seller’s standpoint:

Not having to worry about keeping things clean or thinking about people opening your undie drawer when you’re not home during viewings is always nice. If you’ve moved out, you’ve also moved on, so everything is in your real estate agent’s hands. No fuss, no muss. You can also focus on negotiating for something bigger than the closing date, namely the highest price. If you’re all nice and flexible by “begrudgingly” agreeing to the buyer’s extra short close, they might be more willing to give a little more price wise. Win, win.

Oh, and one last thing. Living in a home once you’ve accepted an offer is awkward. In fact, if anything breaks while you’re there for that last month or two, you’re on the hook to restore things to the condition they were in when the offer was accepted. So, by moving out, you reduce the risk of breaking anything. (You’re welcome fellow klutzes!)

On the other hand, you may be in a position where you need to sell a tenanted property. Here’s how to handle that situation.

But When Would I Be on the Hook for Those Vacant Home Taxes?

Okay nope, this isn’t a problem. The rule is that a “Vacant Home Tax of one per cent of the Current Value Assessment (CVA) will be levied on all Toronto residences that are declared, deemed, or determined to be vacant for more than six months during the previous year.” So, first, if it’s your primary home, the taxes don’t apply. In the case of investment property, you would need tenants for a total of six months or more during the previous calendar year. If you’re selling as a landlord, having your property sit vacant and on the market for six months isn’t a problem because there’s what’s called a “vacant new inventory” exemption. That means that because your unit was actively offered to the public for sale in the taxation year for which the property is being declared, the taxes don’t apply. 

What are the Potential Risks of Selling a Vacant Home?

There are risks, but they’re all avoidable:

People are putting in low ball offers because they think you’re desperate 

Solution: Hire a real estate agent who understands the market, so your home is priced fairly at that sweet spot to attract buyers AND knows how to stage the home, so it doesn’t look deserted. 

No one “gets” the space because you leave the home void of furniture, so you aren’t getting offers

Solution: Stage the home to perfection so buyers feel the vibe of what life is like here and don’t get creeped out by a bunch of empty rooms that feel haunted or that buyers can’t put in context.

No one is putting in offers because the home is in noticeable disrepair

Solution: This one can be a little more challenging curb appeal wise. While keeping the interior spic and span and neutral-buyer chic is easier in a vacant home, garden maintenance is more of a challenge. In this case, you’ll need to make sure everything is weed and garbage free, the lawn is mowed (or the snow is shoveled) and flyers and junk mail are cleared away. 

Learn more about selling your Toronto home right here:

Are There Any Special Tricks to Marketing a Vacant Home?

We’ve covered all the things we would do to help market a vacant home effectively. However, not all homeowners want to invest in updates or have their home staged. In this case you can choose to do “digital/virtual” staging to create a CGI furnished home with all the modern aesthetics that appeal to your target buyer. 

Digital staging uses 3D software to generate pretty convincing digital furniture arrangements using actual photos of the home. It allows buyers to see the home complete with furniture, décor, and finishing touches that enhance the space without misrepresenting the true size, condition, and elements of the home. We’re obligated to state we’ve used virtual staged photographs to help buyers picture the room in a furnished state and ensure every image is free of manipulation that misleads buyers. 

How Do I Protect and Manage My Vacant Home During the Selling Process?

There are several things you should do when selling a vacant home, including:

  • You, a friend, or your real estate agent should be checking the home weekly to make sure everything is okay, and the exterior looks maintained and safe.
  • Don’t cancel your home insurance until the home is transferred over to the buyer just in case something bad happens. 
  • Keep the utilities on so you can turn on the lights and HVAC for showings and make the home look lived in to avoid break-ins. 
  • Do the staging thing right. 
  • Keep the heat set to weather appropriate temperatures so buyers feel comfortable when they tour the home.
  • Also, do not turn the heat off in the winter or your pipes might freeze and burst!
  • Put lighting on timers and install a smart thermostat so you can manage the lights, adjust the HVAC, and basically make the home feel and look lived in remotely. 

So, what’s the difference between selling a vacant and occupied home? 

The main difference are:

  • All the things above are things you’d be doing while living in the home. Unfortunately moving out doesn’t spare you from doing them once you move out, which can be a burden for people with busy lives. 
  • What many sellers like is that they don’t have to worry about keeping their home presentable until the home sells or contend with strangers traipsing through their home scrutinizing every square inch while they’re sitting right there. 
  • If you have a mortgage, you’re likely facing carrying two mortgages (or paying rent and a mortgage) when selling a vacant home. 

The Bottom Line

Empty homes are creepy, cold, and confusing for buyers who have trouble envisioning how they’d use each room. As long as you stage the home, you won’t need to worry about your home not selling. Although it does take extra effort to keep an eye on your property when you’re not living there, that’s balanced by not having to worry about daily upkeep for showings. So, if you’re mortgage free, have trouble keeping your home clean, and don’t mind dropping by your home once a week to make sure the property is in good order, selling vacant isn’t so bad. 

Call The Christine Cowern Team at 416.291.7372 or email us at hello@christinecowern.com with any questions or to set up a call to discuss selling your vacant property. We’d love to work with you!