The furnishings are negotiable in the sale of this five-bedroom home in San Diego. A living area in the home is shown. Susie Nancarrow, of Nancarrow Realty Group, has the listing. Preview First
Some buyers want the house and everything in it.
One in every 150 homes on the market includes “turnkey” in the description, according to an analysis by real-estate brokerage ZipRealty. ZIPR -1.21% Turnkey generally describes homes that don’t require any major repairs or renovations.
The moniker is most common on the West Coast, where some metros saw a 20% increase in turnkey listings over the past year. Nationwide, however, the number of such listings has dropped slightly since 2012. Turnkey properties had their heyday in 2009 and 2010, partly due to investors buying foreclosures and flipping them.
In some cases, a turnkey listing means that everything in the house comes with the sale. “Turnkey means art, it means silverware, linens—every single thing a family wants if they wanted to move in tomorrow and not buy anything but food,” says Paul Benson, a real-estate agent with Summit Sotheby’s International Realty in Park City, Utah.
Nationwide, listings billed as turnkey are 3.1% more expensive than listings without the term. ZipRealty CEO Lanny Baker says the premium is highest in areas with the most foreclosures—perhaps because agents are looking to differentiate their listings.
Cities like Phoenix; Sacramento, Calif.; Las Vegas; and Orlando, Fla. had a high amount of foreclosures, Mr. Baker says. Phoenix and Orlando ranked among the top five metro areas with the most completed foreclosures in the past year, according to real-estate data company CoreLogic. CLGX -0.68%
Many metros on ZipRealty’s list of top turnkey areas were hard hit during the downturn, says Leslie Piper, Realtor.com’s consumer-housing specialist and an agent with Pacific Union in Lafayette, Calif. She estimates that 30% to 50% of turnkey homes in her market are created by real-estate investors or flippers.
Susie Nancarrow, broker and owner of Nancarrow Realty Group in San Diego County, believes turnkey isn’t necessarily synonymous with “move-in ready.” For instance, a 1970s-style house in great condition isn’t turnkey because it’s dated. “I usually use ‘turnkey’ when the house is up-to-date with today’s buyers’ expectations,” on par with a model home, says Ms. Nancarrow, who uses the term in one in 20 listings.
Turnkey homes are also common in vacation destinations, where buyers tend to own multiple residences and don’t want to deal with the hassle of outfitting a home. “To these buyers, time is everything. Anything you can do to save time makes the deal,” says Mr. Benson, adding that about half of his listings are turnkey homes.
Source : Wall Street Journal