When you view a home for sale, you expect to see rooms with everything in place. But white boxing in real estate gives you ultimate customization options. —-
When you view a home for sale, you’re probably expecting to see rooms with everything perfectly in its place. From the thoughtfully positioned furniture to the stylish area rugs to the art on the wall and the other special small touches throughout, the home is a place where you can see yourself living and thriving. A lovely kitchen where you can imagine dinners around the table, the ideal setup with a big-screen TV to watch the game on Sunday, or even the perfect reading nook to relax on a rainy day with your favorite book. But what if, instead, you walked in and found a blank slate?
Even real estate novices likely know what what staging means: It’s when sellers bring in all the bells and whistles to dress up a home to look its lived-in best and create an aspirational setting. But do you know the term that approximates the opposite of that?
“White boxing” in real estate is when a seller empties the property of everything inside to show it as a blank slate. This lets potential buyers visualize their own lives inside it and handle all of their own customizations from top to bottom once it’s theirs.
It’s a newer term, rising in popularity over the last couple of years. And it’s not uniformly used, explains Lynn Carteris, a top-selling agent with the Oldham Group who works in California’s bustling Bay Area. But it’s a useful label to describe and understand a particular real estate market strategy.
To help you learn more about white boxing, the philosophy behind it, and the pros and cons of this approach, we put together this expert-backed primer.
What is white boxing in real estate?
The term white boxing in real estate refers to the practice of completely emptying a property before listing it for sale. Instead of encouraging buyers to see what it could look like to live in the home when it’s fully decked out, white boxing strips down the space. It allows buyers to see a perfectly blank slate and envision how they would build it up, furnish it and create their own dream space.
To be a true white box, sellers will remove just about everything — not just furniture. That includes striking window coverings, removing light fixtures, and everything down the line. In the purest of white boxes, even the floors, paint and other interior wall coverings, and most plumbing fixtures are also removed, leaving concrete floors and sheetrock walls that can be customized to the buyer’s exact specifications and style.
Why might a seller white box a house?
White boxing is most popular with luxury homes — often in major metropolitan markets — where buyers might already intend to customize anything they buy to their liking (and have the budget to do so).
It can also be popular in homes where features like spectacular views or unique architectural designs might be less obvious if the room is finished and full of items. White boxing lets those standout features speak for themselves, and without any dilution of their impact.
Beyond that, white boxing can happen when people move out with a sense of urgency — such as, Carteris says, the wave of people leaving her state as companies seek more favorable business climates and employees work remotely in areas where the cost of living is lower.
“They can’t get out fast enough,” she says. “So I think we’re going to see a lot more of these white box houses coming on the market.”
Carteris also notes that going this route can be a better financial decision for sellers under certain circumstances. “All too often, a seller feels that doing the remodel themselves would help improve the price, but so often we see that as not the case,” she says. “[The] buyer doesn’t like the finished product, feels it’s been done on the cheap just to get it to market, [and it] definitely does not make the seller more money. As a rule, I’ve seen those sit and the seller taking a big hit, as buyers don’t see the value and will have to redo a lot of the remodel themselves, therefore lowering their offer price.”
What are the pros of white boxing for buyers?
The most obvious pro of buying a white boxed home? The customization opportunities are endless. You don’t have to live with hokey light fixtures or carpeting that you hate — not even for a minute. You’ll start from scratch on the home as its new owner, overlaying your personal tastes from the get-go.
“I have clients currently looking for a white box in their price point. They don’t want anything done to it, they want to do it themselves,” Carteris explains. “It also might be an opportunity for an investor to come take it down to one stud to qualify it as a remodel in the eyes of the county and city, and remodel it and still make money.”
Also, when you consider a white-boxed property, any potential issues with the house may be more apparent. There will be fewer mysteries, fewer places for problems to hide, and the home inspector will have an easier time evaluating the place with its inner workings laid bare.
Evaluating the space will also be easier for the potential buyer, who will be able to focus on home features besides the interior space.
What are the cons of white boxing for buyers?
Older homes might need a lot of work done
The flip side of that same pro could also be a con, Carteris says. “It’s just like having surgery: The doctor doesn’t know what he’s going to find until he cuts you open, and it’s the same thing with a house,” she says.
“You may find stuff in the walls. You may find electrical done incorrectly. Chances are with an older home, you’re going to have to replace all the electrical and plumbing anyway, and it can be outrageously expensive.”
White-boxing can force unnecessary upgrades
Another point to make: If you hadn’t known about all the potential for immediate upgrades, you might have been able to live comfortably with the older infrastructure for longer — even years, perhaps — before it presented any problems requiring attention (and expense).
You’ll need to pay to finish the house, and wait to move in
Further, a white boxed home, as a blank slate, is not move-in ready. These homes will require at least a little bit of elbow grease (and probably more than a little) before you can move in, especially if they are truly white boxed.
Of course, getting there requires money. Plus, depending on how available contractors are in your area, the process could take a considerable amount of time before you can ever occupy the house.
Carteris notes that contractors are especially busy this year, with many people choosing to remodel as they’re spending so much more time at home because of COVID. “The price of lumber has tripled, the granite maker is taking longer because they’re in such demand,” she says. “So it’s going to cost you more [to remodel].”
She advises clients to think seriously before they commit to getting “a good price on the house and property taxes” if it means “you’re going to spend triple” on a remodel in the end.
In other words, with a white boxed home, you might be getting a good value — but you also might not. And you might only learn that it’s not a good value through a potentially stressful, expensive, and time-consuming process.
Beyond that, some clients simply don’t have the knowledge — or the interest — to take on such a big project. “So it’s a very specific buyer” who’s the right fit for a white boxed home, Carteris says — and this buyer might be a seasoned investor rather than a novice homebuyer.
Indeed, not every buyer has the imagination to picture the potential in a white boxed house. And that’s OK! It comes down to a matter of personal preference: Do you want all the pieces in place to visualize yourself in your future home, or do you prefer to see the bare bones and make it your own? That’s up to you.
Header Image Source: (Nasimi Babaev / Shutterstock)
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