5 Pro Tips For Selling A House That Needs Repairs
Should you fix up your house or sell it as-is? This is one of those questions where the answer depends on a variety of factors. What budget are you working with? How much time can you allocate? Will it be bothersome to your living environment while repairs are being made?
If you are currently facing this dilemma, this post is for you! Most retail buyers do not want to buy a house that needs repairs because they can’t afford the down payment in addition to expensive repairs before moving in. They want a house that’s move-in ready!
But is it worth taking on all the repairs yourself? Below are five tips to help you understand what goes into home repairs so you can determine if you’re up for the challenge.
Tip 1: Do Your Homework
Don’t go into this endeavor blind. It is important to do a lot of research before you begin so you don’t waste time and energy or cost yourself a pretty penny with little to no resulting benefit when you’re ready to sell.
Weigh The Costs And Benefits Of Each Improvement
Before you even begin to think about the details, ask yourself a few questions. What's the condition of competing homes for sale? Is it a hot, cold, or neutral real estate market? What's the likelihood of a return on my investment? It is important to weigh the cost of the proposed improvements against the home's market value after the repairs or upgrades are completed. Such an improvement might not be warranted if it won't lead to a higher price when you put the home on the market.
Beware of Over Improving
Many sellers put way too much money into fixing up their homes before listing them for sale. They repair flaws that a buyer may not ever notice or just won't pay extra for.
Learn The Current Housing Market
Consider visiting other houses for sale in the neighborhood. Note the condition and amenities and compare them to yours. These homes are your competition and you want to make sure your home meets the standards for your neighborhood. You may not need to buy designer appliances and replace the cabinets to bring your house to full market value but a minor kitchen remodel might be a good investment.
Tip 2: Determine How Much Money You Can Afford to Spend
Typically, there is a long list of updates you want to make to your house. However, you only have so much money and time to make repairs. So, what should you fix? That depends on how much money you have to spend. There are 11 different options when it comes to paying for home renovations.
Personal cash
Refinance your mortgage
Home equity line of credit
Home equity loan
Credit cards
FHA limited 203(k) loan
FHA title 1 loan
Reverse mortgage
Contractor Financing
Take time to research each of these options and beware of sinking further into debt unless you feel confident you can get the job done right. Keep in mind that if a renovation is not needed, then it’s better to keep your equity!
Tip 3: Choose The Repairs You Plan To Make
Your first step is to know what problems are present. Make a list of everything that's defective, broken, or worn out. If you’re not sure what needs to be fixed then you might consider hiring an inspector to provide you with a list of everything you need to have repaired or replaced.
Repair the Critical Items in Your House
Buyers might wonder what else in the home has been neglected if they spot problems or malfunctioning systems as they tour your home. Remember that not all repairs are going to be astronomical in terms of cost or the amount of time that you are spending on them. Minimum improvements you might want to consider making before selling your home include:
Patch holes or cracks in the walls and ceilings
Replace broken appliances and HVAC systems
Fix leaky faucets or other plumbing issues
Replace cracked or broken windows
Repair the roof or foundation if necessary.
Fix any code violations
Replace worn or stained carpeting
Repaint walls with neutral paint
Replace old drapes and window coverings.
Buyers worry about getting into a property that has large repairs awaiting them, so they will likely hire an inspector just as you did. If big repairs are needed, you can expect that the buyers will negotiate g for you to be responsible for the repairs. They may also ask to lower the price significantly, or simply back out of the deal altogether.
Remodel the Entire House
This is the option that will make the house sell faster and for more money. However, it is the most expensive and time consuming option and also the most risky. Remember that you want to market your house to the widest audience so if you opt for a large renovation, make sure to choose more neutral designs and don’t over improve for your neighborhood. Full remodels can take anywhere from 1-3 months or more depending on who is doing the repairs, the size of your house, the availability of money, and the schedule you are working with.
Tip 4: DIY or Hire a Contractor?
Now that you’ve decided what repairs to make, it’s time to figure out who will be managing the process. For smaller projects, you can save a lot of money and do it yourself (DIY). However, some repairs should be left to the pros. How you choose to handle the repairs depends on your skillset, the time you have available, and the amount of money you can spend.
DIY Projects
In some cases, you may be able to do the repairs on your own. Some repairs are very small and with a little focus and teamwork, you and your friends or family can make some great progress in just a weekend or two. There are a number of relatively low cost and easy ways to take care of the “little things” around the house that can help make it easier to sell such as changing out broken cabinet doors or hardware, adding a fresh coat of paint to a few rooms for a nice refresh, or installing new lights and finishes throughout the house.
Hire And Manage Subcontractors
If major repairs are necessary, you may need to have a professional take care of the job for you. When choosing a contractor, make sure they have their professional licenses and a good reputation in the field. Ask for references and check them. It’s also a good idea to get estimates from several contractors so you can find the best deal on the repairs. Just remember that quality should be more important than the cost when completing repairs.
Bring In A General Contractor
If you choose to make extensive repairs and have the money to support it, find a reputable general contractor to manage the entire project for you. They will be able to help you scope the project, hire all the subcontractors and trade skills professionals with the various specialties needed, and work around your schedule to make it all happen. General contractors can simplify the process immensely and typically charge a 15-25 percent premium over the cost of the repairs. Note: not all general contractors are created equal so ask around for referrals!
Tip 5: Decide If Making All The Repairs Is Possible
Even with all the tips listed above, repairing your house for market can still seem like an overwhelming task to handle. If you feel you have the time, money, patience, and expertise to manage and complete all the needed repairs (possibly while you’re living in the house), then we hope these tips serve as a helpful guide for you! However, if you feel like managing all the repairs is not for you then selling your house as-is may be your best option.
I’m Ready To Sell My House—Without The Hassle Of Repairs.
If you have a house that needs repairs and are looking for a way out, we are here to help! No matter what condition your house is in or the damage it has faced, we are interested in buying it from you. We’ve bought houses that needed complete makeovers and even those that needed to be torn down completely.
