So, you’ve decided to sell your house and now you’re considering whether or not you should sell it as it is, or invest in repairs. There are a number of factors, including your home’s current condition and the housing market that come into play when making this decision.
An investment means gaining more income in the long run, so investing on repairs is always a good idea and will increase your home’s market value, but you don’t HAVE to repair everything. They’re not all good investments – there could be some repairs that are just a waste of resources.
Things to consider:
A lot of sellers usually put way too much towards fixing up their homes before having them listed. Your buyers are not going to see every little flaw in your home. They’re more likely to not even notice them at all. So, it would be beneficial for you to factor what takes priority and decide accordingly what you should and should put money towards.
State of the Nation– uhm, Real Estate Market
When your realtor says that the real estate market is hot, it means that homes are selling like hotcakes, and are getting multiple offers and even bidding wars. This is also called the seller’s market. So, when the market is hot, it’s easy to get away with fewer fixes before selling. But, don’t even think about skipping it altogether because a home with fewer fixes will still deliver a lower price.
Condition of the competing homes
We’re sure you have encountered the abbreviation “CMA” at least once while looking into real estate. A CMA or a comparative market analysis offers an overview of recently sold homes in your area. Your agent would be able to get hold of a CMA of your neighborhood to help you get a sense of whether your home offers more or less than the other homes situated in your area.
Bring back ROI
There are repairs and home improvements that would be more likely to benefit you more than others. This means that there are renovations that would increase your home’s market value more than other repairs. For example, a minor kitchen remodel can add more than $15,000 to your home’s value, but replacing a garage door would only increase your value over $3,000. It would be advantageous to have this insight, so the best thing you can do to assure this is to talk to your Landon Pacific realtor before making any repairs.
Part 2: Your Home As Is
If the cost of your repair would be higher than your home’s selling price when you put it up on market even after the renovations, then it wouldn’t make sense to proceed knowing that you’ll end up with less money than you started with.
Let’s say that the property in question is in need of a lot of repairs. I mean – A LOT. Just shy over being run down and seeming like it has been abandoned for a while. Economically, this is not a home that can be easily fixed per say. Because let’s face it, a coat of paint is not going to help. So, in cases like this, the best route is to just decrease the price of your property competitively enough to be able to receive multiple offers. It can still be considered a good target investment for contractors, investors, and house flippers.
Are homebuyers looking for fixer-uppers?
Well, the answer is, it depends on the buyer. Some may want to put in that extra work, some may not. It’s all a matter of those interested in making that investment finding you. Those who do want fixer-uppers are generally looking for properties that require only light cosmetic repairs and they’re usually those who aren’t qualified to buy a more expensive home, or looking to make a profit by fixing the home themselves.
Let’s look at the numbers:
Buyers looking for fixer-uppers will inevitably want a discount from the price of the home to allow for the repairs, and then demand a bit more for the inconvenience.
For example, let’s say that the home would be worth $100,000 if it had a new roof. The repair would cost around $10,000. However, a buyer would most likely NOT offer $90,000 for the home as they would be able to purchase an identical property with a new roof for the same price and save themselves from the hassle.
The offer a buyer would make for a home like that would be around $75,000 or even less. You would be better off paying for a new roof and then selling your property for $100,000 in this scenario.
It’s beneficial for a seller to realize that few buyers will be looking forward to buying a home that needs a new roof. They worry that the work that comes along with it will cost more than what they initially thought and subsequently most buyers prefer a home that’s in move-in condition.
Before fixing up your home
In order to get the best price possible for your home, you have to be a smart seller. Meaning that you will have to weigh the cost of the proposed improvements against the home’s market value after the repairs or upgrades are completed. Before you decide to lift the roof and install skylights in the master suite, think back and realize that kitchen and bathroom renovations carry the highest return.
Here’s a short list of improvements you can more on your home with high ROI:
- Adding a deck
- Replacing windows
- Replacing sliding with fiber-cement or vinyl
- Swapping in a steel front door.
It’ll do you good to make time and tour other for sale homes in the neighborhood with your Landon Pacific realtor to help you note the condition and amenities in those homes. These homes are your competition.
Although, this doesn’t mean that you would have to buy designer appliances to one-up your neighbors. The goal is to make minor renovations that would give you the highest returns.
Repairs That Will MATTER
Before going through with the repairs, make a list of everything that’s either defective, broken, or worn out. Things like that will heavily affect your buyer’s decision if pursuing the sale. The anxiety that would be brought about by the constant thought that something else might be broken is not an appealing selling point.
Here are some more improvements to consider before selling your home:
- Patching holes and cracks on the walls and ceilings
- Fixing broken appliances
- Repair HVAC systems
- Repair leaky faucets
- Replace broken window glasses
- Repair roof (if necessary)
- Change dated light fixture or ceiling fans
- Fix code violations
- Replace worn or stained carpeting
- Repaint dark or marred walls with neutral paint – not white
- Replace old draped and window coverings
- Upgrade furnitures that are in bad shape for the showing
Selling your home as it is is more of a gamble than it is a smart investment move. Before you decide on it, make sure to learn as much as you can about the housing market and other homes for sale in your area, and then consider which home repairs are most likely to give you the highest return on your investment.
Source blog: https://www.thebalance.com/should-i-fix-up-my-home-or-try-to-sell-as-is-1798973