Options for selling a house that needs repairs | 3 important questions | How to make the most of your home sale | FAQ
Your home’s condition has a huge impact on the buyers it'll attract and the amount they'll be willing to pay. However, even selling a house in really poor condition doesn't automatically mean having to accept a lowball or sink money you don't have into home improvements before listing.
The price you get for your house — and the amount of work required to sell it — often depends on your market.
"If the market is hot and there is a high demand for homes, it may make sense to sell as is," advises Las Vegas realtor Matiah Ty Fischer. "However, if the market is slow and there is a lot of inventory, it may be necessary to make some repairs to attract potential buyers."
Here's how to get the most out of selling a house that needs work.
⚡ Take the guesswork out of selling your house: Explore a full range of offers from local, regional, and national cash buyers. Plus, get a professional opinion of your home value — with and without repairs. Compare all your options in one easy go, with no added fees or obligation to move forward.
Questions to ask before selling a home that needs repairs
One of the biggest decisions when selling a house that needs work is whether to sell it as is or fix it up before listing. That will depend on the costs of the repairs needed and how much your home is worth in its current state vs. after making repairs.
You'll also need to weigh whether it's worth putting your home on the market or selling directly to a cash buyer. Selling directly to an investor or 'we buy houses' company for cash will usually result in lower offers, but listing with a realtor may take longer and cost you more in home prep and realtor fees.
To determine the best selling strategy, it can help to ask yourself the following questions.
1. How much will repairs cost?
Before undergoing repairs, get quotes from contractors to decide whether the time and money you’ll need to invest is worth it. Knowing the cost of specific projects will help you budget and decide which repairs are realistic.
Repair estimates can also help you determine how much you’d need to sell for to make those repairs worthwhile. If the costs outweigh the potential return, you might want to skip the repairs and sell as-is.
Even if you choose not to complete the repairs, the estimates can help you determine a realistic sale price accounting for any credits you might want to offer buyers in exchange for taking on the repairs themselves.
2. Will repairs boost my home's market value?
Knowing your home’s potential market value — both before and after any updates — can save you from investing in potentially costly and unnecessary repairs later on.
"The key is to understand what home upgrades buyers are willing to pay more for," says Lee Harbaugh, a realtor based in Dallas–Fort Worth.
"Often, I have seen sellers pour money into a property just so they can sell for top dollar. The problem is, those sellers don't always recoup their investment," says Harbaugh. "For example, spending $50,000 on new windows is not going to allow one to sell their home for $50,000 more than if they sold as-is."
A real estate agent will be your best resource for learning what buyers are looking for in your market — including what repairs will have the most impact and which are unlikely to drive up your resale value.
When you consult with a realtor, they'll typically run a comparative market analysis — examining your home and pulling data on the surrounding real estate market to establish a reasonable list price based on similar homes that have sold nearby.
3. Who is my target buyer?
When selling a house that needs repairs, you could potentially attract offers from investors, developers, or traditional buyers who see the home’s post-repair potential.
However, your exact target buyer will typically depend on the extent of repairs needed, the amount of money and work you're willing to put in before listing, and how quickly you need to sell.
"Those accepting as-is homes typically want a deal and plan to renovate, says Jim Olenbush, founder of Austin Real Estate. "Motivated cash buyers are common, along with contractors and fix-and-flip investors."
However, the safety or livability of your home may limit your buyer pool even further.
Roughly 80% of buyers use a mortgage to finance their home purchase, according to data from the National Association of Realtors. Unfortunately, "some home repairs that go unfixed can disqualify buyers from purchasing a home because the loan is not insurable under certain conditions," warns Florida-based realtor Elisha Lopez.
🛠️ Issues that could prevent buyers from getting financing
- Extensive roof damage
- Major structural or foundation issues
- Broken electrical system
- Nonfunctioning HVAC system
- Broken plumbing
- Severe mold or grime in bathrooms, basement, or attic
- Termite damage
If the amount of work needed means that most buyers won't be able to qualify for a loan, you may be looking at selling to an investor.
But if you're in a neighborhood where home prices are appreciating — and you're willing to get the house into decent enough shape that it will qualify for conventional financing — you may have a chance of selling to a traditional buyer willing to take on a renovation to get into their desired neighborhood.
Options for selling a house that needs repairs
When selling a house that needs repairs, you have a couple of options:
- Easiest and fastest: Sell as-is to a cash buyer or a real estate investor
- Potential for highest offers: Put your house on the market
Offloading a property to an investor means you won’t have to put hundreds or thousands of dollars into repairs or figure out how to market a house that needs updating. But it may not earn you the highest profit, since investors typically pay less than market value for homes.
Putting your home on the market could get you a higher sale price, but you'll be on the hook for realtor fees and will need to decide how much money (if any) to invest in readying your home for listing.
Option 1: Sell as is to a cash buyer
Cash buyers include private investors and larger companies that buy houses for cash. They're known for purchasing homes in just about any condition and can typically make an offer within 24–48 hours of connecting with you. Most require no home inspections or appraisals, and can usually close in a couple of weeks.
Brett Johnson, owner of Cash For House Pro, adds that cash buyers "don't demand any repair work. Moreover, many reputable cash buyers refrain from charging fees or commissions and cover all closing costs, rendering the transaction remarkably smooth and cost-free for the seller."
"However," Johnson continues, "it's worth noting that in return for these conveniences, cash buyers often acquire properties below their market value." Since many buyers are looking to renovate and then resell homes, their cash offers need to stay under fair market value to account for the investor's costs.
That said, some investors offer more flexible solutions, such as novation agreements — where they'll essentially come in, make the repairs, and sell the home on your behalf — splitting the profits from the higher sale price with you at closing.
Investors may also pay more for homes that they intend to hold onto as rentals, especially if they're located in a neighborhood with a large tenant population, such as areas around college campuses.
⚡ Compare fair cash offers from trusted investors in our network. Get multiple bids from pre-vetted investors, with no hidden fees or obligation to move forward. Simply tell us about your home, and we'll do all that we can to help you explore your options and get the best possible deal.
Option 2: Put your home on the market
Listing your home through a realtor will expose your property to the largest audience of potential buyers. In competitive markets, even traditional buyers can be open to buying a home that needs work.
Because you’ll be reaching more buyers, you’re more likely to generate competition for your property, which in turn can help you get the best offer.
While you can usually make more money on a listed home if you’ve already invested in repairs, doing so isn’t strictly required. As Donald Olhausen Jr., owner of WeBuyHousesInSanDiego.com, says, "When renovations are not an option, selling your home through a realtor will get you the most money in almost every situation."
The process of selling a home on the open market can take longer and buyers may have difficulty getting approved for financing, especially if your house needs significant repairs. You’ll also need to pay realtor commissions, which typically cost 5–6%, although low commission brokers do charge less while offering the same service.
How to sell a house that needs repairs
Decide which repairs to make before listing
Most home buyers prefer a home with as few issues as possible. So making repairs before listing is generally considered the best way to increase competition and get offers that meet or exceed your expectations.
However, there's no guarantee that you'll get your money back when investing in repairs. It depends on the extent of repairs needed, the value they add to the list price, and the time and capital you have to invest.
In tight markets, repairs can often be skipped without affecting buyer demand. But in slower markets, buyers may expect repairs to be already taken care of — or for the seller to at least offer a credit to cover the cost of fixing them later on.
A realtor can tell you which repairs, if any, make the most sense for your area.
Example 1: Making repairs
Realtor Josiah Carter offers a recent example of a seller who opted to make repairs:
"A home went live yesterday with an initial offer before going on market of $220,000 from an interested buyer. However, the seller chose to invest $12,000 in repairs, including new carpet, cabinets, and a fresh coat of paint. After these improvements, the property was listed for $275,000, in line with comparable sales in the area."
"By choosing to make the repairs," says Carter, "the seller stands to net an additional $43,000—a substantial increase in profit.
Example 2: Selling as is
"I literally just closed a deal last week in which I represented a seller that chose to sell a house in need of repairs as is," realtor Lee Harbaugh told us via email.
"The house needed lots of work — new floors, new kitchen counters and appliances, paint inside and out, new A/C, new water heater, many other things as well. The seller was out of state and felt that trying to manage repairs remotely would be too difficult."
"I basically took what I thought the value of the property would be if it was in great shape and deducted what I estimated the cost of repairing the property to be, and that became our list price. We ended up selling the property to an investment company for about $10,000 under our list price. All in all, we felt good about the deal in the end."
» MORE: The Most Important Repairs to Make Before Selling Your Home
Highlight your home's selling points
Even if you’re selling a house in poor condition, you should help potential buyers see the property’s potential upsides. For example, buyers may initially be wary of buying a house that looks outdated, but those cosmetic issues can seem insignificant if you point out how you’ve recently invested in an expensive new HVAC or electrical system.
Even if you haven’t done any repairs, there may be features of your home that make it attractive to buyers. For example, Asken says, "If the land itself is very unique and valuable because it's right on the beach, or has a spectacular view or a very desirable address, then repairing a roof may not be so important."
In markets where demand is especially high, buyers may be less bothered by homes needing some extra work. Instead, those buyers are going to be impressed by a property’s potential, such as its location close to amenities or the quality of nearby schools.
Prepare a list of repair estimates to support your asking price
Whether you sell as-is or after you’ve renovated, you should get multiple repair estimates and keep them on hand when you list. These repair estimates can be useful during negotiations with buyers.
"Get quotes from multiple contractors for the repairs needed," says Leszczuk. "This will give you a great negotiation tool to counter an offer that comes in below your list price."
Don’t try to hide any known issues
Even if you’re selling as is, you’re still required to disclose any known defects. Dan Belcher, CEO of Short Sale RE, emphasizes the point by saying, "Disclose, disclose, disclose so buyers aren't surprised. Good communication and reasonable expectations are essential whether you sell as-is or renovated."
Disclosing defects is not only the law in most states, but it can help prevent deals from falling through. For example, many buyers will insist on an inspection contingency. If that inspection uncovers a significant problem, then the deal is at risk of failing or you may have to settle for a lower price. By disclosing defects and providing inspection reports, you increase the chances of a successful sale.
Use concessions and credits to attract buyers
Offering closing credits or concessions can be a great way to reduce some of the anxieties buyers have about major repairs. For example, by mentioning in your listing that you’re including a closing credit for a new furnace, you’ll likely attract more buyers who would otherwise be hesitant about buying a home in need of such a significant investment.
Asken also points out that "a credit can be beneficial for a buyer because they can then go hire the vendor of their choice to complete the work." Giving buyers this extra bit of control over repairs instead of doing them yourself can make your property even more enticing.
Get competing offers when selling to a cash buyer
You should get offers from multiple cash buyers since offer amounts can vary widely. Some investors use the so-called 70% rule — meaning they'll cap their offers at 70% of your home’s resale value minus repairs. However, many investors told us they either don’t follow the 70% rule or only use it as a very rough baseline.
"The notion that investors typically won't pay more than 70% of a home's after-repair value (ARV) is a general guideline," says real estate expert Chris McGuire. "However, it can vary depending on the investor's investment strategy, the specific market conditions, and the property's unique characteristics."
Since each cash buyer has their own strategy for investing in properties, the actual offers you get can vary, sometimes dramatically. By getting multiple offers, you’ll increase the chances of getting a fair price for your house.
One option is to use a service like Clever Offers, which will solicit offers from multiple cash buyers on your behalf and then present you with the best ones. Using this type of service saves you the hassle of researching and vetting cash buyers on your own, and ensures you’re more likely to get a deal that works for you.
Partner with an experienced agent when listing as is
Before listing a house that needs repairs, you should find a real estate agent who knows your local market. "They might just save you lots of time and money and headaches!" says realtor Lee Harbaugh.
In addition to advising on which repairs offer the highest return on their investment, a good realtor will be able to offer you advice on how to appeal to the right buyers — whether you're targeting investors or homeowners.
"Anyone can list a home for a lower price, but an experienced listing agent will have a pool of waiting buyers to pull from," says realtor Elisha Lopez. If investors and buyers are looking for a home in a certain neighborhood, they might be willing to pay top dollar no matter what the condition of the house is."
"A new listing agent who doesn’t have a pool of buyers waiting could compare the home to other homes in the same condition that recently sold and lower the sale price by 10-20%," she warns.
While traditional realtors can be expensive — with listing fees costing around 3% on average — you can save money by using a discount brokerage. Many discount brokerages offer the same high-quality agents as traditional brokerages, but for as low as half the rate.
» MORE: Where to Find the Top Low Commission Realtors
Bottom line: You can still sell your house even if it needs work
Just about any house, including one in need of repairs, can find a buyer so long as the price is right. Whether you choose to sell to a cash buyer or list on the open market will depend on how fast you want to sell and for how much.
To decide which option is best for you, remember to ask yourself how much your home is worth, how much it would cost to repair, and what kind of buyers you’re trying to target. The answers to these questions will determine whether you should invest in repairs or try to sell as-is.
Whichever path you choose, you’ll want to compare all your options. Talk to an agent to find out what your home could sell for on the open market. And if you’re considering selling to a cash buyer, get multiple offers and compare them to your home’s market value to ensure you’re getting a fair deal.
⚡ Compare fair cash offers to the sale price you'd get with an agent — no hassles, fees, or commitment
Related reading
Selling a House in Poor Condition: How to Do It. If your home's in poor condition, you may still be able to sell it – even if it's dilapidated or uninhabitable.
How Much Do You Lose By Selling a House As-is? You could lose a lot or a little by selling your home in as-is condition. Learn more about the factors impacting your sale proceeds, and how to save money.
How Can I Sell My House Fast Without Losing Money? While it takes an average of two to three months to sell a home, you can speed up the process without sacrificing profit. Learn how here.
FAQ about selling a house that needs repairs
Is it hard to sell a house that needs serious repairs?
Sometimes. If your home needs serious repairs, you have a few options on how to sell. If you want to sell quickly and without repairs, cash buyers will make offers and let you close within weeks. Selling your home as-is on the open market also helps you avoid making repairs, but it can be hard to find suitable buyers.
Should I fix up my house or sell it as is?
It depends on the home and your needs. If you need to sell quickly and arent worried about maximizing your homes sale price, you can sell it as-is at a discounted price. You can also make the necessary repairs before selling on the open market, but you should determine your homes value and the cost of those repairs firsthand.
How do you list an old house that needs work?
There are three ways to sell a home that needs repairs: You can sell as-is to a cash buyer, usually for a low price. You can sell as-is on the open market, which may take time and produce low offers. Or you can repair and update the home before listing it on the open market. Learn more about your selling options.
How can I determine my home's as-is value?
Consult a real estate agent, who can provide you with a comparative market analysis (CMA) to help determine your homes as-is value on the open market. A realtor can also tell you how much your home may be worth both with and without repairs. Alternatively, you can seek cash offers from investors, although these may be less than market value.