- If your home is in poor condition, your best options are: making repairs, listing your home for sale as is, or selling to a real estate investor or cash buyer.
- Fixing up your home can drastically increase its sale price, so it’s usually the best choice if you can commit the necessary time and money to repairs.
- If repairs aren’t an option, listing as is or selling to a real estate investor are going to be your best bets — but your sale price will be lower as a result.
If you’re planning to sell a home in poor condition, there’s no one-size-fits-all solution. But there’s some good news too: You have plenty of options to consider.
Before committing to a course of action, it’s crucial to consider three factors:
- How bad your home’s condition is
- How quickly you need to sell
- Your financial goals
Overall, homeowners who can afford to make repairs before listing their homes will generally net the most profit. But there are also options available for those who need to sell fast or who don’t want to make repairs.
If you’re feeling overwhelmed — or just want an expert’s opinion — our friends at Clever can introduce you to a top rated real estate who has experience selling homes in poor condition in your area.
Selling “as is” can cut upfront costs — but you’ll usually sell for less
Many homeowners whose property is in poor condition decide to sell in “as is” condition. This means that the buyer will agree to purchase the home without any repairs or repair contingencies.
An as is sale can drastically reduce the stress involved with selling a home in poor condition. You won’t have to spend thousands of dollars on repairs — or wait for months while contractors chip away at your to-do list.
However, this convenience comes at a price. Buyers who are willing to purchase a home as is expect bargain pricing since they are agreeing to take on all of the repairs themselves.
Listing as is with a real estate agent
Even if you’re planning to sell your home as is, listing on the open market is usually the best option.
An experienced real estate agent will know how to market your home in the best light — and if multiple buyers are interested, you could end up selling for more than your asking price.
This can be especially tricky in as is sales because traditional lenders will only extend financing on homes that meet their standards. If your home doesn’t pass muster in its current condition — for example, if it lacks a sound foundation or a functional HVAC system — an agent may be able to help you find a more specialized buyer.
Selling to a cash buyer or real estate investor
Cash buyers and real estate investors are always on the lookout for great deals — including purchasing homes as is.
These specialized buyers typically purchase homes in poor condition with the goal of flipping them, then selling them for a higher profit. Because they’re prepared to fully renovate a home to their specifications, they don’t require homes to be in top condition.
Cash buyers and real estate investors often have access to non-traditional financing, so they won’t necessarily have to work with a typical lender. As a result, they’re sometimes able to close in as little as two weeks.
However, cash buyers and real estate investors also want to spend as little as possible when acquiring a home — so know what your home is realistically worth and be prepared to field low offers.
Selling your home to an iBuyer
iBuyers are companies that make instant cash offers on homes that meet their specifications. You won’t have to make any repairs or preparations to sell your home, and they can typically close within 10 days.
Unlike cash buyers or investors, iBuyers can often offer much closer to fair market value for your home.
But this convenience does come with a few tradeoffs. First, iBuyers only purchase homes that are in reasonably good condition — so if your home is uninhabitable, it likely won’t qualify.
Additionally, most iBuyers require the seller to agree to a list of necessary repairs. Although you won’t have to pay for the repairs up front, the costs will be deducted from your proceeds at closing.
Most iBuyers can evaluate your property within 24-48 hours, so it’s usually worthwhile to submit your information to any iBuyer companies in your area. Best of all, it’s free to get a no-obligation offer from an iBuyer like Opendoor.
Should I make repairs before selling?
The truth is: it depends.
We spoke with experienced real estate agents who help their clients weigh the pros and cons of investing in repairs. They agreed that the best repair option will depend on a number of factors, including what’s standard in your neighborhood.
In general, repairs can be worthwhile when they bring your home up to the standards buyers expect in your area. For example, if every comparable listing has a kitchen that’s been updated in the past five years and yours dates back to the 1970s, an upgrade may help you compete.
If your home is uninhabitable in its current condition — for example, if it has a cracked foundation or faulty plumbing — a typical buyer may not be able to secure financing to buy it. These major repairs come with a hefty price tag, but they can dramatically expand the pool of potential buyers.
Hypothetical scenarios aside, your budget will ultimately dictate which repairs you can actually afford to complete before attempting to sell your home.
Our friends at Clever have built a nationwide network of local real estate experts who can offer advice about what repairs are worth it, how to make the most of your repair budget, and what to do if you need to sell your home in as is condition.
If you can afford to set aside a few hundred dollars, minor cosmetic repairs to your home could be a relatively easy and a low-cost way to boost its value.
|Minor repairs are quick and easy to complete||Minor repairs may not lead to a higher profit|
|You can usually complete minor repairs yourself||You’ll have to pay for materials and invest some effort|
Advantages to making minor repairs
You can save money by making minor repairs yourself
If you don’t have to pay professionals to complete minor repairs, you can save hundreds or even thousands of dollars.
With the help of YouTube (or pros at the local hardware store), most people can handle minor repairs such as:
- Repainting your home’s interior and/or exterior
- Replacing old faucets
- Replacing lighting fixtures
- Refinishing kitchen or bathroom cabinets
These minor repairs can help boost the value and presentation of your home, are relatively easy to complete, and generally only cost a few hundred dollars.
You can finish minor repairs quickly
Minor repairs can typically be completed in a week or less — unlike major repairs that could require weeks or months. This means you can usually knock out minor repairs without investing too much time or delaying your listing timeline.
Disadvantages to making minor repairs
There’s no guarantee for return on investment
While making minor repairs can help make your home more attractive to buyers — which may lead to a quicker sale or more offers — there’s still no guarantee that you’ll earn more from the sale than you invested in minor repairs.
In some cases, the key benefit of minor repairs is that they can bring your home in line with buyers’ expectations and standards. In other words, buyers may consider minor repairs more of a necessity than an upgrade.
Minor repairs still cost money
Although most minor repairs are substantially cheaper than major repairs, the truth is that they still cost money. It’s important to be realistic about what you can afford to spend and stick to your budget. Otherwise, you could end up spending more than you initially expected.
Major repairs can cost thousands of dollars and take weeks or months to complete — so we recommend talking to a local real estate professional before investing. They can help you understand which major repairs will increase your home’s value and how much they might expand your pool of potential buyers.
|Bringing your home up to local standards will boost your property value||Big ticket repairs can cost thousands of dollars|
|A fully updated property will attract a broader cross-section of buyers||Substantial repairs could add months to your timeline|
Advantages of making major repairs
Major repairs can boost your property value
Major repairs are expensive — but they can also raise your property’s value substantially. These types of repairs involve bringing your home up to standards by fixing:
- Foundation issues
- Mold problems
- An old roof
- HVAC inefficiencies
- Electrical wiring
You may not get an exact return on investment for major repairs, but bringing your home up to market standards will allow you to list it at fair market value and potentially sell faster.
Completing major repairs can attract more buyers
Investing in major repairs can expand the pool of buyers who may make offers on your home.
Before lenders extend financing to a home buyer, they make sure that the home meets their standards. If your home is in very poor condition, buyers might struggle to access the funds to purchase it.
If your home’s major systems and components are newly repaired and functioning — rather than in disrepair — lenders will be much more likely to approve financing to buyers who are interested in your home.
Disadvantages of making major repairs
You’ll spend a substantial amount of time and money
There’s no way around it; major repairs can take months to complete and easily cost thousands of dollars.
To offer a ballpark estimate, many major repairs can quickly skyrocket to upwards of $25,000 — though there’s no set number, and the exact amount will depend on your home’s condition.
Although there are benefits to completing major repairs, it’s also important to weigh whether it’s worth it for you. If major repairs are completely outside your budget, you still have options, such as selling as is, working with a cash buyer, or selling to an iBuyer.
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