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What to do if you house is uninhabitable | What to do if your home needs repairs | What to do if you home needs minor or cosmetic updates | FAQ
Selling a home in poor condition isn’t always easy, but it can be done. Your home’s actual condition, the state of the local market, and the potential buyers in your area will all determine how quickly you sell — and for how much.
We asked top real estate professionals from across the U.S. for their advice on how to get the best price for your home, no matter its condition. From selling to a cash buyer or iBuyer, to choosing a realtor who can sell your house fast, here are the best strategies for selling a home in poor condition, whether it’s a complete teardown or just in need of some updating.
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What makes a home’s condition ‘poor’?
Homes in poor condition fall into three broad categories:
- Uninhabitable: Homes that are dangerous to live in and need extensive renovations or to be rebuilt.
- In need of repairs: Homes that are habitable, but have defects that are costly to fix and, if left unaddressed, could become dangerous.
- In need of cosmetic updates: Homes that may be outdated or require some cleaning and touchups, but are otherwise in good condition.
The market will determine how much homes in poor condition sell for and whether it’s worth investing in repairs before you list. In tight markets, homes in poor condition can sell for excellent prices. But in more balanced or slower markets, investing in repairs can get you more offers and a higher sale price.
What to do if your house is uninhabitable
Uninhabitable properties are those that are too dangerous to live in. Uninhabitable homes either need major renovation work or have to be demolished and rebuilt. Many issues can make a home uninhabitable, but some of the most common are:
- Severely damaged roof
- Major foundational issues
- Significant plumbing problems
- Pest infestation
- Biohazards (i.e., black mold, lead, or asbestos)
- Fire or smoke damage
- Flooding
- Faulty electrical wiring
Financing can be a problem for buyers considering an uninhabitable home. Government-backed loans, such as FHA and VA loans, typically require the home to be habitable.
Even standard mortgages are rare for uninhabitable properties because the house acts as collateral for the loan. Hypothetically speaking, if a buyer was approved for a mortgage on a teardown, but then defaulted after the house was demolished, the lender wouldn’t have any collateral that it could sell in order to make back the loan.
Because of these financing issues, uninhabitable homes are usually bought by cash home buyers, such as private investors and “we buy houses” companies. While some buyers looking for a home to live in may consider an uninhabitable house, this usually only happens in extremely tight markets where housing inventory is low.
Options for selling an uninhabitable home
The potential buyers for an uninhabitable house are limited, but you can usually find at least one buyer so long as your property is priced right. Investors and “we buy houses” companies who specialize in homes in especially poor condition are likely your best option.
Cash buyers are looking for investment opportunities. For those open to uninhabitable homes, they’re going to consider the time and money it’ll take to renovate or rebuild and whether there’s enough demand in the local market to either resell the home or rent it out.
Benefits of selling to a cash buyer
Cash buyers can close extremely fast. Nick Foley, owner of Hoarded Property Solutions, which specializes in buying distressed properties, says, “For my team and I, it’s all about time. Time to close, repair/remodel, and find a buyer. For example, if a seller is hesitant or is not willing to meet my 10-day closing window, I will adjust my offer to reflect the delay.”
Cash buyers will also generally cover closing costs and you don’t need a realtor to sell to one (although you can use one, if you prefer). Because of that, you can keep your overall selling costs low.
Downsides of selling to a cash buyer
Because there’s a lot of risk involved with buying an uninhabitable home, most cash buyers offer low — often no more than 70% of fair market value, minus repairs. Since the repair estimate can be especially high for uninhabitable homes, you should expect even lower, possibly around 50%.
You’ll also need to do your due diligence when researching cash buyers. While most cash buyers are honest, there are some bad actors. As investor Bart Waldon, managing partner at Land Boss, says, “I suggest sellers look for transparent investors who provide reasonable offers, time for inspections, and don’t pressure overnight decisions. Take time to weigh all options before accepting an offer.”
How to get a fair price
Selling your uninhabitable house for a fair price is quite different from selling a list-ready home or even a habitable house with significant defects. Here’s how to maximize your profit.
Talk to a realtor
You should consult with a realtor in order to learn what your property could get on the open market. A realtor will run a comparative market analysis (CMA) to estimate your home’s market value both in its present condition and after any repair work has been completed. You can then use that information to decide if the cost of such repair work makes sense for your finances.
Getting a comparative market analysis from a realtor is typically free and comes with no obligation. If you sell to a cash buyer, you’re also free to use a realtor, but you’ll have to pay commission. Alternatively, having an attorney or CPA review your contract instead may be cheaper.
⚡ See what different realtors think your home could be worth as is. Use our top-rated agent matching tool to connect with some of the best agents in your area, including highly rated local realtors from major brands like Keller Williams and RE/MAX. Get multiple agent proposals sent to your inbox, compare their assessments of your home value and best selling strategy, and get a 1.5% listing fee if you decide to list — with no added fees or pressure to commit.
Determine if repairs are worthwhile
Investing in repairs, especially for issues that aren’t the main cause of why the home is dangerous, often doesn’t make sense. Cash buyers are not going to be impressed by new windows or doors, for example, when the home is suffering from a severely damaged roof and may need to be demolished.
If you can afford to fix the main issue that is making the home dangerous to live in, you may want to consider doing so. But the cost to do this may be more than how much it’ll add to your home’s market value, in which case it makes more sense to sell as-is.
Get quotes from contractors
Talk to contractors to learn how much it’ll cost to fix whatever issues are making your home uninhabitable. Again, once you know the cost of repairs, you can decide if it makes sense to sell as-is or to invest in making the home habitable.
Even if you decide to not hire a contractor, having quotes will give you leverage later on when negotiating with cash buyers. By knowing how much money needs to be invested in the property, you can push back against any buyer who may try to inflate the cost of repairs in order to drive down the final sale price.
Get multiple offers
Get offers from multiple cash buyers. It’s free to do so and you’re under no obligation to accept any offer. Having multiple offers on hand makes it easy to compare and decide which one is right for you.
You can find cash buyers yourself, but remember to verify each one by reading online reviews and talking to past customers. A less time consuming option is to use a service like Clever Offers or HomeLight Simple Sale, which will reach out to reputable cash buyers on your behalf and send you multiple offers to review.
What to do if your home needs repairs
Homes that need repairs can usually still be lived in, but they’ll have trouble finding buyers and may be expensive to get list-ready. Some of the most common issues that require repairs are:
- Flooring needing replacement
- Minor foundation issues
- Electrical issues
- Plumbing problems
- Damaged roof
- HVAC issues
- Hoarding and clutter
- Broken windows and doors
Financing a home in need of costly improvements is sometimes possible, but it’ll depend on your home’s condition and the buyer’s situation. FHA and VA loans will be especially difficult due to their strict requirements. However, some lenders may be open to offering standard mortgages to buyers, so long as there’s a plan to fix the home’s defects.
Cash buyers are also an option with homes needing significant repairs. Again, the interest you get from cash buyers will depend on the actual condition of your home and the time and expense of renovating it.
Options for selling a home that needs repairs
Your buyer pool for a home in need of major repairs is larger than what an uninhabitable house would get, but still somewhat limited. You should still be able to sell for a decent price, especially if you’re in a competitive market.
You could potentially get offers from traditional buyers who are looking for a bargain. In fact, recent research shows that 65% of Millennials are open to buying a fixer-upper. That said, local investors and “we buy houses” companies, will still likely be your most likely buyer.
Benefits of cash buyers vs. bargain hunters
Investors and “we buy houses” companies are able to close quickly, often in less than two weeks. You also don’t always need a realtor when selling to a cash buyer, so there are no realtor commissions, and cash buyers will generally cover the closing costs. Offers from cash buyers are also less likely to fall through because of financing problems.
But bargain hunters who are looking to actually live in the property may be willing to offer more money. Because they’re looking for a home, cutting costs in order to flip the property is less of a concern. If they have a strong vision for the property, or it’s in their desired location, they may be willing to offer substantially more than cash buyers.
Downsides of cash buyers vs. bargain hunters
Investors are more likely to offer a lower sale price since they need to keep costs low in order to eventually flip the property or rent it out. Many investors offer 70% of fair market value, minus repairs, although long-term investors may offer closer to 85%. Some investors may also apply strong-arm sales tactics to get you to agree to a low offer.
Bargain hunters may try to negotiate improvements to your home before buying or request a buyer credit. You’ll have to weigh the potential return on any investment requested with what the buyer is offering. Also, if the buyer needs a mortgage, there is a higher risk of the deal falling through.
Should you make the repairs upfront or sell as is?
Whether or not you make the repairs upfront or sell as-is depends on many factors, including local market conditions and your ability to invest in repairs. Most importantly, you’ll need to determine whether any repairs are likely to increase the sale price enough so that you don’t lose money on them.
In competitive markets, you might be able to skip the repairs while still getting a good sale price. But if you live in a slower market, repairs will attract a larger pool of buyers. However, if you don’t have the time or money to invest in them, you can sell as-is, although that will mean you’ll get a smaller pool of buyers.
Alternatively, Tamar Asken, founder of Parasol Realty Group, points out that “A seller is required to disclose known defects, and when a seller knows of a problem, they can choose to offer the buyer a credit for that repair upfront.” The advantage of a buyer credit is that it reassures buyers while not requiring the seller to pay any upfront costs for the repairs.
When doing repairs, choose ones that will get you the most return on your investment. Martin Orefice, CEO of Rent to Own Atlanta, says, “If you’re just an ordinary homeowner who wants to maximize the value of their home, focus on essential improvements first and foremost. An outdated, but functional, kitchen is much lower priority than fixing a leaky roof, for example.”
Don’t sink money into costly improvements that have a low ROI. Here are the national average costs for some of the most common major repairs:
Project | Average cost | ROI |
Garage door replacement | $4,302 | 102.7% |
Steel front door replacement | $2,214 | 100.9% |
Vinyl siding replacement | $16,348 | 94.7% |
Fiber-cement siding replacement | $19,361 | 88.5% |
Vinyl window replacement | $20,091 | 68.5% |
Wood window replacement | $24,376 | 61.2% |
Asphalt roof replacement | $29,136 | 61.1% |
Metal roof replacement | $47,414 | 48.9% |
Source: Zonda Media. “2023 COST VS VALUE REPORT.” Accessed 1 February 2024 |
These figures are estimates, and costs and ROI vary significantly by market. You should talk consult a local listing agent about which repairs are most in demand. Get quotes from contractors to see if the potential increase in your home’s value justifies the expense.
Keep in mind who your most likely buyer is. Investors, for example, are more open to properties with major defects. Many investors also have a team of contractors, which allows them to complete major repairs cheaper and faster than the average customer.
For buyers who want their own home and are open to some DIY, taking care of minor improvements may be worthwhile. Cynthia Cummins, realtor and founder of Kindred SF Homes, says, “I think the only repairs that should be made are ones that are required by law, or which create a poor first impression. Otherwise, it’s better to simply disclose any defects and emphasize the cosmetic with paint, floors, lighting and staging!.”
How to get a fair price
Here are some steps to get a fair price on a home in need of major repairs.
Get quotes from contractors
Again, talk to contractors to learn how much repairs will cost. Even if the price is too high or you don’t have time to complete them, knowing the cost will come in handy later on. For example, you can use the estimated repair costs to determine how what kinds of repair credits you may need to offer at close or whether certain projects are worth the increase in home value.
Find out your home’s market value
Talk to a real estate agent to find out what your home could fetch on the open market, both before and after repairs. The only way you can know if repairs are worth the investment is if you know how much buyers are willing to pay for your house, both with and without them. Getting an estimate from a real estate agent is free and comes with no obligation to list.
Market your home to the right buyers
Since your house might not be move-in ready, you’ll need to find ways to appeal to the right buyers, which will likely be investors or bargain hunters looking for a DIY project. For these types of buyers, seeing the potential in a property is most important.
For example, Toronto realtor Barry Lebow had a client whose house was in poor condition. Instead of fixing it up, Lebow says he “had a professional flier designed and posted all over social media. The heading was, ‘This House is a Disaster!” The ad then continued, ‘but it is incredible value for someone with vision and who wants to renovate to their own tastes.’”
Disclose all known defects
Even if you’re selling your house as-is, you’re still required to disclose any known defects. This is usually done by filling out a seller disclosure form. You can find your state’s seller disclosure form through a simple Google search.
Failing to disclose known defects is more risk than it’s worth. If the buyer discovers a defect during the inspection, they can walk out of the contract or demand it be renegotiated. Similarly, if the buyer discovers a defect after they’ve purchased the property that the seller knew but didn’t disclose, then the seller could be held liable for the cost of repairing it.
Be prepared to negotiate
Major repairs can factor into negotiations in a big way. While cash buyers are more firm in what they’re willing to pay, a bargain buyer who’s planning on making the property their new home may be more flexible.
These types of buyers are more likely to want control over how repairs and renovations are handled, so they may be more open to a buyer credit. As Asken says, “A credit can be beneficial for a buyer because they can then go hire the vendor of their choice to complete the work.”
What to do if your home needs cosmetic improvements
Homes that need cosmetic improvements don’t have anything that makes them unsuitable for living in. They just need some repairs and renovations to address normal wear and tear or to keep them up to date. Common issues for these types of properties include:
- Outdated kitchen
- Outdated bathroom
- Dirt and clutter
- Worn flooring or carpet
- Unattractive paint jobs
- Stained, scratched, or marked up walls
- Old, but functioning appliances
- Poorly maintained landscaping
Financing won’t be a problem for these types of homes, but your pool of potential buyers will still be smaller than a home that’s been recently renovated and looks brand new. Even minor issues can end up leaving you with fewer offers.
As Sharlys Leszczuk, broker at Windermere West LLC, says, “Something as simple as weird paint or carpet colors could prevent a buyer looking for something move-in ready from placing an offer on your home.” But she also notes that in markets where inventory is low, buyers are often willing to look beyond minor issues.
Investors and iBuyers are another pool of potential buyers for homes needing cosmetic repairs. Because these types of homes involve less risk than homes in need of major repairs, most investors will at least consider them, so long as market conditions are right.
You’ll need to decide before you sell whether or not to invest in repairs. The decision to do so will depend on what repairs are needed, what buyers are looking for, and how much time and money you have.
Options for selling a home that need cosmetic improvements
Homes needing only cosmetic improvements can attract the largest pool of buyers, depending on the competition in your market and if you want to invest in repairs before listing. You’ll have to decide whether you want to get the maximum price for your home or if you’d rather avoid the hassle of repairs and sell quickly.
List on the open market
Listing on the open market with a real estate agent is your best chance of getting the most money for your home. You can list your home as-is or invest in repairs beforehand. Obviously, the fewer repairs your home requires when it’s listed, the more buyers it’s going to attract, which will increase its sale price.
But you’ll need to ensure the higher sale price justifies the expense of the repairs. While some cosmetic repairs are cheap — such as putting on a fresh coat of paint — others, like a kitchen remodel, can set you back tens of thousands of dollars. Your realtor can help you decide which, if any, repairs are worth the investment.
The downside of listing on the open market is that you’ll be competing with homes in good condition, which means it could take longer for yours to sell. Buyers looking for move-in ready homes may also be reluctant to take on a home requiring even modest work, especially if you’re in a slower market.
You’ll also need to pay realtor commission when you close, which is traditionally around 3% for the listing agent (plus another 3% for the buyer’s agent). However, you can cut the listing agent expense dramatically by finding a low commission realtor.
Sell to an iBuyer
iBuyers are large companies, most notably Opendoor and Offerpad, that make cash offers on homes. Unlike regular cash buyers, iBuyers only purchase homes in fairly good condition and in major cities.
If you have a home that only needs cosmetic repairs — and you live in an area where iBuyers operate — then selling to one could be a good option. iBuyers can close in less than two weeks and you won’t have to worry about repairs or showings.
iBuyers don’t pay fair market value, but in some markets they’re still better than what an investor or “we buy houses” company might offer.
However, iBuyers do charge service fees, usually around 5%. You’ll also need to watch out for your final offer being substantially lower than the preliminary one, which is often the result of high repair estimates. These fees and estimates can substantially lower your proceeds from the sale.
Do a novation agreement with an investor
Investors generally only offer around 70% of a home’s market value, minus repairs. However, some investors are open to more out-of-the-box solutions, especially on homes that need only cosmetic repairs.
Novation agreements, for example, are one creative solution for sellers who don’t want to invest in repairs upfront, but want to reap the benefits of selling a renovated home on the open market.
With a novation agreement, the investor doesn’t buy the property outright. Instead, they fix it up and then resell it on the open market. The investor and the seller then split the profits, while the investor keeps their previously agreed upon price.
Mike Bennett, operations manager at Clever Offers, says that novation agreements are best for somebody who has “the extra time to sell, they want the convenience of a cash sale, but they don’t want to deal with agents. They don’t want to do showings. They don’t want to deal with negotiations.”
While novation agreements take longer than simply selling to a cash buyer directly, they can be a way to avoid the hassles of a traditional listing while still getting a higher sale price through the open market.
Cash offer networks like Clever Offers are a good place to look for investors who offer novation agreements and other creative solutions. When you request a cash offer, their team takes time to understand what your priorities are and then reaches out to vetted investors who may be the best fit. You can then compare offers in your inbox without having to commit to any offer or pay any extra fees.
How to get a fair price
Getting a fair price for a home needing cosmetic repairs requires taking into account multiple factors, including your local market and the specific repairs your home needs. Here are some tips to get a fair price.
Consult with a realtor
Your first step should be to talk to a realtor. They’ll have the best knowledge of the local market and they can show you how much your home would be worth if listed. You’ll then know how much your home could get on the open market, both with and without repairs.
Realtors also know what features buyers are looking for in homes, which can help you determine which repairs are worth undertaking. Plus, realtors often have networks of local buyers who are eager to take on a DIY project and may be open to buying a house that requires some renovations.
⚡ See what top local realtors suggest for your house. Use our top-rated agent matching tool to connect with agents at the best discount brokerages, plus highly rated local realtors from major brands like Keller Williams and RE/MAX. Get multiple agent proposals sent to your inbox, compare their suggestions for selling and pricing your home, and get a 1.5% listing fee if you decide to sell — with no added fees or pressure to commit.
Choose repairs with the best ROI
Not all repairs, even cosmetic ones, are created equal. Some can be extremely expensive but provide a low return on investment, such as a remodeled bathroom, while cheap fixes for minor issues can dramatically increase your pool of buyers.
While every market is different, you’ll often be better off tackling low-cost, high-impact improvements and letting the buyer take care of bigger ticket items. As Jave Blackburn, CEO of WeBuyAnyHouseAsIs, says, “If opting for repairs, focus on minor yet impactful improvements like painting or fixing obvious defects. Over-investing in major renovations often doesn’t yield proportional returns.”
Disclose known defects
As with any house sale, you’ll need to disclose all known defects with the property upfront. While you don’t need to disclose every dent and scratch on the walls, important issues will need to be disclosed.
By disclosing defects in your listing, you’ll attract buyers who are prepared to take on a bit of repair work themselves. You’ll also exclude buyers who are looking for homes that require absolutely no work and who might be turned off by homes that need even minor improvements.
Be prepared to negotiate
Being open to negotiating will help you get the offer you’re looking for. Many buyers will be looking to negotiate at least part of the offer as they’re aware the house being sold isn’t in perfect condition.
Sammy Lyon, associate broker at Dow Capital, says, “My advice is to disclose the known issues, let the new buyer do their own due diligence, and be prepared to give a credit for any major repairs.”
By being willing to offer a buyer’s credit either upfront or during negotiations, you reassure the buyer that they’ll be able to tackle any necessary repairs. That can help prevent the deal from falling through because of buyers being concerned about needing to make improvements after they move in.
FAQs
Can I sell my house even if it's in terrible condition?
Yes. Cash buyers and local real estate investors generally prefer to buy homes needing repairs. Making improvements is how they add value and turn a profit. However, cash buyers purchase homes at a discounted price to account for the cost of repairs and the time it takes to fix it up and resell it. Learn how to sell a dilapidated home or one that requires major repairs.
Do you lose a lot of money by selling a house in as-is condition?
You might lose a lot or a little by selling in as-is condition, depending on the condition of your home, local market conditions, who the buyer is, and how much money is required to fix the house up. Learn how to estimate your potential loss when selling a house as is.
What is a house in poor condition?
A house in poor condition can mean many things, including those in need of cosmetic updates, major repairs, or even a complete rebuild. These homes tend to sell for less and attract a smaller pool of potential buyers, with investors being the most common buyers. In competitive markets, however, homes in poor condition can fetch good prices.
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