How To Sell A House In Need Of Repairs: The Ultimate Guide To Selling A House As-Is
How To Sell A House In Need Of Repairs: The Ultimate Guide To Selling A House As-Is
Selling a house as-is in need of repairs comes with some big-time decisions. Knowing what repairs to complete, who to hire, making sure the repairs are done correctly, and making sure you will get your money back for the repairs is only the beginning. First, you must decide if it is even worth it or possible to make all of the repairs to the home. Houses that need repairs don’t attract many buyers who typically look for move-in-ready properties. Luckily, we have a breakdown of everything you need to cover to make the right decisions for your situation when selling a house that is in need of repairs.
Preparing To Sell A House That Needs Repairs: Know What To Expect
To sell a house that is in need of repairs, you must first prepare for what to expect. Most people will sell a house as-is and avoid the entire process of repairing the home before selling it. However, others may prefer to take on the repairs themselves in order to pad their bottom line. In addition to educating yourself on repairs, you need to completely understand your motivation for having your home ready for sale by knowing what price point you can sell at prior to making repairs.
Before making any repairs, have an honest conversation with yourself about selling a property in less-than-perfect condition and what that actually looks like. The buyers for a property in need of repairs may be local buyers who are paying cash for houses. This can make the sales process fast, easy, and worry-free. Putting a house on the market that is in need of repairs can mean the house sits for a longer period of time due to the condition of the home.
Making the repairs prior to the sale can significantly decrease the time on the market for your house, but it will also cost you money. It could possibly make you money once the dust settles.
Identify the types of repairs needed
To sell a house that is in need of repairs, you must first prepare for what to expect. Most people will sell a vacant house as-is and avoid the entire process of repairing the home before selling it. However, others may prefer to take on the repairs themselves in order to pad their bottom line. In addition to educating yourself on repairs, you need to completely understand your motivation for having your home ready for sale by knowing what price point you can sell at prior to making repairs.
Before making any repairs, have an honest conversation with yourself about selling a property in less-than-perfect condition and what that actually looks like.
The buyers for a property in need of repairs may be local buyers who are paying cash for houses. This can make the sales process fast, easy, and worry-free. Putting a house on the market that is in need of repairs can mean the house sits for a longer period of time due to the condition of the home.
Minor Repairs
Minor repairs are small fixes that can be done in a day or two with the use of regular household tools. Some examples include:
- Painting a room or bathroom
- Replace doorknobs, hinges, door locks, etc.
- Minor sheetrock or drywall repairs
- Fix leaky faucets or toilets
These repairs are typically DIY in nature or can be completed by a local handyman.
Major Repairs
Major repairs are large fixes that are more complicated in nature. They take much more time, effort, and expertise to complete the repair(s). Some examples include:
- Replace an entire heating or air conditioning system
- Large plumbing issues
- Adding a new kitchen
- Making structural changes in the home (adding rooms, or removing walls)
- Remodeling the bathroom
- Roof replacement
- Foundation repair
- Upgrading the electric system
- Exterior siding and/or window replacement
These repairs are best left to the professionals and should be delegated to licensed contractors. Renovating the kitchen and bathrooms typically gets you the most bang for your buck and will give you the greatest return on your money. Some repairs like the roof, foundation repairs, and electrical upgrades are required but yield little return on money spent.
Upgrades
Upgrades are things that you may want to consider adding before the sale such as:
- Updating lighting fixtures and switches
- Fencing or security system installation
- Updating Appliances
- Landscaping
These cosmetic changes can help increase your home’s asking price. It might also make your house stand out from the competition. These upgrades to your house before selling are valuable if the rest of the house is already in move-in-ready condition.
Get Estimates For The Repairs From Profesional Contractors
It is best to hire licensed contractors (for major repairs) or an experienced handyman (for minor repairs). You can get estimates from local professionals in order to estimate the cost of all necessary home repairs.
- Get recommendations from people in your area who you know or trust.
- Collect more than one bid. This is an important step you should not skip.
- Don’t be solely driven by the price of the bid.
Look at the credentials of each contractor. Also, ask about the warranty that comes with the repair work. Many contractors offer a warranty that covers them for a year or more.
Be sure to shop around, comparing the bids with each other and being clear about what they include.
Ask them if they have a list of references from previous customers who were happy with the job they did. Request contact information for those references so you can call them.
Once you have identified a contractor you would like to work with if you complete the repairs, you now have to go through the list of repairs that may or may not be needed so you can come up with an exact scope of work and refine your budget.
Decide On Which Repairs Are Worth The Cost
Some repairs are considered “cosmetic” and are not worth the cost of construction or repair. For example, a door that sticks when you close it may only require the hinge to be tightened. Replacing the door is not needed in this scenario. There are numerous other examples of cosmetic repairs, so really think through what needs to be fixed so your budget doesn’t get out of hand.
According to remodeling in the Texas region, some repairs and updates are truly worth the money you put in while others, well, not so much.
Repair Costs/Values
- Window Replacement: 59.7% of your costs will be recouped
- Major Kitchen Remodel: 54.4% of your costs will be recouped
- Bathroom Remodel: 54.4% of your costs will be recouped
- Garage Door Replacement: 93.2% of your costs recouped.
Some of those numbers are surprising, to say the least. Make sure you are choosing your repairs and updates wisely in order to get the most out of your remodeling budget.
Is My House Worth Repairing?
Repairing your house can be costly, not to mention time-consuming. Before you get started on any repairs, you want to make sure that the value of your home will increase with the amount of money invested in it.
Factor in items besides just cost. There is the time requirement, the frustrations of a remodeling project as well as the risk that your design or aesthetic isn’t well-received by potential buyers. Taking all these factors into account will help you decide if remodeling or repairing the house is worth the cost and benefit.
Making The Repairs Prior To The Sale
Once you have made the decision to make the repairs to the house prior to selling the house, and you know exactly which repairs you are going to complete, you will want to keep a close eye on the quality of the repairs. If you are going to ask for top dollar for your home, buyers expect to see that quality work was done on the home.
Ensure your colors, design selection, and finish-out materials are in style and have a wide appeal so that you can attract as many potential buyers as possible.
Now is also a good time to consider finding a realtor who will help you list your house for sale.
Clearing Clutter Before Selling
When selling a home that has already been completely repaired and is move-in-ready, you will want to remove as many personal belongings as possible.
The less clutter, the bigger the impact. Homebuyers want to visualize themselves living in the home they are purchasing.
Although this may be difficult for some homeowners to do, you should remove as many personal items as possible before putting your house on the market.
Make A List Of Items To Sell Or Donate
Before you start packing, make a list of any items that need to be sold or donated. You may want to do this with your spouse so both parties will know what needs to be done and how long it will take. Garage sales can be helpful but time-consuming. Donating to the Salvation Army or Goodwill is also easy and helpful.
Rent A Storage Unit
If you have items that are large or you do not want to part with, consider renting a storage unit.
Once your house is sold, transport the items from the storage container to your new home.
This may be an extra charge for moving companies but having at least some of your personal belongings will be worth it in the end.
Hire A Staging Company
This might be an option if your budget allows it.
The goal of this option is to make your home look like a model showroom. However, this option can cost several thousands of dollars depending on the level of staging.
If You Decide Not To Make The Repairs…
Sell The House As-Is Without Making Repairs
You have decided you need to sell your house without making repairs. You may be wondering who will buy a house that is in disrepair, and how much less will it sell for. You might not even be sure if there are buyers out there willing to purchase a home that isn’t move-in ready. We will answer all questions related to how to sell your house as-is.
Can You Sell A House Without Fixing It Up?
It is possible to sell a home without making repairs. The house might not be in the best shape, but it will likely close escrow with enough buyers interested in purchasing it. For houses in need of substantial repair, you could be looking at contacting a local company that pays cash for houses.
What Is The Fastest Way To Sell A House That Needs Repairs?
When people are finally ready to get out of their house, they are usually in a hurry to make the sale happen. For homeowners who are trying to get rid of an old home but don’t have much money for repairs, the fastest way to sell a house is to contact a company that will buy your house as-is. These companies are more reliable than individual investors and they have the ability to close on your timeline so it can happen quickly.
How Much Do You Lose Selling A House As-Is?
If you own a house in need of repairs, the key question is how much money will you lose by selling it as-is?
The easy answer to this common question is that there are three things that make up your bottom line when selling a house: the sales price, closing costs (fees), and commissions.
#1. Sales Price – When you sell as-is to a home buying company, conventional wisdom says you will sell at a discount. However, this isn’t always the case. Depending on the repairs needed on the home, you might actually get more than market value for the as-is condition.
#2. Closing Costs or Fees – typically closing costs can be anywhere from 1.5-6% depending on the type of transaction you have. Depending on your sales price this can be a significant hit. Most people who buy houses professionally are willing to pay your closing costs as a part of the transaction.
#3. Commissions – When you are selling without making repairs, you have the opportunity to skip using a realtor. When you sell your house on your own, you can save a typical 6% on commissions. For a house selling for $200,000 that is a whopping $12,000!
So if your home needs repairs and you want to sell without making any of the needed repairs, you might actually walk away with an equally good deal.
Considering that according to remodel and the figures listed above you actually are unlikely to recoup all of the money spent remodeling your house yourself, you might actually come out ahead.
Finding A Cash House Buyer To Sell The House As-Is
If you decide to sell your house to a company that buys houses, there are some best practices you can implement so that you have the best experience selling your house. Not all-cash buyers are the same and you want to make sure you work with the best buyer for your local area.
Follow these important steps when beginning to research who buys houses that need repairs in your area.
Get A Referral For A Homebuyer
The single most important thing you can do is get a referral. That’s because your referrals are the best source of information for which cash house buyer is best suited to buy your property in the condition it’s in. If you don’t know anyone who has worked with a cash home buyer, use Google, Yelp, or the BBB to find a reputable company that takes us to our next step..
Check Reviews For A Homebuying Company
Once you have a company in mind, check out their reviews. Google them and see what other people are saying about the company. Also, read through any online reviews such as Yelp or BBB to get an overall feel for how they handle customers.
Deal With A Reputable & Reliable Company That Is Local
When working with a company that buys houses, make sure to deal locally. Yes, there are companies that buy homes nationally but you don’t want to sell your house to someone who is hundreds of miles away because there could be complications later on in the process. Plus, do you really want to sell your home to a computer algorithm?
For more tips on how to find the best possible company to buy your house, we wrote an in-depth article on how to find the right cash buyer that covers all the steps.
Sell Your House As-Is For Cash And Move On Without Making Repairs
Selling a house doesn’t have to be complicated and expensive.
The process of selling a home may seem overwhelming, but it doesn’t have to be. We buy houses in their as-is condition at no cost to you. Our quick and easy process allows you to sell your house fast without any hassle or repairs.
If you’re looking for an easier way to get cash for your home, we can help! Since 2011, Capstone Homebuyers has been buying homes from owners just like you who want the most convenient option available when they need money fast. With our “No Hassle” approach, there are no fees or commissions charged by us; instead, we make offers based on the value of your property in its current state (as-is). Once you accept we close on your timeline at a price that’s guaranteed not to change! You don’t even pay closing costs when working with us!
