So your home has foundation problems and you just got an estimate for fixing it. Ouch! Or maybe a leak in your roof has led to the discovery that the entire thing needs to be replaced. Or termites have been eating their way through the wood frame of your home, and you’re just now catching on. Whatever the calamity, you always have the option of selling your home even if it needs major repairs. But does it make more sense to sell your house as is, or put big bucks toward a renovation?
Selling a fixer-upper—even without fixing the major issues
The good news is you can, in fact, sell a fixer-upper. (Let’s not forget where Chip and Joanna Gaines get those dumps to renovate on HGTV’s “Fixer Upper”!) Deciding to sell a home with foundation problems, for example, depends on your financial situation, your equity in the property, and the potential sale price for it, says David Long, a real estate agent with Ebby Halliday Realtors in Plano, TX.
Long recommends talking to a real estate agent and determining the potential sale price minus repair costs to see if it’s worth making the repairs or not. Even if the sellers are uninterested in making the repairs, they can actually come out on top if the remaining mortgage balance is less than the price they’re able to get for the home.
“You don’t necessarily have to fix the foundation problem,” says Doreen Slavitz, a real estate agent with the Real Estate Group in Culver City, CA. “But you do have to let potential buyers know about it, and adjust your price down to cover the cost.”
Another option is to give buyers a closing cost credit, or a reduced rate on costs that occur during escrow. Talk with your real estate agent about which is best for your situation.
A little cosmetic work helps, even if you can’t afford large repairs
Unloading a house in need of major renovations can be challenging, but putting some money into simple fixes like a paint job, baseboard repairs, or new light fixtures can help make your home appear in better shape before you list it.
“It makes the biggest difference in trying to sell a home with more expensive repairs such as roof issues, electrical wiring, and floor replacement,” says real estate agent Phillip Salem of Triplemint in New York City. He also recommends tapping your real estate agent for recommendations on home improvement experts. A good agent will have plenty of connections in the business.
“It also doesn’t hurt for a reliable and trusted inspector to come and get a quote on how much these fixes will cost,” Salem says. That way you’ll be aware of the price when a buyer submits an offer. “It gives you more negotiating power if a buyer tries to submit a low offer thinking the repairs will be more costly than they actually are,” he says.
The case for making expensive repairs
If you have the means to get those repairs done before selling your home, there’s a good chance buyers will be willing to pay top dollar for brand-new amenities. The good news is there are ways to finance repairs without cleaning out your bank account. Wait to start the repair work until after the buyer’s loan has been approved, says Colin Rosenthal, a real estate agent with DFW Metro Housing in The Colony, TX. This will likely land you about a week before the closing date. Then you can pay for the repairs immediately after the closing, when you’re funded.
Disclosure is a must when selling as is
Just remember, if you decide to sell as is, you are legally required to disclose all issues with your home on a seller’s disclosure form for your buyer to review, says Chuck Apligian, a real estate agent with Re/Max Dallas Suburbs in Plano. If you intentionally withhold known information about the house’s issues, the buyer can take legal action against you if anything bad happens to the house in the future.
So what do you have to disclose? The rules vary by state, but generally you have to speak up about bigger problems like lead paint, sinkholes, or flooding, Atlanta-based Realtor Bill Golden with Re/Max Metro Atlanta Cityside tells realtor.com. Ask your real estate agent what sellers in your area have to disclose.
The post Yes, You Can Sell a Fixer-Upper As Is, but Should You? appeared first on Real Estate News & Insights | realtor.com®.
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