I wish there was a cut and dried answer but this depends on variables such as overall condition of your home, the condition of competing inventory and whether it’s a seller’s market or a buyer’s market and the likelihood of return on investment.
Generally speaking, sellers often put too much money into fixing up their homes for sale and I favor cleaning it well, removing clutter and painting where needed. If you have bigger issues, then price the home according to condition and let the buyer do what they will might be best. Youu might spend money to make repairs a buyer may not notice or would not pay extra for. Ultimately, it’s a good idea to discuss with a professional real estate agent before making any repairs but let’s explore more below….
Selling in As Is condition
If your home needs a ton of serious work, then I’d recommend pricing it according to the condition and not spending any money. You can price it low and maybe get multiple offers to drive the price up without making any inspection based repairs – wouldn’t that be nice.
What do buyers want?
Some home buyers want to buy a fixer upper, but generally these folks want a home that need cosmetic repairs. These are often buyer that either don’t qualify for a more expensive home or those who want to make a profit by fixing the home up.
These buyers will discount the price of the home to allow for the repairs and for the inconvenience. For example, let’s say a home is worth $200,000 in top shape, but needs a new roof. A new roof may cost $15,000. A buyer most likely will not offer $185,000 for this home accordingly because they could buy a similar home with a new roof for $200,000 and not have to go through the process of getting a new roof and all that comes with it.
A buyer for this type of home might offer $170,000, or even less. In this scenario, a seller might want to pay for a new roof and sell the home for $200,000.
Moreover, most buyers will not buy a home that needs a new roof. They will worry the work involved will cost more than what they anticipated. Perhaps replacing the roof would involve tearing off the sheathing and repairing rafters, which could add to the cost. Most buyers want a home that is in move-in condition. By not making this repair, you will limit the number of buyers who may be attracted to your home.
Before making fixes
You should weigh the cost of improvements against the home’s market value after the repairs or upgrades are completed. If an upgrade won’t return the investment, such an improvement might not be warranted. Before you decide to finish the basement, realize that upgraded kitchens and baths carry the highest return.
This doesn’t mean you need to buy designer appliances and tear out the cabinets. But a minor kitchen remodel might be a good investment. Sometimes, simply painting cabinets and installing updated hardware can give your kitchen an all-new look…maybe an appliance upgrade if needed and possible for you.
Here are 10 minimum improvements to make before selling your home (if you have the means):
- Patch holes/cracks in walls and ceilings
- Fix all broken appliances and HVAC systems
- Repair leaks
- Replace worn carpeting
- Repaint dark or blemished walls with neutral paint
- Replace broken windows
- Repair the roof
- Replace old window treatments
- Fix code violations