Is Now the Time to Fix?

PRMG 203K Loan Home Repair

Trying to decide whether to sell your house as is or invest in repairs? Your choice will likely depend on a number of factors, including the condition of your house and the state of the housing market.

Before you put your home on the market, learn which home improvements can boost the value of your home and improve the odds of a quick sale—and which may turn out to be a waste of time and money.

Factors to Consider

Many sellers put way too much money into fixing up their homes before listing them for sale. They repair flaws that a buyer might never notice or just won’t pay extra to have fixed. Before you decide to make improvements, consider the following.

What Is the State of the Real Estate Market?

In a hot real estate market, homes may sell in days, garnering multiple offers and even bidding wars. In a seller’s market, you can usually get away with fewer fixes before selling. However, a home that needs repairs will still deliver a lower price in any market.1 In slow markets, buyers might not even bother to look at a home that needs work.

What’s the Condition of Competing Homes for Sale?

A comparative market analysis (CMA) offers an overview of recently sold homes in your area. Your agent should be able to provide you with a CMA, which will help you get a sense of whether your home offers more (or less) than similarly situated homes.

What’s the Likelihood of a Return on Your Investment?

Some repairs and home improvements are more likely to pay off than others. For example, even a minor kitchen remodel can add more than $18,000 to the value of your home, while replacing the garage door can boost resale value by over $3,000.

Talk to your agent before making any repairs, to weigh the pros and cons of your particular home and your personal situation.

Selling a House As Is

There are some situations when it makes more sense to sell the house as is.

When a seller lists a house for sale as is, typically it means they will make no repairs to the property before the sale or offer any credits to the homebuyer to make improvements after the transaction is complete.

Let’s say the property in question needs a lot of work. It has holes in the walls all the way to the exterior and urine-soaked wood floors. Much of the electrical system doesn’t work, and the bathroom tub has fallen through the joists. All the faucets leak.

This is not a home that can be easily or economically fixed. A coat of paint won’t help. In this case, you might want to just price the house low enough to attract multiple offers. You can probably anticipate that only contractors and flippers will make offers.

Do Homebuyers Want Fixer-Uppers?

Some homebuyers say they want to buy fixer-upper homes, but they’re generally looking for those that require only light cosmetic repairs. Buyers who gravitate toward fixer-uppers are those who either don’t qualify to buy a more expensive home or want to make a profit by fixing up the home themselves.

Most “fixer-upper” buyers are willing to do simple repairs such as painting the walls, putting in new carpeting, or replacing light fixtures. They don’t want to rebuild a foundation or move walls.

Fixer-upper buyers will discount the price of the home to allow for the repairs, then discount it a bit more for the inconvenience. Suppose a home would be worth $100,000 if it had a new roof, which might be expected to cost $10,000.5 However, a buyer will most likely not offer $90,000 for the home. They could buy an identical home with a new roof for $100,000 and save the hassle.

A buyer for this type of home might offer $75,000 or even less. The seller would be better off paying for a new roof and selling the home for $100,000 in this scenario.

Keep in mind that many buyers will not buy a home that needs a new roof. They worry that the work involved will cost more than what they anticipate. Perhaps replacing the roof would involve tearing off the sheathing and repairing rafters, which could add to the cost.


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