Old houses plagued with maintenance issues are hardly appealing in the market. But some buyers might actually like them. Home-improvement-savvy buyers find fixer-uppers irresistible and are specifically looking for them. The idea of transforming an old house into a contemporary haven excites them the most.
But buyers are often warned against buying fixer-uppers. Despite the fact that a rundown house in a good neighborhood can gain twice its value after renovations, experts still maintain that it’s not always worth it. To be fair, going through the trouble of costly renovations can make a cheap property expensive in the end. As such, sellers are advised to make repairs on their fixer-uppers before putting them up on the listings. But not all sellers can do that.
What if you need emergency cash? Selling your house as it is can give you that. While there are other ways to receive the cash fast, like selling your other assets or taking out your retirement savings, those won’t likely earn you six-digit figures. But then again, what if your fixer-upper isn’t even worth hundreds of thousands of dollars anymore?
Buyers vs. Fixer-Uppers
Experts recommend this formula to buyers considering a fixer-upper home: Add up the costs of renovating the property based on a thorough assessment of the house’s condition. The estimated costs should include labor and materials coming from them and the contractors.
Next, subtract the estimated costs from the house’s likely market value after renovation. The market value should be drawn from that of similar properties in the market. Then they should deduct at least 5% to 10% more for extra repairs or renovations, unforeseen problems or mishaps, and inflation. The amount they’d get should be their offer.
Buyers are advised to hire a home inspector to assess the condition of the house. At best, the inspection will assure buyers that the fixer-upper is worth buying; at worst, it’ll help them back out of the deal.
With fixer-uppers, though, inspectors will list down the serious problems they found, show them to the buyer, who would then get the seller to pay for repairs, or negotiate the house’s purchase price downward. But if the house has too many serious problems, including structural issues, real estate agents may advise against buying it.
Clearly, you are at a disadvantage in this situation if you just want to sell your house quickly. But luckily, you’re far from hopeless.
Hacks to Sell Your Fixer-Upper Quick
There are some situations where it makes more sense to sell your fixer-upper as it is. Besides needing emergency cash, a house that has too many problems, such as a broken electrical system, holes, cracks, leaks, water damage, etc., can also be sold as-is, because those maintenance issues aren’t easily or economically fixed. In this case, just price your house low enough to attract multiple offers. Contractors and flippers will probably see value in your rundown house.
You can also offer your house to cash buyers, which are companies that buy houses immediately, without the lengthy paperwork and all. They’re one of your best bets if you need emergency cash from your house.
But if you’re not particularly in a rush, but would still be happy to sell your home as fast as possible, see if you can deal with some repairs. Buyers looking for fixer-uppers prefer properties that require only light cosmetic fixes. They’re usually hoping to profit from fixing up the house themselves.
Such buyers often discount the price of a fixer-upper to make room for repairs, then haggle even more for the inconvenience. For example, if your house would be worth $150,000 if it got a new roof, but the new roof may cost $20,000, a buyer won’t likely offer $130,000 for the house. They can buy another house with a sturdy roof for that price anyway.
Hence, they may offer just $100,000 or even less. As such, you’re better off paying the $20,000 new roof and then selling the house for $130,000.
The other repairs that can help you profit from the sale are:
- New siding (replace with fiber-cement or vinyl)
- Modernizing windows
- Adding a deck
- Swapping in a steel front door
If you have an outdated kitchen or bathroom, consider making minor revamps for those, too. Maybe you can repaint the cabinets or change their hardware. You don’t have to buy new fixtures or appliances; just ensure that they’re in good working order.
So, is selling your fixer-upper as it is worth it? Not in all scenarios. It’s only your best option if the house’s maintenance issues aren’t manageable anymore. But if you can still sell it for an attractive price, budget for the repairs. You can profit more that way, and avoid disgruntled buyers or reluctant real estate agents.