Many prefer buying new houses instead of pre-owned ones because they require less maintenance. In such a market, selling a home that has seen better days can be very difficult. Sure, repairing and renovating the property will attract more customers, but not everyone may want to spend their money or time doing that. Luckily, there are some steps homeowners can take to sell their home, even when it needs repairs.
Assess the situation
Homeowners who know their space requires a lot of work may benefit from hiring a professional inspector. The expert can help provide a clear picture of the house’s condition and list the fixes that need to be made, such as bolstering the structural integrity, replacing electrical systems, or eliminating mold growth.
Having this information on hand can help one take a more informed call regarding the expenses involved, should they choose to repair. In many cases, repairs can turn out to be a lot cheaper than one initially expected. If not, it will at least help homeowners be aware of the problem and communicate better with potential buyers.
Hire an experienced agent
Whether renovated or not, people usually decide to hire the services of a real estate agent to sell their home. These professionals handle almost every aspect of the selling process, from marketing and promotion to open houses.
Depending on the situation, some agents may recommend dolling the house up to make it more appealing to buyers. Minor fixes like a coat of paint, replaced caulk, and updated light fixtures can not only give the house a fresher look but could also capture a buyer’s interest without being too much of an investment.
Once the house has been readied, the agent (or a hired photographer) will go around the house to click photos and videos and create an online listing. Based on buyer interest and convenience, they will also organize viewings and handle other tasks, such as documentation and finalization of the sale. For their services, real estate agents typically charge around 5-6% of the final sale price.
Set the right price
Given the emotional attachment to one’s home, setting a fair market value is a tough undertaking as it is. With the addition of repairs and renovations, this becomes even more complicated.
Luckily, sellers can tap into their agent’s market expertise to decide on a fair price. For this, it is important to find a real estate agent who has experience working with the distressed home market and understands when others may be willing to cut corners. If the price is set too high, the home may never sell, and if it’s too low, one may lose a significant chunk of money. While estimating the price of the home, one must factor in a “seller concession” to account for renovation costs that may be incurred by the person moving into the home.
Generally, those interested in buying a fixer-upper are on the lookout for a good deal, so it may be a good idea to be slightly flexible with the pricing strategy. The cost can be decided based on feedback from home showings and interactions with potential buyers.
Be honest about the house’s condition
When creating the listing and entertaining potential buyers, one should be clear about the house’s condition. If the problems are not visible outright, the homeowner should list them in the description. Doing so will help attract the right type of buyer and prepare them for the work that may be required.
The home’s condition will also need to be included in the legal disclosure at the time of the sale. In most states, the law requires that sellers inform the buyer about any known issues in the property. These disclosures are shared in the early stages of the transaction so the buyer knows what they are getting into. When creating these reports, one must be as transparent and specific as possible. In case of a crack in the wall, for instance, one must clearly state where the crack is located, its severity, and what may be done to resolve the issue.
Sell the house off the market
One can also decide to sell their house off the market to a real estate investor, such as an individual house flipper, rental landlord, or construction company. Many may be willing to purchase the place without any showings or renovations and close the deal rather quickly. That being said, these transactions are often carried out in cash. While this does drop the home sale fees to zero, it can be taxing to shop for offers, vet them, and finalize the sale. Cash buyers may also offer less money than others.
Those considering an off-market sale must weigh all the pros and cons of the situation before partnering with a real estate agent. This is because off-market buyers often require sellers to sign contracts (for six months or longer) wherein a commission may be owed even if they do not close the sale. This can result in major losses for the seller.