In a previous post, we discussed buying the worst Windsor real estate in the best neighbourhood. Today, let’s turn it around. What if you are the seller of a home that is in desperate need of work? Should you spend the time and money to update it or should you price it “as is.”
The answer is: it depends.
There are many issues to consider: what is the housing market like? What about other homes in the area? What is the seller’s personal situation? Do they have finances to make repairs or do they need to sell quickly?
Finally, what do buyers want? Do the majority of them flock to fixer upper homes or do they tend to ignore them?
Let’s answer the last question first. Buyers normally want a house that is move-in ready. They don’t normally look at homes that require a tremendous amount of work unless they are buying for an investment or they simply can’t qualify for a more expensive home. It is extremely rare that a first time homebuyer wants to buy a property that they need to take down to the studs. Most don’t have the expertise or the budget for such a project.
However, some buyers don’t have a problem with simple repairs, such as painting the walls, replacing light fixtures or changing carpet – as long as the house is priced properly.
But for sellers, there are some repairs that make sense to do themselves to make more money when listing the property. Let’s take a roof for example. If your home needs a new roof, which we will say costs $10,000, and your house is worth $200,000, a buyer might offer $175,000 – for the cost of the roof and the hassle that goes along with it. It would be better for you to pay to repair the roof yourself, and list the house at $200,000. A new roof will cost you, but you won’t lose any more than that. Also, most buyers don’t want a house that needs a new roof, so the number of those looking at your home will be limited. Once a house is on the market for a long period of time, you will need to start dropping the price of your home. Any way you look at it, you lose money if you don’t repair the roof.
What To Do Before Fixing Your Home:
Before you even consider making huge improvements in your home, take the time to go and tour other properties in your area that are for sale. Look around and see what amenities they have as well as the condition of the home. Now compare these properties to your own home. If homes are greatly improved and have many updated features while yours does not, then you may want to consider making these improvements.
But keep this in mind: You don’t need to do top quality appliances or rip out the kitchen cabinets. However, minor improvements may be necessary. Try painting the cabinets and updating the hardware. Mid-range appliances are fine, stainless steel is better.
The following are improvements that a seller should make if at all possible:
1. Replace worn, threadbare carpeting. You don’t need to be the most expensive, just a neutral, mid range carpet.
2. Patch holes and cracks in walls.
3. Repair all leaky faucets or plumbing issues.
4. Replace broken windows.
5. Replace dated window coverings.
6. Wash windows if needed.
7. Repair roof.
8. Paint walls a neutral color if needed. Dark rooms appear smaller.
9. Change any dated light fixtures and ceiling fans.
10. Repair any broken appliances.
Selling homes “as is” means that it has a strong probability of getting a rock-bottom price. When possible it is better to make the repairs. Also, the more updating a house needs, the less amount of buyers you will have making appointments to see your home.
If you have a home that you want to sell in poor condition, hire a good real estate agent that can walk through the home with you and find ways to make your home stand out. It will be all about marketing to the target buyer to get traffic through your home. Your home will need to be priced right and it’s important for the sellers to understand that they may not get the price that they want.