When selling your home, there's much to consider, especially when pricing. The condition your home is in when you put it on the market helps determine its market value. Whether you need to get out of your home quickly or can take your time in selling it, you want to get the highest price possible when you sell your home. To determine what "highest price" means for you, you'll need to ask yourself, "Should I repair my house or sell it like it is? The answer depends on your response to these questions.
Why Are You Selling Your Home?
Whether you'd repair or sell your home as is depends on your situation, particularly your finances. If you're selling because you're upside down in the home and can't afford the mortgage anymore, repairing the home may not be feasible. You may need to sell it as is (in its current condition), especially if you're already in a short sale situation.
However, if you're downsizing the home you've lived in many years, you may want to consider repairing your home for sale. That's particularly true if repairs include things like water heaters, furnaces, plumbing, roofing or electrical.
Who's Your Buyer?
It used to be many first-timers would consider a fixer if they thought it would get them into a home. However, in today's market, that's not usual -- first time homebuyers want move-in-ready homes. How much you fix up your home before you sell it depends on your target buyer.
Fallon Traylor, Realtor at Berkshire-Hathaway Home Services, Georgia Properties says, "The market price for homes like yours and what buyer expectations in that market also determine whether you should make repairs or sell your home as is." She continues, "Whether you're marketing your home to owner-occupants or to investors also makes a difference."
What Is Your Goal in the Sale?
If you're an investor looking for a quick cash sale with no contingencies like a mortgage (or in a short sale situation), you may want to forgo the cost of repairs and sell the house "as is". However, if your goal is to get the highest price possible, you should consider getting the repairs done. "In some hot markets, where the buyer will live in the home," says Traylor, "the homes in bidding wars are those where all repairs and remodeling have been done."
Can You Afford Not to Repair?
"The cost of not doing a repair is 100 percent," says Jon Wolford, Branch VP of McEnearney Associates in Virginia. "Any savvy buyer always will ask for more off the price than the cost of the repair, typically double," he adds.
So, if your goal is to get the most money for your home, you'll want to do repairs. Otherwise, expect buyers to bid down the price and to have to sell your home for less. In addition, if you decide to sell the home "as is", you may be required to disclose problems that you're aware of at sale.
What Is the Cost of Repairing?
The first thing you should do is get a home inspection to see what must be repaired and to determine what repairs might cost. Once you know what they'll cost, Wolford says the cost of the repairs, if you don't have the cash on hand, "is the cost of borrowing the money short-term." It's fairly simple to calculate the cost of a loan. "So, if you can afford it, borrow the money and make the repairs," he advises.
What's Your Bottom Line?
The cost of repairing vs. selling a home as is is your bottom line. There are costs either way. So, ask yourself the questions above and get the help of a competent real estate professional in your area to help you make the best decision for you. That way, you'll get the most out of your home sale.