Should you Fix up your Home or Sell it as it is?
Many sellers today find themselves asking the same question: should they
fix up their home when putting it on the market or sell it as it is? The
answer can actually depend upon a variety of factors including the
condition of other inventory on the local market and how much of a
return you are likely to receive from making such an investment.
One thing to consider is whether buyers are looking for homes that are
already fixed up or fixer-uppers? There is no denying that some buyers
will be interested in the idea of buying a fixer upper property, but the
thing to keep in mind is that the majority of these buyers are only
looking for home that need cosmetic repairs. Most buyers who will be
interested in such homes are looking to make a profit by making some
light homes and re-selling it or because they are unable to buy a home
that is more expensive.
First time home buyers typically are only willing to perform such
repairs as painting the walls, replacing some light fixtures or perhaps
installing some new carpeting. They are not usually interested in moving
walls or tearing the entire structure down to the studs. Buyers who are
interested in fixer upper properties will be looking for the price to be
discounted in order to allow for the necessary repairs. For example,
suppose a home is worth $150,000 if it is fixed up, but it requires a
new roof to be installed. The cost of the roof might be $15,000. A buyer
might not be willing to offer more than $120,000 for the home because
they know they could buy a home in just as good shape, with a new roof,
for $150,000 and not have to deal with the hassle of repairing the roof.
If you find yourself in that type of situation, it would be better to go
ahead and repair the roof so that you can hopefully get the full price.
Keep in mind in such situations that if you elect not to make necessary
repairs, you could be severely limiting the number of people who will be
interested in buying your home. This is because a large number of buyers
will be concerned about the cost of the repairs, the effort involved in
the process and the fact that the home is not in move-in condition.
Savvy sellers know they must consider the cost of the improvements along
with the market value of the home once the upgrades or repairs are made.
If an improvement will not return an investment, it may not be a good
idea to proceed with such an improvement. Before making a final decision
whether you want to make a costly improvement, keep in mind that the two
areas of the home that will provide the highest return are baths and
kitchens.
It is usually a good idea to look at some other homes in the
neighborhood to help determine whether repairs or improvements are
warranted. Consider both the amenities available in these homes as well
as the condition and then compare those homes to your own. For instance,
if you notice that the majority of homes on the local market have
kitchens with upgraded appliances and high quality counters and
cabinets, then it may be a good idea to go ahead and consider fixing up
your own kitchen.
That does not necessarily mean that you need to install the most
expensive appliances you can find, but even a minor remodel of the
kitchen could pay off for you. In some cases, all that is needed is some
fresh paint and new hardware on the kitchen cabinets.
Do be sure you repair any items that are worn out, broken or defective.
Buyers will definitely become less interested if they notice items that
are malfunctioning and might even wonder what else is broken.
Items to focus on include:
-
Patching up any cracks or holes in the ceilings and walls
-
Repair leaky faucets
-
Repairing all broken appliances
-
Replacing any carpeting or rugs that are worn
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Replacing broken windows
-
Repainting walls that are dark in color
-
Repairing the roof
-
Replacing outdated ceiling fans and light fixtures
-
Repairing any code violations
Remember that if you happen to live in a seller's market you may be able
to get away with performing fewer repairs prior to selling but the final
sales price may still suffer. If you are in a buyer's market, you will
need to pay close attention to repairs to garner a buyer's interest.
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