It’s often taken for granted that a house will eventually sell depending on the price. Unfortunately, that’s rarely the case. In fact, price is often a relatively minor factor in determining the sale of your home. There’s other conditions that take precedence; everything from your neighborhood to the health of the real estate market both locally and nationally will affect your home sale. But the most important factor which impacts a home sale? The condition of your home.
More specifically, a house which needs repairs.
It’s no secret that renovated homes have a high sales rate. In fact, it’s been estimated you can recover up to 85 percent of the cost of renovations in addition to an increase in home value. But what about a house that needs repairs? Before you consider spending the estimated $9,081 on home repair, here’s a few things to consider.
Is There a Market for a House That Needs Repairs?
The market for homes that need repair actually does exist. And depending on how badly damaged your home is, you can sometimes get a relatively comparable offer as a well-maintained home.
There’s a rule of thumb called the one percent rule: homeowners should allocate approximately one percent of their home’s value each year into general maintenance. Minor repairs, such as replacing worn out flooring or addressing any plumbing issues, typically won’t make a huge dent in your home value if left unaddressed. But large scale structural damage can; particularly if you’re in an area with a high risk for natural disaster.
Still, there’s a small market for homes in need of extensive repair. There’s a new breed of homebuyers influenced by DIY shows who like to consider themselves “fixer-upper” wizards. While they can occasionally be willing to pay close to full asking price for damaged homes with historical value, they’re more often than not going to pay considerably less. And the likelihood of finding an agent willing to sell a house that needs extensive repairs is slim to none.
Is Repairing My House Worth the Investment?
Not always. Home repair can be costly, depending on the severity of the damage. Even minor repairs can sometimes reach into the five figure range. For general wear and tear, the estimated minimal investment of $4,000 can frequently be recouped if your house closes. But not always. Remember, most buyers already have negotiations in mind. And if your asking price is $250,000 and you’re finding buyers aren’t willing to pay more than $225,000, then even a minor repair is money down the drain.
How Do I Sell a House That Needs Repairs?
Identify just how drastic the need for repair is.
Sometimes, even simple improvements to your front yard’s curb appeal or small repairs such as replacing broken tiles and lighting fixtures can make a huge difference in your home’s appearance.
See if you qualify for a home renovation loan such as an FHA 203(k) or HomeStyle loan from Fanniie Mae.
There are particular requirements for a renovation loan, including credit score and repair severity, however, and they vary from loan to loan.
Contact a reputable home buying company.
Home buying companies specialize in purchasing houses in need of repair, no matter how badly damaged. You can generally receive a guaranteed offer in under two weeks with no need to rely on closing costs or title insurance. What’s more, you don’t need to worry about the expense of repairing your home. The sale is guaranteed, with no obligations and no cost to you.
If this is something you’d be interested in, then give us a call at 801-939-0123 or fill out the form below. We look forward to speaking with you!