Problem House? Do You Sell "As Is" or Rehab it?
If you own a house that has multiple problems and you want to cash out, you're probably asking yourself, "What's my best exit strategy?"
You can list your property as a fixer-upper. Or you can fix its problems and sell it at a higher price. I've talked to multiple people who have been in this situation, and I've been down this road myself. Here's what I've learned about what's best to do.
Start with questions
I've always encouraged sellers to maximize profits by listing a property in good condition and staged to sell. But sometimes that just isn't possible. The seller may be moving out of state, or lack the money, stamina, imagination, contacts, or time to deal with repairs.
Maybe you own a distressed property because you inherited it. Or you purchased one on the courthouse steps without an inspection. Perhaps you've owned a rental house and are tired of being a landlord. Or you've lived in a house and were not able to maintain it because of natural disasters or personal financial problems.
If you're undecided about what to do with a home you own, a good place to start making some decisions is to ask a local real estate agent for the estimated value "as is" versus the value after repairs. An experienced Realtor will help you decide which repairs are necessary and which ones bring the best return.
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| If there are similar homes nearby, and some of them have sold recently, it will be relatively easy to judge the value of your property. Photo: Robert Knopes |
Calculate if the increase in the home’s sale price will be higher than the cost of repairs, contractor delays, and carrying costs like insurance, taxes and utilities. My experience is that remodels usually take twice as long as you initially plan. If the math or your timeline does not support a full remodel, selling "as is" will probably be safer.
If you keep careful records of the permanent upgrades, like fencing, a deck, or solar panels, they can help you at tax time.
If you sell "as is"
Selling without renovating makes sense if your timeline is tight -- if you face a job change, a divorce, or financial stress and cannot wait months for contractors. It also makes sense if buyer demand is high and houses sell fast, so you can skip repairs and let the market set the price.
You can list your property as a "handyman special." There is always a market for houses that need rehabbing, such as flippers and first-time homeowners who have skills. You can cash out without expenditures or stress, but you can't expect to make a profit. You may even have difficulty breaking even if you have an unpaid mortgage.
Selling unrenovated does not excuse you from state disclosure laws, which typically require you to report major problems like roof leaks, foundation cracks, or plumbing failures.
Be aware that government regulations require certain serious disclosures. For example, if your house was built before 1980, it may contain insulation, flooring, ceiling tiles, or siding made of asbestos. So, before any demolition or remodeling or even routine maintenance, arranging for a professional asbestos removal service is a crucial first step, because asbestos is a serious health hazard. Popcorn ceilings applied between 1950 and the late 1980s can contain asbestos.
And if your home was built or painted before 1978, it may contain lead-based paint. A lead-based paint disclosure is required under EPA and HUD regulations. Your Realtor will advise you and supply the brochure for buyers.
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| Older homes are likely to have lead-based paint on their walls and trim. Walls can be painted over, but windows are usually replaced. |
Middle ground
One compromise you could choose is to fix critical safety items like active roof leaks, faulty wiring, or broken HVAC units so home inspectors do not scare buyers away. Buyers will know they can safely move in and be comfortable.
Or you can take it one step further and do some small, inexpensive fixes. These would include decluttering and cleaning both inside and outside the property, and painting walls, trim, and doors. New light fixtures and carpet cleaning could also be on your quick-fix agenda. These add more value than they cost.
Don't ignore your building's exterior so that your online photos and curb appeal help attract serious buyers. A thorough soft wash treatment will restore exterior surfaces without the damage that high-pressure washing can cause to materials like painted wood, stucco, or aging siding. This method relies on specialized cleaning solutions and low-pressure water application to break down and remove buildup gently but thoroughly.
Exterior renovations rarely stop at the structure itself, and landscaping often needs just as much attention, particularly around garden beds and mulched areas if they have been neglected over time. Professional bark blowing offers an efficient way to apply fresh mulch evenly across large or oddly shaped areas. This technique works particularly well for properties with extensive garden beds, sloped terrain, or areas that are difficult to access with standard wheelbarrows and shovels.
If you are living in the property, you can take your time and make repairs and upgrades as time and budget allow. Skip full kitchen or bathroom remodels because big upgrades rarely return all their money at sale time.
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| Landscaping projects get done quickly when you hire pros to handle chores like mulching and seeding. Photo: Hydroseeding & Bark Blowers, Inc |
If you decide to rehab
If you and your chosen Realtor agree that the location and certain features of your property justify selling it with some improvements, do the math. A good real estate agent will show you comparables so that you know what your competition will be.
The place to start is to make a checklist of tasks. Hire an inspector to identify hidden problems so you can price the home accurately and avoid surprises during negotiations. Then, get written repair estimates from local contractors. I like to get price quotes from different contractors. It's always an education because there are usually multiple ways to fix a problem.
Marketing your house
Decide on the outstanding selling points for your property. Even if the house lacks updates, it's possible that things like its location, or lot size, or floor plan offset its shortcomings. Different buyers have different priorities.
When it was time to sell my late mother-in-law's 1950s house, the family knew the kitchen and bathrooms were out-of-date. Rather than replace original cabinets and tiled walls, we worked together to make the home shine, and let prospective buyers appreciate (and pay for) all they were getting -- hardwood floors, five bedrooms, four bathrooms, a sunroom, an extra-large living room, 13 closets, and 40 acres within commuting distance to New York City. Instead of letting buyers negotiate a low price because it had obsolete features, we did what we could ourselves -- improving the landscaping and painting the house inside and out.
Work closely with your listing agent. An experienced agent will understand the value of your property and know how to craft compelling, accurate sales copy for your online listing. Your description should read "updated" rather than the term "repaired" or "replaced."
A good real estate photographer will know how to take flattering pictures, both inside and out. Video and drone photography is becoming more common and less expensive.
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| A vintage bathroom can be a draw to some buyers, so decide what needs to be updated and what can be part of "authentic charm." |
Staging helps
If you are living in your property, it will be easier to stage it than if you've moved out or never occupied it. Choose your best pieces of furniture. Arrange furniture to make rooms look spacious and inviting. There are plenty of ways to make your home look attractive without breaking your budget. Follow all the economical advice I give in my eBook, DIY HomeStaging Tips to Sell Your Home Fast and For Top Dollar.
