If you are thinking of selling your home and asking yourself whether you should sell your house as is or fix it up, then you are not alone. To help make this decision it is first important to see why many people consider this option in the first place.
Why Many Houses are Sold As Is
Many homes, especially older ones are sold as is because the seller doesn’t want to invest the money to pay for repairs. Often you will see homeowners perform some basic repairs which can be simple and inexpensive, but drastically improve the curb appeal or first impressions of the house, such as patching holes in walls and ceilings or updating fixtures. These repairs can be some easy wins for the seller and potentially help the sale close quickly or even sometimes for a higher price. However, other repairs, such as a new roof can be very expensive and don’t help the house show any better to a prospective buyer. If your house needs some more substantial repairs that fall into this category, you may want to consider selling your home as is.
Poor Return on Investment (ROI) for Home Repairs
According to the research, making home improvements so that your home will sell for money will never yield the desired results. You may often hear real estate agents tout that houses will sell for more money with an updated kitchen, while it’s true that it will likely sell for more money than an outdated kitchen, you need to factor in the money you had to invest in updating the kitchen in the first place. According to a report from Remodeling magazine, an average minor kitchen remodel costs $23,452 and improves the resale value by $18,206. This means that you are only getting back 77 cents on every dollar you spend, not counting any of the hassle associated with hiring a contractor and living through a remodel of your home.
Is Selling my House As Is Right for Me?
When evaluating whether you should sell your home as is, it is important to think about the following common reasons for selling a home as is:
The house is outdated, though perfectly functional
While you may have been living in your house for a while and it has no specific issues, if you have not kept up to date with modern trends, it will appear very out of date. The kitchen and bathroom are often the key areas where this will show, and unfortunately, they are also typically some of the more expensive renovations to perform.
While the house is technically “move in ready,” a prospective buyer will look at the house and realize they will have to redo the kitchen, bathrooms, etc. which quickly adds up to tens of thousands of dollars. Instead of trying to find a buyer who is willing and able to put that work into the home after buying it, this is often an ideal scenario to sell a house as is.
The seller doesn’t have the time or money to invest in correcting the defects
Performing repairs on your home requires some significant resources – both Time and Money. If one of these are lacking because perhaps you are in financial distress, you need that money to purchase your next house, or maybe you have relocated for a new job and don’t have the time or want to deal with the hassle of managing the repairs, then selling your home as is can be a great option.
The buyer is likely to perform renovations on the home
Sometimes you may know that your home will undergo major renovations or even a tear-down by the new buyer. This can happen for reasons such as the home being very outdated, having a poor layout for most families, or maybe the other houses in the neighborhood have been torn down and rebuilt much larger. In this case there is no use wasting your money on repairs if the home may be torn down anyway.
The seller hasn’t lived in the house and in unaware of the issues
Some homeowners inherit the house that they are looking to sell and may not be familiar with the work required. This lack of familiarity with the issues enables the seller to sell the house as is with no disclosures of known issues (which are required to be disclosed if known), and can make an as is sale a great option.
I Don’t Want to Sell my House As Is, What Repairs Should I Do?
As we mentioned, the return on investment (ROI) of individual repairs do not yield a positive return in terms of the sales price. However, with the largest group of buyers now being Millenials that are looking for move-in ready homes, these repairs may make the difference between finding a buyer at all and will likely decrease the time you spend looking for a buyer. If you have decided that selling your home as-is, is not the right option for you, here is a list of 5 improvements that you should make before selling your home:
- Replace broken windows, fixtures, toilets, etc.
- Repaint the interior with neutral colors
- Replace old or broken appliances
- Replace old carpeting
- Repair holes and cracks in walls and ceilings