The Ultimate Guide To Selling A House That Needs Repairs
Monty Schmidt, Nor Cal REI
I wiggled the cabinet door. It looked like it was hanging on for dear life on just 1 hinge. As I walk across the kitchen I could see the floor halfway peeled off. 3 broken windows that were boarded up and graffiti all over the walls. That’s just the start of it.
This place needs work.. Serious work.
This is the kind of stuff I see on a daily basis.. It’s my job.
Homeowners ask me all the time: How am I supposed to sell a house that needs repairs? As I walk through the house I always tell them the same thing.
For the first time, I wanted to go deep into how to implement these options when selling a house that needs repairs.
Here’s what you need to know.
Before you jump in, you need to figure out what is the most important thing to you regarding the sale of the house.
Do you want the highest price? Selling it as soon as possible? Or making this sale as easy as possible.
Option #1 making the repairs and listing with an agent
If you don’t mind putting in the extra work, selling with an agent can be one of the best ways to get the highest price for your property.
There’s work that needs to be done.
The first place to start is with getting the estimated cost of repairs.
Ask a general contractor to walk through the house to determine exactly what type of work needs to be done to the property. Most contractors will be able to give you an estimate free of charge, but it isn’t always the best one. Find someone you can trust to be realistic with you and give you the correct numbers.
As a flipper, I know that there are a few cost effective repairs I can make to dramatically increase the value of my property.
- Bathroom: Replace Vanities and tile
- Kitchen: Countertops and cabinets. (I will usually have the tile cleaned if they are not in bad condition, otherwise I will replace it)
- Bedrooms: Replace Carpets / New flooring
- Interior/ exterior paint
- Installing new shingles over the existing roof
- Repairing or replacing the HVAC
- Changing the water heater
The cheapest way to get it fixed without breaking the bank
If you’re on a budget and looking to sell on the market, there’s a strategy I use to reduce the cost of repairs and still get quality work done.
- Buy your own materials- Don’t rely on contractors to buy whatever they think will look nice for any price they want. Find local mom and pop stores that sell specific materials at low costs. That way you can pick out the design you want and know exactly what you’re paying for.
- Hire subcontractors – Find subcontractors who specialize in the work that needs to be done. Not only will they do a better job than someone who does everything, they will generally be cheaper. The only thing is that you will have to manage them to make sure they are on time and do a good job.
- Multiple bids – You would not believe the difference in bids I’ve gotten on the same exact job. Get at least 3 bids and let the others know you’re doing so or you will most likely pay a premium.
Finding an agent that can get top dollar
Once you have the house looking fresh, it’s time to find a real estate agent or broker who knows how to get top dollar for your house.
Look around and ask for recommendations to find out which agents have the lowest days on market for their listings.
Not every real estate agent is the same no matter what anyone says. I’ve seen perfectly nice homes sit on the market for months all because the agent didn’t know how to properly advertise the property and negotiate with other buyer agents. In a seller’s market, it shouldn’t take more than a few weeks to have a buyer in escrow unless there’s something wrong with your house.
The benefits: You get the highest and best price for your house because you are selling to a traditional buyer.
The negatives: You have to spend money to make repairs, walk people through the house to find a buyer, and can take an average of 30-60 days to close on the property.
How To sell a house that needs work fast
You may be thinking..
My home needs lots of work, I just want to sell it as-is as quickly as possible. What Do I do?
#2 Sell to an investor buyer
Real estate investors are known for buying houses in any condition imaginable. They pay cash, close quickly, and buy the house as-is. The difference between selling to an investor and the other options is that you’re selling directly to a buyer who is very flexible in their offer.
Most investors are great are creating win-win transactions if you some sort of problem with the house. Like any service, you have to pay a price. In this case it would be by selling the house at a lower price.
I always tell homeowners this before they decide to sell with us:
You’re paying for a service by exchanging a portion of your equity for a fast and easy transaction that you won’t get from listing with a realtor.
So what’s the bottom line?
If you just want the highest price for your property and you don’t mind waiting, investing some time and energy into making your property look good, then listing with an agent just might be the right solution. However if you’re looking for a fast, easy, and hassle free sale, than selling to an investor like Nor Cal REI may be the best fit for you.