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In this article, we will discuss how to sell a house that needs work, focusing on homes in distressed conditions, such as neglected homes or inherited properties. If you want to sell your house fast but are unsure how to proceed, don’t worry. We will explore all your options and outline the exact steps you need to take.
What Kind of Repairs are Required?
Repairs can be divided into two categories: significant repairs costing thousands of dollars or minor care, maintenance, and cosmetic updates. Depending on the extent of the work required, you have two options: finance the repairs or sell as-is.
Best Way to Sell a House that Needs Repairs (Minor Cosmetic Upgrades)
What is the current condition of your house? If you only need to update appliances and the overall appearance, you can rehab the house on a budget. Consider:
- Painting and patching walls
- Cleaning and repairing countertops
- Cleaning or buying new carpets
- Replacing caulking
- Updating bulbs and lighting fixtures
- Landscaping
Most real estate experts recommend handling minor repairs. You can get a loan to renovate the house yourself. Though it’s a bit complex, we will look into the available methods.
How to Finance Home Repairs?
You can get a loan from a private money lender, your mortgage lender, or refinance your current mortgage. Applying for a renovation loan allows you to rehab your house and then list it for sale.
Getting a mortgage and repairing the house will take a couple of months. Lenders will consider your credit score and the property value. Let’s say the current value of your property is $280k but if you invest $25k in repairs, the house could sell for $330k. In that scenario, you can qualify for a renovation loan, and you can sell the house after renovation.
You can also sell your home as-is. List your home “as-is” on the MLS or work with a direct cash buyer and qualify for an immediate cash sale.
Best Way to Sell a House that Needs Repairs (Significant Work)
Now here comes the challenging part. What if your house requires major repairs? In such cases, listing your home on the MLS is not feasible. Most buyers won’t bother contacting you because everyone is looking for a move-in-ready house. Serious home repairs include:
- Structural issues
- Termite, pest, and mold damage
- Asbestos
- Damaged roof
- Water problems, including the failure of boiler or water heater
- Outdated electrical wiring
- Septic tank problems
- Plumbing issues
- Problems with home foundation
- Zoning Issues
- Code violations
Most buyers will avoid a house requiring significant repairs. You have two options here. You can look into home renovation loans to rehab the house. Or sell directly to a cash home buyer like Home Buyer Connection. We don’t recommend the first option for homes requiring significant repairs and here is why:
Handling a Full-Scale Renovation Requires Expertise
Once you start the work, you may uncover hidden issues. Renovating a home can cost more money than initially expected. And you are making a bet against your home’s future value. You believe that your home will sell for a high price after you have made all the repairs. That’s not exactly true.
Most home renovation projects don’t bring a 100% ROI. A full-scale kitchen remodel has an ROI of 75%. Plus, there are selling expenses too. You will need to pay for realtor fees and closing costs and provide a contractor’s warranty for all the work you did in the house. You need to disclose your home’s current condition and all the improvement work you did.
It doesn’t make sense to renovate a house requiring significant repairs. It’s best to sell your home in as-is condition. Your home will sell for a lower price, but you don’t have to spend any money on it.
How to Calculate Your ROI for Repairs?
You can contact an expert real estate agent for guidance about the required repairs and the return on investment. Some agents might overestimate the home’s value after renovation. Stay realistic and look at the prices of all the renovated homes in your area.
Let’s say a typical renovated home sells for $400,000 in your neighborhood. Your home requires work worth $45,000. You can expect the house to sell for $400,000 after the repairs. Suppose your house sells for $400,000. Subtract 10% for commissions, closing costs, and selling expenses. You are down to $360,000. Now subtract $45,000 from this number. You get $315,000. You will need to consider the interest rate if you are borrowing money to finance the repairs. You will get $315,000 after spending money and handling repairs. Is there a better way?
Can You Sell Your House Fast in as-is Condition?
Yes! There is a better way. You can sell your house fast to a direct home buyer like HomeBuyer Connection. We buy houses as-is in Winnipeg, MB. If you are interested, we can give you a cash offer within 24 hours. Talk to our experienced team and we will give you a no-obligation, fair cash offer. There are no fees or hassles when you work with us. You don’t have to spend money on repairs or pay real estate commissions. You can just sell your house for a guaranteed cash price and be done with the process. No stress, headache, or delay.
Schedule a free consultation with our experienced team. We will guide you through your home’s fair market value and the next steps.
