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Selling Homes in Poor Condition
If your home has substantial structural or aesthetic issues due to dangerous wiring and plumbing, leaky roofs and foundation cracks, lead or asbestos materials, or outdated HVAC systems, you may have a rough time trying to sell it. Not only will the repairs be costly, but you may not be able to find someone who would be willing to take the property off your hands. Most traditional homebuyers are unwilling to invest the extra time, money, or added frustration in a home that requires extensive repairs in order to make it livable.
Additionally, if a buyers’ agent discovers that your home needs major repairs, they may try to give you a lowball offer, such as in Arizona’s Phoenix Metro Area real estate market. Here, the market is highly competitive, and home buyers’ standards are higher than the nationwide average.
You will need to find an accredited, experienced as-is buyer who will help you get the best value for your home. We recommend Sell My Houser.
However, if you want to sell your house using a realtor on the traditional market, there are some important points you will need to keep in mind.
Selling a House in Poor Condition
If you know that your home has major issues that will require more than minor cosmetic repairs and some cleaning, you will need to get some competitive quotes from several contractors so you can come up with a cost-benefit analysis to help you determine whether it would be worth your while to make the repairs or not. The contractors need to inspect the entire property. You should also call a wide range of different-sized companies to give you quotes.
Selling homes that need extensive work to make them habitable or to bring them up to code requires you to invest a lot of money and time. You will also need to undergo additional inspections and obtain numerous local permits. Renovation loans may cover some of your expenses, but they have a negative impact on the amount of profit you will end up netting for the property.
It’s recommended that you research the real estate market in your area to ensure that your property is being compared to others that are in similar condition. Don’t base the assessed value of your home on properties that are in better condition. Doing so will give you a misleading understanding of the true value of the house. If there are any comparable homes in your neighborhood that don’t require repairs or renovations, you will have a more difficult time selling your home for a fair price.
The first question you need to ask yourself is what your objectives are as a seller. Do you want to get the most value out of your home as possible? Are you looking to unload the property quickly? Buyers always have their own objectives in mind when they are shopping for a home, and purchasing a house as-is is the last thing on their minds. You need to become familiar with the problems your home has, as well as how much time and money it will cost to make the necessary repairs and fixups. This will help you anticipate any concerns a buyer may have with the property.
The Problem with Selling a House in Bad Shape
It’s not easy to sell a house to begin with, especially a house that has a significant number of challenges and problems staring you in the face. You will need to prepare yourself for the following problems you will likely encounter when attempting to sell a property in disrepair:
Depreciation: One of the most difficult problems with selling a home in poor condition is that you will end up in a no-win bargaining situation with buyers, as well as their agents. You won’t receive many bids if your property is in bad shape. In most cases, you will be lucky to receive one offer. When it comes to deciding on a fair price for the home, you may be out of luck.
Reluctance on the Realtor’s End: Real estate agents earn a commission from each home they sell, which is why they are primarily driven to sell homes that are in decent shape or can be sold for a fair price that rewards them for the time they spent marketing it. If the home you are selling needs extensive work, most real estate agents may be hesitant to sell it, or will not devote much of their time to helping you sell it.
Delays: If you have ever had contractors work on your home, you already know that the jobs take twice as long and cost double the amount of money you planned on spending. The extra cost is bad enough, but selling delays are equally risky. Because Southern California’s real estate market moves quickly, buyers won’t wait for you to finish any repairs or renovations that may need to be done on your property.
The more time you spend selling a home in poor shape, the more money you will end up spending in the long run. If you decide not to make any repairs to the home and sell it as-is, you will need to prepare yourself for a lot of delays. On average, an as-is property can take up to six months or a year to sell compared with properties that are in better condition.
Determination Factors of Homes in Poor Condition
There are some inexpensive repairs that can help you sell your home quickly and easily. Certain repairs can be made by the homeowner such as cleaning, repairing broken windows, replacing carpets, and painting. On the other hand, there are other projects that require a homeowner to contract with an insured, licensed professional.
The following is a list of warning signs that indicate a home is in bad shape:
- Roof Repair/Replacement: Old, damaged roofs, including flashing and underlayment can cause water damage which can lead to overall structural damage of the property.
- Plumbing: Pipes made from toxic materials such as lead must be replaced, along with older pipes that are at risk of bursting and causing mold growth and water damage.
- Electrical Wiring: Bad or old wiring in a home can be a serious fire hazard.
- Damage to Foundation: If the home’s foundation is in need of repairs, it may need to undergo piering and jacking – a very expensive process.
- Structural Damage: Fire, earthquakes, and flooding can produce visible holes and cracks, along with damage to roofs, foundations, floors, and load-bearing walls.
Evaluating a Property’s Condition
A simple inspection can often tell you whether a home needs major repairs, but there are some particularly dangerous and costly problems that may not be visible to the naked eye. You will need to find several licensed, experienced inspectors to inspect the entirety of your property and have them tour your home at different dates and times. Make sure that they check your crawl space or basement, chimneys, roof and attic, and any other structures that are part of the property but not the actual home itself.
You can use the inspection reports to obtain quotes from several contractors so you will have a better idea of how much it will cost to make the necessary repairs and renovations that need to be done. In order to draw up a cost-benefit analysis, you need to get as complete a picture as possible of the work that needs to be done on the property.
After you have inspected your home, received quotes from several contractors, and made the decision to sell it as-is, you should use the inspection reports to prepare for any complaints a buyer may have about your property. The contractors’ quotes will prepare you for the monetary value these concerns may end up costing you.
Selling a home in poor condition is a risky venture, not to mention slow and expensive. If you want to get the best value for your home, Sell My Houser is a great option to sell my house fast. We’ll provide you with a hassle-free offer for your property without costly negotiations for repairs, and you’ll be able to close between 10-14 days in Phoenix, Scottsdale, Chandler AZ, Gilbert, Ahwatukee and Queen Creek.