Selling a House That Needs Repairs

house needs repairs

If you’re getting ready to sell your home, you’ll need to decide which repairs and upgrades must or should be done before you put your home on the market.

What buyers will overlook when it comes to needed fixes and updates may depend on your home’s location. If your home is showing a little wear but is in a desirable neighborhood, potential buyers may be willing to take on projects after a sale. However, many buyers are unwilling to take on a fixer-upper.

Easy fixes can make a difference: neutral paint throughout, having carpets cleaned by a pro, or replacing light bulbs. Mowing the lawn and clearing out clutter cost you little more than your time. But be wary of significant remodels that are too taste-specific – and don’t overspend for your neighborhood. Remodeling one room while ignoring the rest is also a no-no before putting your home on the market.

Educating yourself about federal and your state’s real estate laws regarding repairs and disclosures and understanding which renovations or remodeling projects will show the best return on investment can make or break a sale.

Home Inspection Report is Not a To-Do List Item

Whether a home inspection is completed before you put a house on the market or after you receive an offer, you don’t have to fix everything in the report. For example, cracks in the basement floor are typically not structural, so you shouldn’t be required to repair them.

If you don’t make repairs, a buyer may refuse to continue with closing the sale until you make repairs. A buyer may include contingencies in the Real Estate Purchase Agreement. A buyer can cancel an agreement if an inspection finds material defects. Contingencies might include that the seller make repairs to foundation, walls, support structures, roof, water and electrical systems, and plumbing.

However, if a home inspector tells you of an issue, you’ll likely have to disclose it. What you don’t want is a neighbor telling the buyer about the problems you or the previous owner have dealt with but didn’t disclose.

Disclosure is Required

Keeping unresolved, serious structural, and safety issues secret from a buyer could land you in court after the sale. Disclosing what you know needs fixing or replacement can keep you out of trouble.

The federal government requires that homeowners disclose any lead-based paint issues in homes built before 1978. However, most laws governing real estate sales are at the state level.

It’s essential to understand your state’s disclosure laws before you put your home on the market. In most states, it’s illegal for homeowners – and home sellers – to deliberately hide issues of which they are aware. California, for example, has very detailed disclosure laws. Some states require you to disclose whether someone has died in the home.

Some common disclosure state laws include:

  • Water damage and mold
  • Roof leaks
  • Basements flooding
  • Pests such as termites

Not disclosing can ruin a sale: buyers can request a Comprehensive Loss Underwriting Exchange (CLUE) report that details home insurance claims for the last seven years. If the report lists issues you didn’t disclose, your buyer may back out of a sale because they are worried that you’re hiding more problems.

However, disclosure doesn’t necessarily obligate home sellers to make repairs.

Repairs You Often Must Make

Your buyer’s financing may depend on you fixing certain serious issues. The lender may ask you to pay for electrical or plumbing issues or a new roof before the buyer gets the loan. If the buyer can’t get a mortgage, they can’t buy your house.

Other repairs that you may be asked to do include:

  • Building code violations
  • Structure defects: foundation, walls, support structures
  • Termite damage
  • Bats or squirrels in an attic
  • Leaking roof
  • Outdated or unsafe electrical wiring
  • Water supply issues, such as a well
  • Electrical systems
  • Mold and mildew
  • Broken pipes or major plumbing

Repairs You Should Probably Make

Curb appeal is vital in 99% of all home sales. Spending time and money to clean up landscaping, put down new mulch, trim dead tree branches, and painting the front door can make the difference between a drive-by and showing. If you no longer live in the home, pay someone to keep up the exterior.

Repairs that might save a sale include refinishing scratched wood floors and replacing dirty, old carpets. By not replacing drywall on a water-stained ceiling, you may signal buyers that there has been a plumbing issue.

Renovation Return on Investment

Americans spend about $400 billion annually on home remodeling. Still, 35% of homeowners would rather move than remodel. That’s according to the 2019 National Association of REALTORS® Remodeling Impact Report.

Some repairs and upgrades can save a sale – or attract new buyers. Understanding which shows the best return on investment can save you time and money. Not sure if a repair or upgrade is worth the time and expense? The Remodeling Impact Report details the typical costs of nearly two dozen common remodeling projects.

The 2019 Remodeling Impact Report noted remodeling projects that top the list of appeal to buyers:

  • Kitchen renovation
  • Kitchen upgrade
  • HVAC replacement
  • New wood flooring

Even though these projects appeal to buyers, you may not want to spend the money due to the low return on investment. For example, you can expect to recoup only 52% of that pricey kitchen upgrade and 59% of a complete kitchen renovation.

There are remodeling projects that do hold their value. These include:

  • New wood flooring, with an average 106% ROI
  • Refinished wood flooring, with an average 100% ROI
  • HVAC replacement, with an average 85% ROI
  • Insulation upgrade, with an average 84% ROI

Kitchen upgrades might appeal to buyers, but homeowners will likely recover only 52% of the costs when the home is sold. ROI on a complete kitchen renovation is slightly higher at 59%.

Some experts advise waiting until negotiation over repairs to discuss whether appliances will stay, for example.

Exterior projects that appeal most to buyers include:

  • New roof, with a 107% ROI
  • New garage door, with a 95% ROI
  • New fiberglass or steel front door, ROI at 75% and 74%, respectively
  • And new vinyl siding, at 63% ROI

Sell Without Making Repairs

If you don’t have the time or money to make repairs, you can lower your asking price and advertise it as a fixer-upper. Home flippers might be interested or DIY-ers willing to buy a home they can customize. Check whether your city offers renovation and remodeling incentives in your neighborhood. If so, be sure to include that in your property description.

When you’re in a hurry to sell – such as when you’re moving for work or divorcing – you may not have time to make repairs. You may not want to spend the money to do repairs or upgrades due to illness or job loss. If you’ve inherited a house you have no interest in dealing with, other than to sell, spending money on repairs may seem a waste of time.

If you want to sell our house without making repairs, we can help.

As the largest cash home buyer in Maryland, DCVirginia, Pennsylvania and Florida, we will buy your house as-is; No repairs, No upgrades, No home inspections.  You will have a firm cash offer and you can close on your timeline.

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