Some people don’t believe that remodeling can boost up home value, but with doing so, they are missing out on a huge opportunity. Even in the past, homeowners were afraid of statements like: “The real market is in a decline”, “There is no return from remodeling investments”, however, some of the homeowners who invested in fixing up their properties managed to gain significant profit on selling day.
Having in mind both standpoints, the question remains: Should I fix my property or sell it as is? Read below to find out more.
WHAT IS SELLING A HOME AS IS AND WHAT ARE ITS BENEFITS?
If you decide not to invest in repairs before selling your home, you will be selling it as-is. Whether because of a new job opportunity or suspicion of foreclosure, selling as-is is usually done by homeowners who are rushing to move out. Other common scenarios are when a property is beyond salvation or when the home sellers can’t afford to repair complicated issues.
There is no legal obligation to fix your house before selling and everybody has the right to sell their property as-is. Here are some other reasons why people decide to do it:
- Involves less planning than pre-sale renovation
- Possibility of cash offers from buyers
- Can help you through a difficult financial situation
THE DISADVANTAGES OF SELLING AN UNFIXED HOME
Even though selling the house as-is can prove advantageous for some home sellers, the entire process can easily become a real hassle. First of all, selling as-is is a legal procedure involving a ton of paperwork. If you decide to sell your house in its initial condition, you and your realtor will have to disclose in writing every single issue that is known.
In addition, you will also have to make a deal with the buyer which will prevent any repairs until the end of the transaction. Apart from taking part in legal jabber, other cons of selling as-is are:
- Difficulty finding buyers
- Constant bargains and negotiations
- A lot of home inspections
- High possibility of a low-cost sale
WHO IS BUYING AS IS?
Homes that are sold as is aren’t usually bought by the regular family. Instead, they are sought after by property flippers. Another smaller group of buyers that might be interested are millennials who don’t have a large enough budget to buy a move-in ready property.
Having multiple groups of potentially interested buyers can falsely lead a lot of homeowners to sell without making any repairs. However, according to Elizabeth Weintraub, an article writer for The Balance, sellers can lose a lot of money since the buyers of fixer-uppers might devalue the property simply because of inconvenience.
For example, a seller with a home that has a crooked roof and is worth $100,000 will usually lower the price to $90 ,000 so that the buyers would have enough budget to replace/repair the roof. In that case, an experienced flipper will ask for an even lower price, let’s say $75,000 (even though fixing the roof will only cost around $10,000).
The smartest thing a home seller can do in such a situation (if their budget allows it, of course) is to spend $10,000 to fix the roof themselves and sell the house for the initial price of $100,000, conveniently saving $15,000.
WHAT ARE THE PROS AND CONS OF PRE-SALE RENOVATION?
Contrary to selling as is, pre-sale renovation is for everybody who is looking to maximize profit. According to experienced realtors, even smaller upgrades like landscaping and repainting can increase a property’s value. However, to succeed at this, one must be prepared to do a lot of research.
Knowing your neighborhood’s market value, the average ROI of remodels, and recent real estate trends is essential for succeeding at your pre-sale remodels. That is why most home sellers seek outside expert advice. To start digging deeper into this subject, here are the pros and cons of pre-sale renovations you should definitely know:
PROS: Maximizing profit, gaining real estate experience, attracting more buyers, having an upper hand on negotiations, increasing chances for making a deal.
CONS: Time and effort, the possibility of making the wrong investments, unexpected fixes and spending more than your initial budget, possibility to overcapitalize.
THE MOST PROFITABLE REMODELS
There aren’t any general rules when it comes to choosing the right remodels. Yet, there are some useful facts you should know about. For instance, a study by the Joint Center for Housing Studies at Harvard found out that American home buyers are starting to gain a lot of interest in energy efficient products and appliances.
In the meantime, real estate experts still witness how curb appeal upgrades, kitchens, bathrooms, and smaller cosmetic makeovers have more influence on buyers than energy efficiency.
FIXIMIZE offers pre-sale renovations with no upfront costs! Our experience in the real estate market has resulted in tons of satisfied customers who managed to increase their home’s value even with smaller remodels.
Contact your listing agent and schedule a free estimate today. Find out how you can leverage FIXIMIZE to maximize your profit before selling.