Some homeowners get the fortune of having their house sold within 24 hours, while others hustle for years to get the buyer’s “yes”. You might have read and listened to plenty of “secret formulas” to get your home sold fast, but in truth, it isn’t easy to pin down an absolute strategy that guarantees the quick sale of a house, especially when a lot of factors come into play — market situation, location, timing, competition, buyer’s experience when transacting with you, and house condition to name a few.
In this article, we brush through some of the elements surrounding the sale of a house in poor condition, so you have an idea of how to start and weigh your options.
What Is a “Poor Condition” House?
When it comes to selling a house in poor condition, it is important to be aware of what’s putting your home in bad shape. It’s how you determine depreciation, decide whether to fix or sell as-is, calculate the budget you’re going to set aside for repair works and find a realtor who’s open to working for a lower commission than selling good condition houses. For example, if you have a damaged foundation, your home’s value may be 10%-15% less than the value of all other similar houses with an intact foundation.
There are different ways to define poor condition homes. It can be extensive structural damages, severely broken systems (electrical, HVAC, and plumbing), deferred maintenance, widespread infestation, and outdated design. According to Hoffman Home Inspections, in their experience, the seven most common factors that push buyers away include:
- Severely Damaged Roofing
- Weak Foundation
- Multiple Code Violations
- Presence of Asbestos or Lead
- Termites that have damaged a lot of the structure
- Black Molds
- Knob-and-Tube Wiring
Nevertheless, the notion of a house being habitable and inhabitable can be subjective; that’s why professional home inspection reports are only there to help sellers and buyers negotiate the price.
To Fix Or Not To Fix?
Whether your home is in great condition or not, you always have the choice to sell it as-is or sell it after you repair it. You can have your home listed on the MLS for retail buyers; if not, there is also a market for fixer-uppers where you can still get a reasonable offer. The important thing here is, when deciding whether or not to fix your home before selling, you need to make sure that you’re not going to be losing more money, time, and opportunity than what you actually receive as payment.
Know Value VS Spending Cost
Let’s say your home’s appraised value is $300,000; your contractor comes and says the total price for the repairs you want is $19,000; then you’re in a cold market, and your realtor says the highest sale price you can set for your home is only $240,000; and out of that $240,000, your projected equity is around $15,000. Do you think it would be wise to proceed with all the $19,000-worth of repairs? No — it doesn’t even break even.
So before you say “yes” to your contractor, make sure that your equity can cover the total cost of presale repairs or just consider selling the house as-is instead.
Know Market Conditions
In a hot market, homes sell fast because there are plenty of buyers who compete with each other just to get the house they want. However, in a cold market where inventory is high, and buyer demand is low, buyers might not even think about looking at a home that needs a lot of work. You have to identify whether your area is experiencing a seller’s market now or a buyer’s market. If it’s a buyer’s market, then you may want to consider fixing your home first.
Consider Low-Cost, Cosmetic Fixes
Many of the people who choose to sell their house as-is are those who don’t have the budget to get the house repaired before the sale. That’s why thousands of low-cost, D.I.Y home renovation tips have surfaced through the years. If you don’t have the budget and don’t want to do the renovations yourself at the same time, you can explore presale renovation companies that basically cover 100% of renovation costs with a guarantee that the seller will pay them the full amount once they’re able to sell the house. This way, you can have your home fully renovated and get more value out of it without spending a single dime.
How to Market a House in Poor Condition
Whether you are going to sell your home as-is or make small repairs, don’t be discouraged with the condition of your home and stay as realistic as possible. Don’t be afraid to post pictures of damaged areas; at the same time, don’t forget to advertise what’s good about your home.
Highlight What’s Good
First impressions matter and people are highly responsive to what they hear and see. If you have a lot of bad news about your home and show more of them than the good, your buyer might feel reluctant about it. That’s why it’s important that you identify the value your buyer gets from your home.
Some people prefer to hear or see the bad things first before the good because it reduces worry. So every time you introduce a buyer to a structural damage, for example, make sure that you have something good to counter it afterwards (like they don’t have to spend as much with demolition works or sort if they plan to renovate).
While it’s true that honesty goes a long way, and you’d want your buyers to trust you by disclosing everything about your house, it would be best not to be carried away with how your house looks now. Instead, help your buyer imagine what the house can be.
Identify What Concessions You Can Make
In a negotiation, buyers will always test you by asking for the most benefits. This includes a lower price and additional concessions. It wouldn’t be wise to turn down your buyer’s requests 100%, especially when there’s no bidding war. So before listing your house, try to determine what types of concessions you can afford and are willing to shoulder for your buyer. By that time, your buyer asks, you already have an idea about what you can say “yes” or “no” to. Moreover, you can also put the concessions you’re willing to give to your buyer on your listing or advertisement.
Pre-Sale Inspection and Repair Estimates
Getting your house officially appraised before listing will show your buyers that your price is based on reliable estimates. This also shows how much of a motivated seller you are, and your buyers won’t feel the need to look for other quick sellers.
Navigating the home selling process can be difficult, especially when your home needs a lot of repairs. That’s why HomeSold GA is here to connect you with the right buyers and help you through the selling process while getting the most value you deserve. If you need help selling your Georgia home today, call us at 770-668-4888.