Should I consider making repairs to my house so it can be in an agreeable condition for the buyer? How much should I spend on repairs?
I am upfront with my sellers when it comes to selling their home as-is. I like to get the estimates right away so they know how much repairs will cost. And if they choose to go with as-is, I make sure they understand that the sale of their home might take longer.
Do all major repairs or do none of them
It depends on the price range of the house. For example, if the range of the house is 1M-1.5M, here is one possible advice: spend only up to $10,000 on essential repairs such as roof and painting. If you only choose to do one thing, it’s not worth to do the repairs. It’s like cooking and forgetting one ingredient. Also getting the estimate right away is ideal since sometimes, sellers are hesitant that one repair might cost $5,000 but in reality it’s less than that and within the budget.
All Cash or Longer Days on the Market
It can be a challenge to sell a home to buyers as-is. Banks financing a loan on an as-is property before approving a mortgage will require certain repairs be made. If neither buyer or seller is willing to do those repairs then the deal can fall through thus the home will be on the market longer and the seller risk lowering the price even more.
Also mention of as-is can deter at least 90% of potential buyers because as-is can depresses the value of the house, most buyers are busy Silicon Valley high tech professional. They are hesitant about the following: Can they handle the home repairs? Will they have time to do the repairs? Can they budget enough money for the expenses? Another option is to sell to an all-cash buyer, usually those are hard to come by unless you or your realtor has a big network of all-cash buyers or investors.
Disclosing “as-is” in Marketing?
In terms of marketing an as-is home, I emphasize the strong points of the house and avoid the description of “as-is.” I indicate to buyers to also look at the reports (Home and Termite Inspection Section 1) of the house so they are aware of the repairs the house may need. I also provide them with comparables of newer homes so if they choose to tear the house down, they will have an idea of how much their investment is worth.
One of my clients who rented out his house for many years, decided to sell the home as-is. In his case, it did not make sense to do repairs since he is doctor with a busy schedule and the expenses would not give him back more than what he invested in the house. It turns out that house was sold as-is over the listing price. I made sure that the buyer could close the as soon as possible (15 days) and offered a big down payment to avoid financing issues with the home.
I encourage sellers get estimates before choosing to do repairs. Then commit to a budget. Most important, always provide the necessary disclosures for buyers.