Should I Fix Up My Home or Try to Sell It As Is?

Costly Repairs Posted on December 10, 2019 Posted by Phil

You have an unexpected life crisis and need to sell your home in central Texas. Perhaps you’re behind on payments and facing foreclosure, or you’re going through a divorce, or you need to relocate for a new job, or even worse, you just lost your job and are now unemployed. Whatever the particular unfortunate situation may be, the end result is that you need to sell your home fast. There is another problem to be considered, however.  What if your home isn’t in the best condition and needs repairs before you can sell? Improving your home’s condition can be costly, especially for major repairs like a new roof, a new HVAC unit, a new foundation, new plumbing and electrical work, or foundation repair. The question is:

Should I Make Repairs to My Home Before Selling it Or Should I Sell it As-Is?

The short answer – it depends. Not to worry though, this article will help you decide which option is best for you; especially if you need to decide quickly on how to sell your home fast.

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Do I Need to Fix Up My Home To Sell It?

If you have the time and have the money, then you will generally be better off paying for the repairs yourself because most buyers prefer to purchase a house that is move-in ready instead of a fixer-upper. People are looking for a place where they can spend time with their family, entertain guests, or just relax. If the house is a fixer-upper in need of a lot of work, buyers will see right past the home’s excellent qualities and instead will become easily overwhelmed and by all of the problems. Most realtors say that home sellers have 10-seconds to convince a buyer: 5-seconds from the curb and 5-seconds from walking thru the front door. Even more shocking, 6 in 10 potential buyers will rule out a home before they even walk through the front door. However, make sure you don’t go overboard with the repairs and follow a rehab plan.

FixerUpper4Cash PRO-TIP: prioritize making home repairs to the spaces that people can see and associate with high home values – which are, surprisingly, where we spend the least amount of time – the kitchen and bathrooms. Do not worry too much about your HVAC system, plumbing and electrical systems, foundation, or roof. Only repair these items enough to pass an inspection or if there’s a life safety concern.

If you do decide to make home repairs before selling, just know not every home renovation offers a great return on investment. In fact, most upgrades that you make end up costing hundreds or even thousands more than they’re worth so choose renovations that make sense, cost-wise. Use this helpful rehab guide to maximize your return and to avoid those that don’t. Numbers are based off a typical 1,800 sq. ft. home:

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Sell Home in “As-Is” Condition

Let’s get real for a minute. If you need to sell your central Texas house asap to escape financial hardship, then you obviously don’t have the time nor the money to make the repairs to the house yourself. So what do you do? It’s really quite simple. You sell the house in “as-is” condition by significantly lowering the price. This is where you need to put yourself in the buyer’s shoes. Let’s use an example to better illustrate this point.

Let’s assume you’re needing to sell your home in As-Is condition between Temple and San Antonio. It is 1,500 square feet and would be worth $200k if it was in good condition. However, it needs a new roof and a new HVAC unit. It’s also outdated and needs new flooring, cabinets, countertops, and appliances. You don’t know how much these repairs will cost, so you obtain estimates from 3 general contractors, and all the quotes are around $40k, which you don’t have. You might be thinking that you could list your house for $160k ($200k-40k). Nope, not a chance. Think about it. Why would someone pay $160k for a house that needs $40k in repairs when they could just buy one for $200k and not have to deal with the hassle? The buyer pool for a fixer-upper house will be limited to central Texas real estate investors who will need to buy the house at a price which still leaves them room for profit once they’ve fixed it and sold it. A realistic sale price would be around $100k.

FixerUpper4Cash PRO-TIP: Real estate investors in Killeen or San Antonio will buy houses for 70% of a home’s all-fixed-up value minus the repair costs.  Let’s break down this principle using the example above:

After repair value (ARV) x 70%:  $200,000 x 0.70 = $140,000

$140,000 – repairs ($40,000) = $100,000 final sale price

To most people who own a fixer-upper house they need to sell, this may not only sound crazy but also a little unfair. Using this formula, however, will net the investor just 10-15% profit which is not much at all when considering all the risk.

Tip to Sell House Fast

As you can see, there are pros and cons to making repairs to your home before selling it or when selling it “As-Is”. If you’re not in some dire situation and you have a lot of cash on hand, then making repairs to your house before selling it will probably be the most advantageous. However, if you are distressed and need to sell your house asap in San Antonio (or Killeen and anywhere in between), then by default you’re probably better off lowering the price and selling it in “as-is” condition.

If you would like a free home evaluation, please contact FixerUpper4Cash. We are happy to provide you with comparable sales reports and other resources you’ll need to make an educated decision regarding the sale of your central Texas home.