How to Sell a House in Poor Condition
Selling a house in bad condition can mean the difference between a quick sale and having to hang on to your home. It is important that sellers take the time to properly assess their property and list it in the most advantageous way. A property in poor condition can require major maintenance, minor cosmetic corrections, or just be practically uninhabitable. Selling a house as-is typically means the seller is responsible for making whatever required repairs prior to listing. Many home owners who make necessary repairs should examine the entire prospective ROI to make sure the sale price of their home is going to increase over the cost of repairs.
When considering how to sell a house in poor condition the main issue is making it appealing to buyers. Most buyers are looking for immediate investment and home equity. They are not concerned with whether or not the home has a higher price tag, they are interested in getting the highest price possible without having to fix the problems they see.
Since most buyers are not concerned with how the house looks, there is not much incentive for the seller to make repairs or make cosmetic repairs prior to listing. If you have decided to list the house with cosmetic or basic repairs it is imperative that the buyer know the condition of the property. Potential buyers are looking for the opportunity to get the most bang for their buck. If the house was sold with no knowledge of its condition most buyers will automatically assume it needs cosmetic or major cosmetic repairs.
Houses that are listed as “for sale by owner” almost always require at least some minor cosmetic repairs. A potential buyer should consider if they are willing to pay the asking price for a property that appears to be almost uninhabitable, has major plumbing or electrical issues, or requires large scale cosmetic repairs. It is possible to sell a house with almost no repairs or cosmetic issues but this can be a very difficult and time consuming process. Most sellers will not even consider selling a property that requires any type of major repairs, cosmetic or otherwise. It is also necessary to hire a professional inspector to make sure that whatever needs to be repaired is being addressed.
The second question most sellers ask themselves is whether or not they will be able to find a buyer that is willing to purchase the property at a fair market value. Selling homes with repair deficiencies is an obvious answer to this question but there are several exceptions to this rule. For example some home developers are capable of repairing many of their defects so that they do not need to list them as “for sale by owner”. These are homes that are not being sold by a individual because of their poor condition but because the developer feels they are worth more than what they are actually selling the property for.
If you are attempting to sell a house in poor condition, the third question you have to ask yourself is whether or not your asking price will actually be affordable to most buyers. The problem is that most buyers will not be willing to spend a great deal of money on a house because they assume that houses that are in poor condition always need to be improved upon in order to be worthwhile to potential buyers. This assumption is usually true but it is also true that there are some buyers who will simply not be interested in spending a lot of money on a home. It is important to realize that there are several factors that go into setting an asking price and one of these factors is the overall condition of the property. A home that is significantly damaged or does not look like it needs to be repaired may not be a high priority for potential buyers but it will definitely affect the amount a buyer will be willing to spend.
The final question that you must ask yourself before selling as-is is whether or not you have enough time to fix the property. Most buyers are willing to take a chance on buying a home that is in poor or bad condition because it gives them the opportunity to try to see if the home is right for them. Unfortunately, not all potential buyers are willing to do this type of work and they are also aware that homes that are in bad or poor condition are often listed by lenders with significantly low initial asking prices. This can make it very difficult for someone who is trying to sell their home as-is to find a buyer that is willing to invest a significant amount of money into the property.
As a result, many sellers try to hold onto their properties until a better market opportunity comes along. Unfortunately, this strategy could cost them time and ultimately, money. One of the best ways to avoid this type of situation is to make sure that all foundation issues are taken care of prior to listing the property. By listing homes in good or fair condition with minor or no foundation issues, buyers will have a much easier time getting into or buying the home itself.