When you decide to sell a house that desperately needs updating, you basically have two choices: Sell it as is—in its current condition without improvements—or make upgrades in the hope of reaping bigger bucks down the line.
While renovating your property will inevitably sell your home faster and for more money, listing your property as is has its perks, too—including not having to fork over lots of cash for major improvements you won't get to enjoy, and not dealing with the headaches of those improvements.
Deciding what to do can be overwhelming, but we're here to break it down for you. If want to unload your property pronto and for maximum cash, here are some things to keep in mind.
Out of house often means out of mind
If you've already purchased another home and have one foot dangling out the door, things can get challenging. Between work and family obligations—plus dreaming about decorating your soon-to-be new home—chances are you won’t have the time or energy to reimagine your old one.
If you're set on upgrading your old home to get top dollar, you'll want to find the right professional to guide you through the process, says Eric Stewart, a Realtor® with Eric Stewart Group of Long & Foster Realtors.
“Unless you find a real estate agent whose experience you can trust, someone who has a very good track record preparing homes and understands how to do the work, you’re often better off to sell the property as is, so that you don't get involved in chasing the market,” Stewart says.
Assess the potential workload, time, and money it'll take to upgrade
Get an expert opinion—or better yet, several opinions—regarding how much updating and repair work would be required to boost the home’s bottom line: Does the place just need a good scrub, or an entirely new kitchen and three new bathrooms? And more importantly, do you have the cash, the time, and the patience to see the project through?
“It’s all about whether people want to deal with renovations or not,” says Paul Morse, a licensed contractor and owner of Paul’s Carpentry Workshop in Stoneham, MA.
Morse, who's worked for several clients who wanted to spruce up a neglected home prior to listing it, suggests that sellers should identify three projects that need doing, and then consult their agent to crunch the numbers.
“Sellers should ask what their return would be if they fixed the bathroom and kitchen, for example, versus what the investment would be," he says. "Then, get three prices from three qualified local contractors.”
And don't forget to factor in the cost of owning the home during major renovations. Depending on how extensive your revamp is, you might need to find temporary housing while your property is being gutted, so add that fee to your bottom line.
Take your location—and the market—into account
If your home sits on a great lot in a sought-after loascation, buyers—especially investors—might line up in droves. When the land is more valuable than the structure sitting on it, you might be better off selling the property as is, Stewart says—there’s little point revamping a house that will probably be torn down as soon as the ink on the purchase agreement is dry.
Stewart recalls a recent listing priced at $650,000 in a hot market.
“We sold it as is for $655,000, and the seller was able to leave everything they didn't want in the house, lock the door, and say goodbye, which provided tremendous freedom for them," he says. "The work they would have had to do would never have got them the return they got by doing nothing.”
‘As is’ doesn’t mean ‘falling down’
Of course, doing some inexpensive repairs often helps sell your home faster, notes Lynn Pineda, a Realtor with eXp Realty in Southeast Florida.
“Even when buyers say, ‘I'm going to sell my home as is,’ that doesn't mean you have to present your home in shoddy light to a buyer; you still need to prepare it and make it look good,” she says. “Otherwise, you will sell for less money, or the house will sit on the market and you’ll lose money in the long run.”
If you just want to do the bare minimum and are willing to shell out a few thousand dollars, Morse suggests painting the entire home and resanding hardwood floors, if there are any. These upgrades would take about a month to do, but will make a huge difference in listing photos.
Selling your home as is won’t stop buyers from trying to negotiate
A house that hasn't been updated in years—or even decades—often attracts builders or investors looking to gut or tear everything down and construct a new home. These "fix and flip" buyers always want to maximize their profit, Stewart says, and might try to haggle down the purchase price.
Find a real estate professional who can help you maximize your profits; look for one who's had considerable success selling homes like yours, in your specific area of town. Some good questions to ask include how long comparable properties have stayed on the market before selling, what kinds of houses are selling fast and what condition they’re in, and which neighborhoods are most desirable.
Together, you can weigh what your home's worth—and negotiate a better bottom line.