The housing market in the Treasure Valley is still hot, and homeowners hoping to sell their home are evaluating all the possible options to cash out on some of the equity they’ve gained over the last few years. When you’ve lived in a home for a long time, however, some maintenance tends to fall to the wayside. Because of this, many homeowners are wondering – should I fix up my home or sell it as-is?
The housing market can be tricky. Pouring money into the wrong project can easily waste your time and money without returning anything for your trouble. Before you decide to jump into home improvement, consider if the plan you have in mind will be worth it in the end.
What does selling a house “as is” mean?
When a seller lists a house as is, it usually means that they will not make any repairs to the property prior to the sale. They will not make any concessions on price for necessary repairs, meaning the purchaser will buy the house in its current condition for the full list price. The buyer then makes all repairs after the sale of the home closes.
What do other homes in your area look like?
The first step in deciding what repairs, if any, you should make to your house involves evaluating the market in your area. If homes are flying off the market, you could fix up your home to raise the list price, expanding your profit. On the other hand, selling as is may mean that your home sells quickly, getting you your equity faster than if you spend time making repairs. Keep in mind that hot markets are never guaranteed, and if the market slows down by the time you’re done renovating your property, you could miss out on the benefits of a seller’s market.
Next, tour some homes that are for sale or pending in your area that are around your preferred sales price. What does that home have that yours does not? What updates did those sellers do? Which homes generate a lot of interest, and which ones have been sitting for some time? This will give you some insight into what buyers in your area are expecting to find in a potential home.
Finding the balance between profitable repairs and an attainable sales price is key when deciding if you should fix up your home or sell it as is. If you decide to fix up, avoid updating the property beyond the other homes for sale in your area. Your house may look beautiful and upgraded, but you could end up pricing out the typical buyer looking in your community – plus you’ll be competing with other houses at a better price point.
What improvements will give the highest return?
There are a few repairs and renovations that typically provide the highest profit return. Some of them are big renovations, while others are easier to complete on your own.
Here are a few specific big-ticket renovations that have the highest chance to increase your profit, but may not be easy to DIY:
- Replacing windows
- Replacing or painting siding
- Kitchen repairs and updates
- Bathroom repairs and updates
- Newer carpets
- Hard surface flooring in the bathrooms
When completing big repairs and renovations like this, you must keep profit in mind. When fixing up a home, it is easy to sink a lot of money into upgrades that won’t be reflected in the purchase price.
To put this into perspective, the average cost of replacing carpets in Boise ID is about $4,000. If you replace the carpets, you’ll have to increase your home’s sale price by at least $4,000 to cover costs and ensure a profit. If your carpet is only a few years old and in pretty good shape, your purchase price most likely wouldn’t support a $4,000 increase and you could lose profit by replacing them. However, if your carpet is extremely dated green shag, including in the bathrooms, it’s probably worth it to spend the money to have them replaced.
If big repairs and renovations aren’t a possibility, here are some DIY fixes that can increase your profit and appeal to buyers:
- Patching holes and cracks in walls and ceiling
- Deep cleaning carpets
- Replacing outdated fixtures
- Fixing leaky faucets
- Adding a new coat of paint to the interior walls, particularly if they are a dark color
- Sprucing up your curb appeal by cutting back overgrown greenery or mowing and treating the lawn
Keep in mind that some necessary repairs won’t add a lot of value to your home. Major repairs outweigh cosmetic updates, and this must factor into your decision to fix up or sell as is. If your roof is in bad shape or your HVAC system doesn’t function properly, buyers may be scared away by the prospect of making repairs after the sale, even if they adore the kitchen. If your home needs a major repair like this and you only have the time and budget for so many projects, selling as is may be the more profitable option.
When is it best to sell as is?
There are two main categories of reasons why a home may need to be sold as is. The first relates to your personal circumstances:
- You need to move quickly for a job or change in lifestyle
- You’re facing a foreclosure
- There is a lien on your property that must be paid off
- You don’t have the budget or time for repairs
If you need to sell your property quickly, selling as is could be the best option. You can avoid long repair timelines, and cash out on your equity sooner than if you spend months fixing up your house.
If your house needs a lot of work, it may also be more profitable to sell as is. For example:
- The home has been smoked in for a lot of years and will require professional help
- The home needs repairs that you can’t DIY, such as complex electrical work or plumbing
- The home needs foundation repairs, or significant structural repairs
Large repairs like these come with high price tags and long timeframes. By the time the house is fixed up to the level of other homes in your area, you may have missed the window of opportunity to cash out on your hot market. In cases like these, it’s easy to spend months fixing up your home, only for the sales price to end up not covering the costs of repairs.
Explore all of your options before diving into a project.
If you’re thinking about fixing up your house, fast, low-cost updates are often preferable to huge renovations. If repairs are relatively straightforward, fixing up your house can yield a good profit. If you don’t have the time or finances to spend on updates and repairs, selling your home as is may be the best option. Prior to diving into repairs and updates, do some research on the homes in your area and what projects will be profitable. You may find that you can get more from doing less.