Should you fix your house before you try to sell it? Not surprisingly, the answer to that question is: it depends. It depends on your local housing market and the extent of the home repairs required. If your old home is in the middle of an area being rapidly developed, you may make a profit just on the land. However, if your home is in an area of urban decline or experiencing economic challenges, you may struggle to sell it for a profit.
To help you decide if it makes sense to fix your home you need to figure out what the market value of your home is and what repairs can help you sell your home. We’ve separated the repairs you may want to consider into two groups – repairs you may need to do to sell your home and low-cost repairs you may consider to improve the odds of selling your home.
How to evaluate your housing market
This first thing you need to do is to evaluate your housing market. You have to set aside any emotions or biases you may have about your home, including the time and work you have already put into it, and judge your home and housing market objectively. Researching your local housing market will help you learn roughly what your home might sell for. You can use this information to decide if your home could benefit from a few upgrades.
Here are some ways to evaluate your housing market:
Use an online Automated Valuation Model (AVM). Many websites will use your address to compare your house to other homes in your area and based on information such as recent sale price and home-size, they can give you a ballpark estimate of your home’s value. These estimates are not 100 percent accurate, but they give you somewhere to start.
Talk to a local realtor. Local realtors in your area are familiar with what homes are selling for as well as what updates can help increase the asking price of your home or increase the odds of your home selling. If you are working with a realtor to sell your home, they will most likely also be willing to show you a few comparable homes in your area.
Once you figure out what the trending market prices are, you and your realtor can price your home. If your selling price is well over what you owe, you have more room to consider repairs. If the potential asking price is at or below what you owe, you’ll have to carefully consider what upgrades will help you earn a profit or at least sell your home in a timely manner.
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What to fix when selling a home
Unless your home is priced well under market price, many buyers are not going to want to purchase a home that needs expensive repairs such as a new roof. You may benefit from at least doing enough repairs to pass a basic home inspection. Most buyers will pay for a home inspection before they purchase your home, so it is a good idea to pay for an inspector’s report in advance of doing any repairs. An inspector offers an objective report regarding the state of your home without regard to emotional selling points such as aesthetics.
Here are some issues that you may consider fixing based on a home inspector’s report:
Bad roof. Roofs are costly and, in some cases, may not be able to be financed. A $10,000 roof with a warranty may add $20,000 to your home.
HVAC. A new furnace can help you sell your home. While central air is nice, the value it brings will depend on your local climate.
Plumbing. Most new homeowners are not going to want to have to deal with major plumbing issues or mold damage from water leaks.
Electric. An aged electrical system costs a bit to replace but will make your home safer and more sellable.
Foundation. A bad foundation can cause structural damage and in some cases water damage. Fixing a foundation can be expensive and foundation issues make buyers apprehensive, as it should. A professional can help you decide what to do about a bad foundation.
Structure. Your inspector will look at load-bearing walls to see if parts of the structure have shifted through the years. They’ll also look for signs of structural issues such as sloping floors, slanted walls and cracked walls. Again, you’ll want to consult with a professional about fixing structural issues.
A home inspector is going to look under your house, in the attic and a lot of places you may never look to help you rationally evaluate the state of your home. If your home cannot pass a basic inspection, you may have a hard time selling it unless you sell it to a professional home-flipper who may be willing to do the work in hopes of making a profit later.
Low-cost home updates
Some repairs are not costly but can help improve the odds of you selling your home. While many of these updates are minor and mostly cosmetic, these improvements can still sway potential buyers. In a hot buying market, you may not have to fix these minor issues to sell your home. In a competitive market, even small updates can help give you gain an edge over other sellers.
Here are some low-cost repairs that you may be able to do yourself:
- Fix leaky faucets
- Remove old window coverings and clean windows
- Replace broken windows
- Patch holes in walls and cracks in ceilings
- Remove dated wallpaper and paint walls
- Install updated bathroom and kitchen fixtures
- Refinish kitchen cabinets and add new knobs and pulls
- Add new mailbox and house numbers
- Refinish or paint the front door
- Clean the yard and do some landscaping such as edging and trimming
- Refinish hardwood floors