Do you want to sell your home but it needs a lot of work, is outdated, unsafe, or has substantial structural defects? This can cause a homeowner to feel stressed and overwhelmed. You may not know where to start or what is the best way to sell the home.
In this article, we talk about the different ways to sell a home that needs a lot of work and help you choose what is best for you based upon your financial resources, time frame, and abilities.
Unfortunately, a little work needs to be done on the front end before we can determine what the best course of action is. You will need to spend time identifying what repairs are required, establish a realistic budget for getting the work completed, and estimate the time it will take for the work to be completed. This step can be made easier by hiring a home inspector to do a thorough inspection. An inspector will provide you with a comprehensive list of defects, code violations, and potential upgrades. Some inspectors can also provide a detailed cost estimate and a schedule of how much time it will take to complete the required repairs. If they do not provide that level of service, they can recommend someone who can. This step is very important, so please take your time to ensure the repair list, budget, and time estimate is thorough and realistic.
As you are evaluating what work needs to be done, keep in mind the items that concern a home buyer the most. These items will need to be in good repair:
- Plumbing system
- HVAC system
- Safety systems
You do not need to replace the item if it has not reached the end of its useful life and it is properly functioning but you will need to fix code violations or anything that could be dangerous.
When you feel confident with your list, budget, and time estimates, we suggest you increase the time estimate by two weeks and add 10% to the cost. Every construction project runs into delays and cost overruns, and if not, you will have a pleasant surprise.
You are now equipped to start looking at your options and make an informed decision!
The First Option to Consider is Completing Required Repairs and Improvements then Sell the Home
If you have the time, finances, and skill to complete the repairs and improvements this will be your best option. Unfortunately, this option also poses the greatest degree of risk including contractor completion delays, expensive unforeseen repairs, and cash flow problems. If you are handy and can do some of the work yourself or have experience negotiating and dealing with construction contractors the better equipped you will be in tackling this task and reducing the risk. If you are not handy and have limited or no experience in hiring and supervising contractors, then this may not be your best option. If your initial analysis was thorough and you are comfortable taking on the challenge, the benefits of repairing the home before selling can out way the risk. A renovated home usually sells faster and for more money. Buyers will pay a premium for a home that is upgraded and in excellent condition.
One more point to consider, renovating a home you are living in can be extremely stressful and make you feel out of control. We recommend you think long and hard before deciding to take on the challenge.
The Second Option is to Hire a Real Estate Agent to Sell the Home As-is
If you live in an affluent area and have a small older home, there is a good chance you will be able to sell your home as-is. If you have an average home in a typical middle-class neighborhood, it will be very difficult if not impossible to sell the home as-is through the MLS. Real estate agents earn a commission if they sell the home but lose nothing if it does not sell, so they will convince you that they can sell your home as-is. When the home does not sell, they will recommend you keep lowering the price, all at your time and expense. The majority of homes sold on the MLS are in good condition so the typical real estate agents have no experience with the challenges of selling a home that needs a lot of work. As the weeks and months go by the seller gets more and more frustrated and discouraged.
What are the challenges of selling a home that needs a lot of work?
A typical home buyer works 40 to 60 hours a week and has precious little free time as it is and is not interested in buying a problem home. Most of them have just enough money to pay the down payment, moving cost and a little leftover to buy some new furniture. In 2019, the NAR found that the typical home buyer’s down payment on the purchase of a home or condo was just 12%. When an average home buyer is only putting down 12%, they do not have the financial resources to pay an extra $20,000 to $30,000 to complete repairs and upgrades.
Second, if you find a buyer who is willing to purchase the house they still must get approved for a loan on a home that needs a lot of repairs and upgrades. The typical bank will only make a loan on a home that is in good repair and a habitable condition. Many lenders will have an appraiser do a visual inspection of the roof, plumbing, electrical, structural, HVAC, and appliances to certify that the systems appear to be functioning condition. Any obvious systems defects or needed repairs will be reported to the bank and can cause the loan to be denied.
Third, most buyers are looking for their dream home and will buy the home they fall in love with. How many homebuyers will fall in love with a fixer-upper that needs extensive repairs? Then there is the issue of safety, will parents want their kids living in a home while contractors are coming and going for weeks and weeks?
There are always exceptions and you may be successful in selling your home as-is using a real estate agent? If you decide on this path, we recommend you hope for the best but prepare for the worst.
The Thirds Option is to Sell the Home to a Cash Home Buyer
The easiest and fastest way to sell a home that needs a lot of work is to sell to an investor, like OutFactors. This is a great option if you do not have the skills, money, and time to repair and improve the home. When you sell to OutFactors you avoid the hassle of dealing with contractors and eliminate all risk. We make it easy for you to sell your house fast and for cash. If your home needs a lot of work, this might be the easiest and best option.
Selling a home to OutFactors is fast and super simple. You will get an offer in 1 day and we can usually close in 10 days or less. To get started click here, you just need to answer 4 simple questions – it is that simple. OutFactors will then conduct a review of the home and send you all cash offer to purchase the home as-is. We use standard State of Texas purchase contracts that are easy to read and understand, the same contracts used by every licensed real estate agent in Texas.
We then schedule a time to meet at the home, conduct a walkthrough, and complete the paperwork. Even better, all of our agreements are tailored to your needs. You choose the closing date and can decide to move out immediately or even months later with our Sell and Stay Program. OutFactors makes it simple to sell a home that needs a lot of work!
One of the biggest benefits of working with OutFactors is how we customize the deal to meet your needs and how easy we make it to get the cash you need when you need it. Plus, when you sell to OutFactors you avoid the 6% real estate commission which means you save the thousand potentially putting more money in your pocket.
Sell your Dallas home the stress-free way. Work with the professionals at OutFactors who will help you get out of your house fast and get you the money you deserve.
We hope this article was informative and helpful. If you have any questions feel free to contact us at OutFactors.com.
539 West Commerce Street
Dallas, Texas 75208
The Best Way to Sell a Home that Needs a Lot of Work | OutFactors — Dallas, Texas