Should you fix home before you sell?
OFTEN homeowners may find themselves in a situation where they have decided to place their home on the market — but the home is in need of repairs.
In this instance, the homeowner will have to make the tough decision of whether it is best to delay putting the property up for sale and making the necessary repairs, or taking the knock on the asking price and selling the home as it stands.
This is according to Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, who says it goes without saying that a home in good repair will achieve a much higher selling price than one that needs attention. However, fixing a home will cost money and will delay the sale process by the amount of time it takes to complete the repairs.
Goslett says there are many buyers in the market that are looking for homes that have potential and are more affordable because they require some work, but at the end of the day it will be easier for a seller to find a buyer if the home is at its best.
“While it largely depends on the reasons that the homeowner is selling and the time frame in which they need to sell, taking the time to get the home into its best shape could pay off,” he says.
“This is because a visually pleasing home will attract far more attention from potential buyers than one that is not well kept.”
Goslett says most sellers will spend some time and money preparing for the sale of their home in the form of a fresh coat of paint and spring cleaning. Very often the home may also require just a few easily repairable issues to be sorted out before it is ready to be sold.
However, what if more is required? To what extent should the seller be prepared to go before they place the property on the market?
“A fresh coat of paint and a few repairs is fairly standard, but what if there is structural damage or an entire roof that needs to be replaced? These larger elements could pose a far greater challenge for potential sellers,” says Goslett.
“Most buyers will want the home to be professionally inspected before they sign the sales agreement. It is best for the seller to have the home inspected before they put it on the market to ensure they are fully aware of any potential issues that need to be addressed.”
Goslett says the seller is morally obliged to inform their real estate agent and the potential buyer of any known defects.
Once the home has been thoroughly inspected and the homeowner has obtained a quote for all the necessary repairs required, he says they will have a far clearer idea of whether it is worth their while to fix before the sale or sell ‘as is’ and lower their asking price. “If the asking price of the property would decrease by as much as R100 000 or R200 000, but the repairs would only cost around R50 000, it would make more sense to delay the sale and have the repairs done before going to market,” says Goslett.
“However, if the cost of the repairs is R50 000 and the asking price of the property will only change by R50 000, it would seem more feasible to rather put the home on the market sooner and advise potential buyers of the repairs needed.”
Very often cost is only one aspect that requires consideration, while time is another. Goslett says major repairs will take time - a luxury that not all sellers have.
If the seller has committed to another property, is moving because of a job or immigrating, they may need to sell as soon as they can. This will have an impact on their final decision.
Depending on the situation, another consideration could also be the buyer. The seller may find a buyer who would prefer to do the repairs themselves because it will give them the opportunity to change certain elements in line with their own personal taste.
In a case where the repairs are cosmetic by nature, the buyer may want to make the decisions as to how the repairs are done and what materials are used.
“Irrespective of what the seller decides, it is imperative that both the seller and buyer are fully aware of all the home’s defects and are prepared to agree to the terms and conditions of the contract,” says Goslett.
IT goes without saying that a home in good repair will achieve a much higher selling price.