If you are a homeowner and intend to sell your property in Connecticut, the last thing you want to think of is doing home repairs. Even more so if you have done repair work before, since you already know the headaches and hassles that come with the process. From communicating with contractors, to blown budgets, to inevitable delays… it can seem like one thing after another when you’re doing renovations.
Even more discouraging is the concern that you’ll be doing repairs without a guarantee that you’ll get a return in the sale price when you put the home on the marker. However, in this market, buyers are looking for homes in good shape. They don’t want to pay top-dollar for a home that will be requiring them to shell out more money in the near future.
It is important to also note that for many types of financing – including Federal Housing Authority loans – require homes to be in good shape. FHA loans are designed to help low- to moderate-income families attain homeownership. They are particularly popular with first-time homebuyers, and require a home to be in good condition in order to help set up the buyer for homeownership success. This means that repairs have to be completed before closing, and an FHA appraisal/inspection is very thorough.
In today’s post, we will go over what repairs you’ll need to complete when you sell a house and what you should spend money on, including:
- Knowing the difference between home repairs and upgrades
- What to look out for in a house that needs repairs
- How you can finance necessary repairs
- Repair options available when you are selling your home
- Deciding what options are the best for you
- Who can you sell to without making repairs?
- A wrap up
Sometimes it’s important to distinguish the difference between doing upgrades and home repairs. When you go to sell your house, knowing the difference between the two is crucial for any serious real estate investor because it determines the cash flow and taxation. Let’s dive into each of these terms.
When you sell a house, repairs means to restore something that was damaged, worn out compared to its original shape. Examples of home repairs include roof replacement, fixing a cracked foundation or wall, fixing outdated electrical work, replacing the septic system, among others. These are the elements of the home that make it a safe living environment, and a good investment for potential home buyers.
Upgrades in real estate refer to improving something and making it look better than it was before. Upgrades are meant to add value, increase their life expectancy or give it the form you desire. Serious property owners understand that doing upgrade work in their properties translates to increased income production and longevity of their houses. Examples of upgrades in homes include fitting new kitchen cabinets, changing the flooring, updating plumbing or lighting fixtures. Think of these as the frosting on a cake – they make it even more beautiful and delicious. Upgrades can make a house more appealing to buyers.
What to Look Out for in A House That Needs Repairs
There are some issues that sellers must not ignore when you sell a house. The issues are more about safety than ordinary repair. If not fixed, they may jeopardize the life of the buyer and their loved ones. If the buyer decides to carry out a home inspection, inspectors will quickly notice them, and even if the seller won’t be doing the repairs, the law demands that they notify the seller about them. Here are some of the big-ticket items that you should be on the lookout for.
- Many home sellers ignore the roof when they want to sell a house, but it should be the first thing to get your attention. The roof has a lot to say about your home, and cleaning it or fixing the leakage won’t cost you much when compared to replacement. These repairs will also reduce the time that your house will be on the market. Besides, a buyer needs to have a home inspection done, and if that happens, the inspector will definitely identify the roof problem. This might push the buyer to negotiate for a lower offer amount or for cash back at closing to repair the issue.
- When you sell a house it is a must to state the condition of the foundation of the homes. This applies even if you are not willing to do any major repairs. However, most home buyers will insist that you do the foundation repair work before they close and move in. Some of the indicators of a faulty foundation include exterior cracks, cracks in the interior walls, and warped, uneven floors.
- Before putting your house up for sale, electrical repair work is essential, it is imperative for safety purposes. Most home buyers will have concerns about this and will require your transparency. No one wants to live in a home where the electrical system could be a potential fire hazard or shock their loved ones. Take note of tripping breakers, flickering lights, or exposed wiring- all these could be major red flags for buyers. Electrical issues are always paying attention to because a buyer could back out of their decision to buy a home due to it having a faulty electrical system.
Plumbing and Sewer
- When you sell a house this is another critical area that you must take care of. Potential buyers are not going to be excited to put an offer on your home if they turn on the shower and only a trickle comes out or they hear the drip-drip-drip of a leaky faucet or a constantly running toilet. Even simple plumbing issues such as these can lead to a drop in offer amounts. This is why it would be wise to address these problems before putting up your home for sale. Fixing some of them won’t cost you much, especially when compared to a hit on the sale price of your property.
HVAC and Water Heater
- A serious home buyer will not ignore the heating system of the house you put up for sale – especially with our New England winters! This is a bone of contention between the seller and buyer because nobody wants to carry repairs or replacements burdens. When you sell a house some of the things that buyers will ask about the heater and HVAC system include the unit’s age and energy consumption. No one wants to buy a home whose HVAC system will stretch them with energy bills and escalate their spending.
These are the essential repairs that might affect the sale of your home by delaying it or lowering its price. Other repairs include touching up paint (especially if looking to secure a buyer with FHA funding), replacing bathroom and kitchen caulking, as well as floor and light repairs.
How Can I Finance Home Repairs?
When you sell a house, one of the things that you might ask yourself is whether repairing is worth the time and cost. A seller also needs to find out if the house will bring in more money and cover-up for the repair costs.
Another critical factor to consider is how you will be paying for home repairs before the sale. No one wants to blow all their savings on home repairs that they aren’t guaranteed a return on. Nevertheless, there will be a need for extra funds in the whole process of repairs. Let us look at different ways of financing any home repair work.
Credit cards are often a way in which a homeowner can finance necessary repairs. This is even more true if your card has a high limit, because it allows you to borrow a higher amount of money for bigger expenses. On the other hand, not having one doesn’t lock you out of applying for a new credit card specifically for home repairs. Nevertheless, you do need to be aware that credit cards are costly, despite being convenient for sellers who want to sell their property quickly. There are high-interest rates charged on them, not to mention that the loan needs to be paid back in a short time.
This stands for a home equity line of credit, and it means a loan that a homeowner gets with their house as security. When you sell a house HELOC might come in handy if you have large expenses like home repairs or want to clear a higher interest rate charged on your credit cards. Primarily, the HELOC fund allows you to pull your money within 10 years and repay it in 20 years.
However, for you to qualify for HELOC, the value of your home must be higher than any amount owed on it. One good thing about HELOC is that its interest rate is low compared to other loans.
Additionally, with HELOC, you can take as much money as you need, meaning if your equity has $ 30,000 for borrowing, you can get two times that, and the interest charged will remain on the equity amount that you took. With HELOC doing repair work will be easy and convenient.
When preparing to sell your house, getting a personal loan is another alternative for doing home repairs. However, the interest rates will be higher compared to options like HELOC. Also, the repayment period might be longer. However, you can borrow whichever amount you want and use the loan as per your needs. If going the personal loan way is your decision, you need to find out what your bank has to offer first. If the terms are not favorable, you can consider searching for other lenders, such as a local credit union. Be sure to take into account the interest rates and repayment periods in your search.
Most homeowners understand that their home is an investment, and therefore refinancing won’t make them feel like they are losing. Refinancing means you are getting a new mortgage by trading the present one. However, the principal will be new while the interest rates will be different. In this case, the old mortgage will be repaid by the new one, and therefore you will have one loan to be paid monthly.
Refinancing is a common way to pay for home repairs when you’re intending to sell your property. If you have been paying your mortgage as per the agreement you had with your lender, you might get a larger amount of money that will meet all your repair work needs. You have a high chance of getting better mortgage benefits if you are refinanced. This is because the lending terms are different, as well as the rates and repayment time.
Homeowners understand that having some savings will come in handy on a rainy day when the roof starts leaking. This is why saving is encouraged, especially for those on a tight budget. You can save a certain percentage no matter how small it is, until it grows to a significant amount that can be used for home repairs. You will be amazed at how easy the project will be once you have the needed amount for repair work.
So What Are My Repair Options When Selling My Home
There are many reasons why a home seller would put their house for sale without doing repairs. Maybe they urgently need the money, have a tight timeline to move out, or maybe don’t have the money or time to do the repairs. However, you need to know that there are consequences that come with not doing repairs for a house that’s up for sale. One of them will be a lower price for your house or delayed sale. Therefore, it is essential to try as much as possible to do something at least to get good value for your home. Want to know what to spend money on when you sell a house? Here are some of the repair options that you can go for.
The full fix option is for sellers who have both the money and time needed for home repairs. This option is expensive and will take a lot of time. If you want to really fix up your home before the sale, but are looking to save some money, you can consider doing the home repairs yourself. Some of the home repairs that you can DIY include
- Kitchen or bathroom faucet replacement
- Repainting the interiors
- Cleaning the rain gutters
- Floor lamination work
However, if you aren’t sure about your skills, hiring a professional in whichever home repair work you need completed really is the safest bet. If you attempt a DIY and it goes poorly, you could end up having to pay someone to fix your mistake in the end anyway. There are also home repair projects that require a professional for the sake of your safety and the safety of your future buyers. These include:
- Roof repair
- Foundation repair
- Electrical wiring
- Plumbing and sewer repair
One essential yet difficult thing to do is identify a good contractor or home repair professional. This is because there are many people masquerading themselves as professionals who may not do a complete, safe, or timely job. Nevertheless, you can ask your friends, family, or colleagues since they might know someone skilled and reliable. As you select the best, ask them how long it will take them to repair. An average professional should do the work within the time frame you agree. Also, check if their bids are reasonable. Anyone who exaggerates the cost of materials should not be hired.
When considering repairs, it is important to understand the return-on-investment (ROI). As a homeowner, it is crucial to understand that you might not get a 100% return even in property repair projects whose ROI is high. This is why it is critical to factor in the ROI that a home repair project will bring. Here is a list of ROI for different home projects.
|Entry door replacement
|Average ROI is 90.3%
|Repair of Average basement
|Average ROI is 90.01%
|Replacement of window
|Average ROI is 89.6%
|Average ROI is 91%
|Average ROI is 79.1 %
|Addition of wood deck
|Average ROI is 66%
|Average ROI is 93.5 %
In this option, you do not complete every repair and upgrade that a home needs, but rather do a partial repair. You can pick and choose which repairs to complete based on your time and budget.. In this option, you can choose to do home repairs that are not costly and are quick. Some of such home repairs projects are listed below.
- Carpet cleaning or replacement
- Replacement of window coverings
- Landscaping and painting
- Cleaning the roof and gutter
- Fixing damaged lighting system
- Repairing a leaking sink.
All these are known as cosmetic home repairs, and they go a great way in improving the appearance of your home, thus attracting buyers when selling your house in Connecticut. Since the repairs will make a good impression of your home to the buyer, they might not pay much attention to an area that needs many repairs. However, it would help if you remembered that the undone repairs might also affect the price of your home, and the buyer may negotiate.
Selling Your House “As-Is”
In this option, you, as the homeowner, choose the idea of selling your house without making any home repairs. As mentioned earlier, you could have several reasons why you aren’t repairing the house. However, this option might work to your disadvantage as a home seller because the buyer might take advantage and offer a lower price for the house. Selling your house in Connecticut the way it is is a quick sale option but will significantly limit the seller’s options in the marketplace.
Decide What’s Option’s Best for You
Now that you understand the three repair options for a house sale. It’s time to make your decision. If you see any seller putting up their house for sale as it is, there must be genuine reasons for doing that. Let us dive into some of the reasons behind the three house selling options.
If You Want the Best Price…
This goes to those who have decided to do a complete repair of their house. They are willing to spend on major and minor repair projects because they want their house to get the best price. Fortunately, by doing the home repairs, the home price will increase. And serious buyers go with what gives them the most value for their money.
If You Want to Move in a Hurry…
One of the reasons one would want to sell their house without repair is that they could be in a hurry to move out. Life is unpredictable, and maybe a job transfer has come up, or they want to relocate for family issues. If you are in such a situation, you will have to choose to sell your house without doing any repair work.
Most home sellers are pretty uncertain about selling their houses without repairing the damaged areas. However, it is possible to sell your house as it is, and if you are lucky, you may have a buyer who can make a down payment and help sell your house in Connecticut really fast.
If the House isn’t Worth Much…
There is a lot of unpredictability in real estate. The prices keep on changing from time to time due to various reasons. This is why home sellers should do serious research before putting up the house for sale. When you sell a house you need to establish the best price for your home, not to sell it at a throw-away price. To be safe, hiring a real estate expert would be great since they are conversant with house pricing and will guide you in selling your house in Connecticut. Once you establish the value of your home, you can now put it up for sale.
When You Lack the Resources…
This group of people mostly fall under the ‘selling your house in Connecticut as-is’ a category. It could be they have an urgent need for money, and therefore they are willing to sell their house at any offer in the market. Also, the seller might be lacking money to do the home repairs.
At this point, you may be wondering who buys houses that are in need of major repair (more on this later). Some buyers usually buy such houses because they are ready to invest in them and give them a makeover. If you are in urgent need of money and lack the time and resources to do the repair work, selling your house in Connecticut as-is may be the best option for you.
If the Home Needs Serious Repairs…
As mentioned earlier, a home may require either minor or major repairs. The minor ones are easy and cheap to do. For example, fixing a leaking sink or replacing a carpet is not much work or a significant cash outlay. However, significant repairs are an entirely different matter. It could be a spoiled sewer line or broken/outdated windows. Such repairs might be costly, and the best option is to sell your house in Connecticut as-is so you could focus on what to spend money on.
So Who Even Buys Houses That Needs Repairs?
When you decide that the home repairs are too costly, too time consuming, or just too much of a headache to take on before selling, you may be concerned about just who will be able to buy your house. It is true that homes in need of significant repairs will not be approved for traditional funding sources, such as many mortgages and FHA loans due to the condition and appraisal of the home. So who does that even leave?
When you sell a house this is one of the questions that most homeowners ask themselves. It is wise to search the market well because that’s the only way you will find a buyer who is willing to buy your home as it is. Interestingly, most real estate investors prefer buying houses that need repair. They aim to make good money after repairing the house and reselling it.
The other buyer who would buy a home that needs repairs is someone with specific tastes and needs. Maybe they want to live in a particular area for convenience, but they don’t have the money to buy a new home.
Such a buyer will go for a house available in the area that they prefer so long as it has the features they want in a house. The other category of people who don’t care about buying an unrepaired house is the remodelers. This is a home buyer who can buy a home of their choice, because to them renovating a home is fun. These buyers will always go for a home that has much repair work and renovate it to their taste.
Tips for Selling Your House That Needs Major Work
Below are some of the things you can do to increase the chances of selling your house
Mention the Positive Features of Your House
This is another strategy that you can use to sell a fixer-upper. In other words, when you sell a house you will be putting up your house for sale based on what it entails. You must, however, be keen to mention specific features and describe them; for instance, you can mention the incredible views surrounding the home, ample space for parking and kids to play, or an electric alarm. You can also mention the schools around and recreational centers. This way, you will attract buyers quickly and make selling your house stress free.
Make A Good First Impression
Whether you will be selling your house as-is or you’ll make some renovations, the first impression matters. This includes landscaping, cleaning, and organizing the house to get rid of clutter. According to a study conducted in California, a house with excellent landscaping can fetch a higher price by up to 5% compared to houses with poor landscaping.
The benefits of cleaning are, when you organize an open house, buyers often come to the window to get a brief view of the house. If your house is disorganized and full of clutter, you’ll have trouble convincing any buyer that your house is worth buying. You’ll have trouble even selling your house. Besides, you don’t have to spend thousands of dollars. A few hundred dollars for a day’s work will go a long way in increasing the value of your house and the chance of you selling your house in Connecticut.
Besides landscaping and cleaning it up, you should also handle the small fixes which we mentioned earlier. What to spend money on more ,below are some of them;
- Holes – If your floor, walls, or even doors have holes, you need to patch them up and repaint the house if necessary.
- Clean the toilets, bathrooms, kitchens, sinks, and unclog the drainage systems.
- Check the tiles, fix and replace the grout.
- Termite treatment
- Fix the HVAC system, electrical issue, and water issues, if any.
- Replace the caulking
Here’s a quick video with more tips and tricks for getting your house sold!
Price The House Realistically
When you sell a house there are two ways to price your house. If you have not repaired it, you might have to go for an average price. This is because the buyer will have to spend more money on the repair work. On the other hand, if you opt to do the repairs before the sale, the price of your house will be high. You can seek the help of an agent in pricing your home accordingly.
Although there are many home selling options, selling your house in cash to property investors would be wise. A cash sale means selling your house faster because the sale process is done quickly. The other benefit of selling your house in Connecticut in cash is that you will save money. This is because the realtor’s costs will not feature in the sale, meaning their closing costs and commissions will not apply.
To Wrap It All Up
If your house needs a lot of work, or even a complete overhaul, all is not lost. If you are willing to put in the work, your house can still fetch a good price.
In this article, we have discussed everything related to selling a house that needs repairs. We also discussed the three options you have when selling your house in Connecticut as well as the kind of buyers who are willing and able to buy homes that need repairs. That way, you will not be leaving money on the table.
Now you know what to look out for, what to spend money on and how to get the money to repair your home. Time to get it sold!
Have you evaluated all options and decided to sell your house for cash without having to do the major repairs? Consider Bristol Home Buyers, one of the best services in buying such properties. We will make you a free, fast, and fair cash offer. And once you accept it, you won’t have to deal with agents, open houses, or any other stress involved in the traditional method of selling your house in Connecticut. Reach out to us today! And get the best offer for your house. Selling your house in Connecticut has never been this easy!