Should I do any home repairs?
This is a question that repeatedly comes up in the sale of a home - usually in regards to three specific areas. We will discuss each incidence below.
Repairs Before You Put Your Home on the Market
Before you put your home on the market, you want to shoot for strong “curb appeal”; that gets them to the front door. But if the first thing they see is soiled carpets or cracking paint, things will go down hill quickly.
Should you put on a fresh coat of paint? Yes, absolutely. Carpets should be cleaned or replaced. I can't count the number of times these specific two items come up when showing a house. Some buyers simply never get past these initial defects, no matter how well the home fits their checklist in other areas.
I also often recommend that the seller hire a Home Inspector so that the seller knows exactly what they are going to be looking at during negotiations. Sometimes the buyer will just use yours, rather than get a second opinion.
Repairs Based on the Home Inspection
So you didn't order a home inspection in advance and you now have an offer with an agreed upon price. But when the home inspection comes in, the buyer asks for some of the items to be fixed - on your ticket. You do have an agreed upon price but now you are looking at “out of pocket” expenses before the deal goes to closing. Your agent may be able to negotiate a price reduction to cover the costs. But either way you will be getting less cash in the end.
Repairs can often make or break a deal, and at this stage, will be a total (and unpleasant) surprise. .
Repairs Based on the Termite Inspection
A termite inspection will be done as part of this process. If termites are found, you will be responsible for the treatment and the repairs to damages caused by them or other insects that have damaged surrounding wood. Again, at this stage it is an unplanned expense if it happens.
A 3-bedroom ranch, on a foundation with 2 bathrooms, a garage, a shed, and a deck. Comparative analysis is that a completely renovated house one block over sold for $220,000.00. Your Home has not been updated and the a/c and roof are older but still working just fine. A similar home sold for $205,000.00, you are not sure of the date for their a/c or roof. Now comes the part where you have to “Guess” what if anything is wrong with your home. You most likely will not get an offer more than 205K unless you can really show some upgrades that actually improve the value of the home. A Finished room over the Garage may make a difference if you did that. But for the example 205,000 is the asking price.
Offer: $200,000.00 (No identified repairs up front)
Home Insp: $5,000.00 (repairs negotiated)
Closing Cost: $6,000.00 (This is your contribution to the buyers closing cost)
Closing Cost: $13,000.00 ( this is your closing cost plus the above for a total of 19K)
Loan Payoff: $105,000.00
Net to you: $76,000.00 of which you need to reimburse yourself the 6000.00 in repairs.
This scenario is not the norm the loan pay-off is usually closer to 165,000.00 which would be a net of only $5,000.00 which is where all the stress comes in. So, in this case an investment of 10- 12 thousand up front might have been enough to get you closer to the 220,000. Refurbished Look. And might have been worth it. Each case is unique to you and this is why you need to have a good real estate agent helping you through the sale as well as your decision to sell. Call me for more information