sell 'as is' or 'fixed up'

[Rustic23]

Not sure which topic this belongs, however, it effects after RE income I'll put it here.

We are getting ready to sell our house prior to moving to retirement. Here is the question. The house needs new carpet and paint. Is it better to put in cheap carpet, and have it painted, sell as is at a lower price, sell as is at higher price and give a ‘fix up’ allowance.

 

[brewer12345]

Depends on how strong your local market is and who the most likely buyer is. If yu are in a strong market, put it out there as-is and let it get snapped up; you might not even have to offer an allowance. If the market is weak, spruce it up so it shows better.

If your likely buyer is looking for a "move-in condition" place, then it would pay to deliver such.

 

[audreyh1]

Our house needed new carpet and linoleum.  We weren't willing to spend the time or money on those repairs.  We did not give a "fix up" allowance - that can be negotiated later as part of the buyer's contract.  It's generally not a good idea to include it up front.

Just price the house according to it's current condition (a realtor can help you do that).  If the buyer insists on an allowance to make those changes, then you raise the selling price of the house to give them the allowance.  That's the way it usually works.

Not everyone needs the allowance - just cash poor folks who need the mortgage to cover the costs.

Our buyer took the house as is.

Audrey

Edited to add: our house didn't need paint, just new flooring.

 

[wabmester]

We just sold our place, and my original instinct was to leave all of the deferred maintenance and use the buyer's allowance thing as a negotiating tool.    I was overruled by our realtor, and I think she was right to have us take care of the maintenance items up front.

First impressions are HUGE when it comes to real estate sales.     Take care of the cosmetic stuff, and maybe even go a bit overboard.   We went so far as to buy a new stainless steel fridge, for example.    I have no doubt that we got a great return on that investment.

 

[cute fuzzy bunny]

I've gone both ways. It was intuitive to me that I could lower the price by a bit against market and not do all the fixup work or give an allowance, as what I painted or carpeted with might not be to the taste of the buyer anyhow.

Doesnt work out that way. People want to see "pretty" and "ready to move in", whether they really want or need that, and half the time they'll pay your price plus the added cost of the repairs, then paint right over what you painted and pull up your carpet and put their own stuff down.

It makes absolutely no sense to me, but thats how it works. People cannot see value past any flaws. Especially when yours is one of ten homes they look at.

We put 40k+ into my wifes old house and then asked for $80k more than I would have sold it as-is, and it sold in no time.

I didnt catch up on the "deferred maintenance" on my mcmansion, and it needed paint and carpet that I didnt do either. It sat for sale for twice as long as a lot of other comparable homes, although it did finally sell for full price. Bet if I slapped some plain white fresh paint on the walls and a mid grade beige carpet on the floor, it would have sold in a week.

I now have the mindset that i'm not going to put off fixing, updating or replacing anything a buyer would want done. It *really* makes no sense to put off doing the stuff because you can live with it the way it is, only to pay to do it a month before you sell the house and not get any enjoyment out of it at all.

 

[Canadian FIRE]

Ok I have limited experience on selling homes, but I did enjoy watching my parents sell there home once every two years for the last 20 years. So I picked up a few tips.

1) Paint is cheap and it really helps sell a place. At the very least I suggest any selling an older home should drop on a new coat of paint. Go with a neutral colour. You make back every dime you spend on paint on most house sales.

2) Flooring is a bit harder of an issue. Depending on the codition and age, you might be able to leave it alone and save some cash. But if it is really of date (ie: 10 to 20 years old) you might have to break down and drop in some new stuff.

I have yet to understand why, but most people can't see beyond the surface of a house. I got my current house for about 10K cheaper that it should have been just because I realized that all it needed was some paint and new fixtures.

Good luck with it all.

CF

 

[Rich_by_the_Bay]

I agree with fixing it up, within limits, before selling. That is, unless the comparable houses in your area are routinely run down or suffer from "deferred maintenance" all over the neighborhood.

In addition to the psychology mentioned before, shoddy carpets, paint, and other trappings raise the question, "If that's the way they maintained the obvious stuff, I wonder how 'iffy' is the furnace/hot water heater/roof, etc."

It hurt at the time but we once carpeted 2000 sq feet and replaced 6 floor-to ceiling thermopane windows (the seal was broken and they were fogging up). The house sold in a week. We didn't buy the best carpeting, but it looked clean and nice.

So, do the moderate stuff. Expensive stuff: maybe just disclose it and negotiate it in.

 

[tryan]

Everytime I deffered painting the place before a sale I paid 5 fold in selling price and time on the market. I would do the painting.

Carpet I'll steam clean and deoderize. Looks/smells like new even if it's old.

 

[Nords]

We are getting ready to sell our house prior to moving to retirement. Here is the question. The house needs new carpet and paint. Is it better to put in cheap carpet, and have it painted, sell as is at a lower price, sell as is at higher price and give a ‘fix up’ allowance.

It depends what kind of buyer you want. Some buyers want to move in with a toothbrush when their realtor tells them it's OK, others want to dig out the value homes with the worn-out décor & good bones on their own. We're the latter, and we find that most people don't do a good job at decorating for a sale. Maybe that's why realtors make more money from "staging" than they do from their cut of the commission.

We know a seller who kept up his morale for the 12 weeks of open houses it took to find a buyer who wanted a backyard inground pool. He didn't worry about the lack of offers because he knew that he wasn't getting "pool people" at his open houses. Eventually word got around and he got his full price.

If you know what you're doing, interior paint in neutral flat/semi gloss is appreciated. But we've had to beg sellers to stop fixing up the place... they'd paint high-gloss right over the flaking wallpaper paste.

I wouldn't replace the carpet-- no telling what color/style the buyers will want. But a thorough cleaning & perhaps a retuck of rumpled areas will show better.

I think it's better to devote your efforts to lighting, cleaning, and decluttering. For example if the water heater is clean and the area around it isn't cluttered, it's easy to believe that the homeowner has paid some attention to it over the years and that it isn't likely to fall apart the month after the purchase. Same thing for bathtub/shower grout.

Gotta find a realtor who'll work with you. If you get a Martha-Stewart "Oh, no, this will never do..." type then it's going to be a long listing.

 

[wallygator69]

Hi,

I just fixed up my entire house prior to sale. New Counter tops in the kitchen, hard wood in kitchen, new decent carpet top to bottom, and finshed the entire basement off. (Yes, all by myslef).

First person in the door bought it and had been looking with our realtor for 3 months.

They loved it but are going to replace the new countertops with corian and going to replace all the first floor carpet with hardwood.

Realtor says without all the work they most likely wouldn't have been interested.

This is my second house that I did major work on to make "better than new" and people always comment that no one loves a house the way I do. Goes a long way to resale in my opinion.


If it is beat up, IMHO, buyers don't look at as loved.

With the prices folks are paying these days, I think it's worth the effort.

W

 

[riskadverse]

As a seller - fix it up. As a buyer look for the place that needs cosmetic fixing up. Most buyers don't have much imagination, so if it is a wreck they won't be able to see past the problems. In a new subdivision they could sell the model homes, exactly as is, 10 times over. It is frustrating to make improvements you'll never get to use, but as CFB said, you should have made those fixes when they were needed.

 

[lazygood4nothinbum]

i recently did about $20k of interior improvements to my residence to make it nicer for me to live in for the next few years and to increase marketability. i'll still sell as-is but the next buyer can be someone who wants to live here, or more likely, tear it down. as to the waterfront house i'll inherit, we'll either sell as-is, tear it down & sell an empty lot or build a 5-6,000 sf house and sell to some rich guy. decision pending. anyone know some rich guy who wants to pay $50-60k/year in property taxes?

 

[thefed]

why would you tear it down? would an empty lot REALLY be worth more than the same lot WITH the house? Must be worth SOMETHING if taxes are 50k/yr

 

[Craig]

Our experience is that the average person greatly overestimates the cost to repair issues in a home ... thus, we believe you're usually better off to make the place show well, and fix the obvious stuff.

Having said that, in a very strong market, this wouldn't have the same importance ... though I think we're past those hyper markets in most areas.

Best of luck.

 

[gtmeouttahere]

Do ALL cosmetic repairs and make sure the landscaping is looking good. Presentation is everything so get a good agent as well.

Cosmetic repairs cost little but pay off BIG. Also it gives the "impression" of a well maintained home. It makes it more appealing on the market and you will sell faster as well as make more money. Who wants the added hassle of showing your home to dozens of people when it could have been just a few. There is a lot of stress selling your home already. Why prolong it?

If you leave it as is, you may get the attention of a "flipper". They are trying to make money off of your home, so you wont get a high price IMO. They will spend the few thousand dollors you should have spent and make a $10,000 to $20,000 profit.

 

[lazygood4nothinbum]

why would you tear it down?  would an empty lot REALLY be worth more than the same lot WITH the house? Must be worth SOMETHING if taxes are 50k/yr

as no one is building new waterfront land and there's none left, in that area the value is in the old land, not the old house. the 50-60k/yr would be prop tax based on a new 5-6k sf house on that property. i know, it's a bizarre concept to us too. and we live here.

 

[wabmester]

as no one is building new waterfront land...

Aren't you in that killer huricane zone? That must create some new waterfront property once in a while. Did this huricane season have any effect on land value?

 

[unclemick]

Hmmmm

There is plenty of 'new waterfront' where our house used to be - post Katrina. In fact about 9 miles of newly vacant land.

heh heh heh heh heh heh heh heh heh

Posting this on a hill in MO near the local tornado siren - hee, hee!

 

[jug]

Interesting question, fix up or sell as is.

Neighbor with same house recently did a 35K fix up with new kitch, top of the line and 2 new bathrooms and new windows.

He is in contract for about 465K

I did jack squat, put cheap kitch in 2 years back, did nothing, interior looked good enough. Still got old windows, they still work fiine.

I just got binder for 430K

So he got 30K more, but I put in 30K less and did not go through the aggravation of fixing up.

So it came out even.

This is my experience.

Jug

 

[lazygood4nothinbum]

Aren't you in that killer huricane zone?   That must create some new waterfront property once in a while.    Did this huricane season have any effect on land value?

we got direct hits about three times in the last two years. one came right over us but was nothing by the time it got here. katrina got us with both the east and north eye walls (jogged while over us) but was just forming so wasn't too terrible, the last one put our lights out for more than 2 weeks. odds are we won't get a direct hit again for another 20 years. but i'm not a betting man & wouldn't bet on that if i was.

the real estate market seems to have a short memory when it comes to disaster. infamous andrew devastated homestead in 1992.

city-data.com/city/Homestead-Florida.html
Single-family new house construction building permits:
1996: 12 buildings, average cost: $47,400
2004: 1941 buildings, average cost: $140,100

realtor.com shows 2 houses for sale under $100k, 22 houses under $200k, 55 for sale under $250 and the rest over that. i don't know for certain but i would bet that's three or four times what they got before andrew.

we did notice a slowdown here after wilma but it is hard to attribute it to any storm psychology. we were without electric for a while so took a few weeks for companies to rev-up. closings took longer because damage had to be assessed & addressed. also wilma hit late in hurricane season and seemed to correspond to the general slow-down of the real estate craze. so did wilma hurt us? did we bubble? if you call slowing down from 30+% to our current ~15+% increases, sure, why not.

 

[LRS]

Jug has a point. I recently sold my parents' house as is, cash on the barrelhead. We figured the minimum fix-up for meeting code/loan approval would be in the neighborhood of $10,000. Now we are watching to see if the buyer "flips" it. I figure if they paint, replace carpeting, tear down non-code structures in the back yard, put in all-new gutters, re-roof the garage and a few other niceties, they might be able to get their investment back plus a few thousand. Or maybe not. The market is not what it used to be, and the house is a "unique" property (one bedroom, one bathroom).

I have no regrets. Since it was sitting empty and uninsured, I am glad to have it off my hands.

 

[cute fuzzy bunny]

Sounds like a good time for a 5 gallon can of gas and some 'careless' activity that ends badly.

 

[sgeeeee]

A smart buyer will prefer the house "as is" so they can get a lower price and do the repairs their way.

My experience is that there are almost no smart buyers.

If you don't do the painting and needed repairs, you will likely pay for it in time on the market and price.

 

[cute fuzzy bunny]

My experience is that there are almost no smart buyers.

Ding ding ding!

I remember househunting with a former girlfriend. She'd turn down a property because she didnt like the tile in one of the bathrooms or because the house had too many trees on the property... :

 

[ladelfina]

Yeah, when I bought my house in '93 (2-family in a desireable area of Boston), it was listed at $180k. I hired a fancy RE lawyer complete with monogrammed shirt to deal with the negotiations (more than worth his $2k fee) who got them down to $133k after inspection. "Comps" were running $220-$240k. One wall was literally peeling away from the rest of the house.. you could stand in the second-floor LR and look down at the sidewalk outside from the 3" crack where the ext. wall and the floor were supposed to meet! 

Charles is right:

the average person greatly overestimates the cost to repair issues in a home

Actual cost to re-build about half the foundation and haul the wall back into place about $12k. Big new two-story deck $16k (to replace dangerously rotting old one; coulda been half that with cheaper materials and a more traditional, smaller design). New garage doors $1-2k.

I could have stopped there, but, flush with my "good fortune", I blew the rest of the difference on a swanky new kitchen, new baths, new plumbing, new electrical, architect, moving walls and doors, refinishing floors, painting, etc. ..young and foolish, I guess..but I did love the K&B and miss them to this day. Anyway, upshot was that I got exactly the house I wanted, spending less than I would have for a normal "non-fixed-up" property. All because nobody else could get over the sickening feeling of seeing the street below peeking up through the LR floor.

Even 10 years afterward, there weren't really any similar houses that were as nicely fixed-up so mine sold in a week. Moral: if you're a seller, it's worth fixing up, at least cosmetically and to keep in line w/other market properties (go to some open houses in your area). And, if you're a buyer, it's worth fixing up as well, IF you have a competent inspection, good negotiating skills, and good luck. I think the reason most buyers don't is probably time constraints. 2 people working w/2 kids would not have taken on my poor, broken house. I was renting down the street and worked from home, so I had the flexibility to run over if there was an issue. Also, it's probably easier to finance a higher mortgage off the bat than deal with a mortgage and then coming up with cash or loans for repairs.

As tryan says, absolutely do the paint and get carpets cleaned unless they are ragged, in which case, replace. Some degree of staging is important, as is de-cluttering. The sad thing about selling my house was how great it looked while we were showing it (all spic & span!.. not its usual state, unfortunately).

-in the fixer-upper camp