Selling a house that needs renovation can be difficult.
So, if you’re thinking about how to sell a house that needs renovating or restoration, you might be in doubt whether you can find a buyer.
The truth is most buyers will not show any interest in a house that is in bad shape. Where does this leave you? You certainly have many questions; when is it best to sell a neglected property? How does selling a house that needs work compare to marketing a house that is in good condition? How much do you lose selling a house as is? Should you do any repairs or pass them on to the buyer? What effect will failing to renovate have on the value of the house? Which is the best place to sell a house that needs updating?
Don’t let these questions overwhelm you. We’re here to answer all your questions.
In this guide we give you all the information you need when selling a run-down property.
Let’s dive in…
Selling a run down house – is it achievable?
What makes a house unsellable? Well, the first thing that comes to mind when you see a neglected house is it is unsellable. But it’ll be surprising to know that this is not always true!
The truth is that even if your house is in poor condition, you’ll still find a buyer. Only that you must manage your expectations in terms of the sale price and the time it’ll take to find a buyer.
Aim for the right audience
The thing about selling a house that needs updating is that you need to have the right target audience in mind. While most buyers will want a house that requires minimal hassle, there’s a section that is keen on buying a house that needs work.
Some of the prospective buyers that are ready to buy houses that need renovating include developers, buyers constrained by budget, house buying companies and property owners who want to expand their buy to let portfolio. Here are different categories of buyers you must be aware of:
- Flippers – These are interested in property they can fix and sell fast and easily. They’re always looking for a bargain even though they have a decent budget for renovations. They want to make a profit from the sale.
- First time buyers – These look for a project and a bargain. Since they don’t have a big budget for major repairs, they negotiate on the asking price especially where the survey flags structural issues.
- Developers – Like Flippers, they’re professionals in the property business hence have the backing of a big budget and of course a lot of experience.
- Bargain hunters – These are people who are keen to get property that doesn’t require a lot of work but is in the right catchment area or neighborhood.
- Property owners – These look out for property they can amend or restore before they can rent it out.
So, you don’t have to stress about a run-down property. You just need to find the right marketing approach.
How much do you lose selling a house as is?
It’s obvious that a home that is in poor condition will fetch a little less than a home that is in good condition and in a prime location. Hence the question, how much do you lose selling a house as is?
The truth is the value of a neglected house will depend on several variables factored in the valuation. However, you can do certain things to know how much your neglected home is worth.
Taking stock of what’s not right and compiling a list of crucial repairs you must do to inject life into the property. This is important because it will help in improving your valuation and make it a lot easier to market the property. Since you can easily get quotes, you will know what buyers must invest to restore the house to its lost glory.
Location! This relates to fixer uppers and must be factored in your property’s valuation. Look into the local housing market to have an idea of the value of your house once the work is done. Naturally, buyers want to see a reasonable profit from the work they’ll put in. However, you don’t have to give everything away. Find a middle ground.
The other way to tell how much you will lose selling a house ‘as is’ involves engaging a highly regarded and reputable local estate agent to give you an expert opinion of how much your property is likely to fetch when you market it ‘as is.’ Let them know your position from the get-go and if you want a quick house sale or are flexible with your timescale.
This way, the agent will give you a reasonable market appraisal that takes your personal circumstances into account. Your goal is to get a realistic figure. However, this may vary slightly if you can wait. So be transparent and honest about your situation from the beginning.
Should you repair anything at all before sell a house that needs work?
This is a common question when you want to sell a house that needs renovating.
And the simple answer is no.
This is especially true when you want a fast exit or lack the finances to put in. This also applies to restorative work on personal and highly emotive areas like kitchens and bathrooms. Often, sellers revamp kitchens to bump up the asking price only to end up failing miserably.
The return on investment on this work isn’t worth it making it a waste of money, time and resources. It’s certainly not a smart move.
So, what renovations are worth doing before selling?
Interestingly, there are several small repairs that are worth taking on. For instance, you can improve the kerb appeal for a better first impression. The rule of thumb here is to focus on those repairs and improvements that will highlight your property’s potential without costing you much. Otherwise, forget about everything else as a fixer upper.
How do you sell a house in poor condition that needs work?
Just like you’d do when selling a property that is in good condition, you can find a buyer for your run-down house from the open market, auction or house buying companies. Here’s how.
- Open market
This is the last place on most sellers’ minds. It’s almost impossible to imagine that you can find a buyer for a house that needs work in a property market. Yet, this is one of the best places to begin your search for a buyer.
While it’s true that many people will have no interest in your run-down property, in the end, you only need one buyer who may be looking up their options on the property portals just like any other buyer.
If you choose to sell a house that needs renovating on the open market, then one thing you must pay attention to is finding the best estate agent. Your choice of agent will have a direct impact on how much you can sell your house for. Most importantly, it helps to ensure you go through the sale with little to no fuss and stress. Therefore, taking your time to make sure to find the right agent will certainly pay off.
- Auction
Selling your house at an auction is a good option to think about when you want to sell a house that needs updating. However, most sellers are put off by the upfront costs or uncertainty of price. Generally, about 25 % of the auction ends up being unsold.
Most sellers assume that property owners, developers and quick house buying companies only look out for property at an auction and so it’s the tight place to market the house. The thinking is that once you have two prospective buyers showing interest in the property, there will be a bidding war eventually smashing the guide price.
Unfortunately, this doesn’t always follow this script so set a realistic reserve price.
Always keep in mind the buyers you’re selling the house to and why the house needs renovation. This will help you to find the right buyers. This doesn’t mean you should overlook auctions as a possible place where you can find buyers for your property.
- House buying companies
House buying companies are often the best when selling properties that would ordinarily be difficult to sell either because they need renovation or for whatever other reason. This is because you don’t have to worry about making any upfront costs before or even after the sale is complete.
Even then, when you choose to sell your house through this option you must be ready to accept an amount below the valuation of your house. Moreover, you must take time to research about the company you want to sell your house to. This is because there are some rogue companies that are not transparent about their processes hence may want to take advantage of you.
For instance, a quick house buying company may accept and agree on a price only for them to reduce it at the last minute. This will usually involve a significant drop in the price, sometimes even a third of the initially agreed price. This can be quite frustrating.
So, you need to take caution when selling to house a quick buying company. Some of the things you can do to protect yourself include asking for proof of the company or request to see their fee structure in writing before you sign the dotted line.
You don’t want to be given an astronomical fee when you can no longer back out. So don’t let this happen to you.
- Sell the home yourself
You can also decide to not to use any of the above so that you sell the house yourself. While this is possible, you must keep in mind that you must take care of the valuation, viewings as well as deal with the solicitors.
Most importantly, you must make sure you advertise your home in the right places to ensure you get the most from your listing. The goal is to reach as many potential buyers as possible.
In Conclusion
Now that we have answers to the questions you had about how to sell a house that needs work, you are now equipped to continue with the sale of your house that needs work.
The process of selling such houses shouldn’t be stressful. You simply need to have the right information and people to help you through every step of the way.
Ultimately, quick house sale companies will always stand out when selling a house that needs work because they are ready to buy any house on as is basis. This means that you don’t have to worry about making any improvements to your home before selling.
