How do you sell a property that needs significant repairs? Probably a home that was constructed years ago or was left vacant for months. Abandoned homes are often in need of the most care. Sometimes there is an issue with the construction, and you start noticing signs of damage just a few years after the purchase. You can’t sell such a house in the retail market (quickly). What are your options? How do you sell a home with massive repairs?
You’re left with two basic options. Either repair the house or try to sell it as-is. There is more to the story as you can’t just decide about one possibility. Let’s review both choices to see which way is the best.
Selling a Home with Massive Repairs
Selling your home as-is has its benefits. You won’t have to experience the delays or the hassles that are associated with home remodeling. Review the FHA loan eligibility requirements since it’s considered the standard.
Before someone can purchase a house with an FHA loan, the property must go through an inspection. Your home must possess the necessary facilities such as electricity, drinkable water, staircases, weather protection, access to local amenities, and a fireplace….The lender can reject the mortgage application if the property is located in an industrial area or is not safe for living. The presence of asbestos or structural issues will result in immediate denial. Keep in mind that cosmetic issues don’t impose security threats, so they are not considered necessary.
It would be next to impossible to sell a house with structural issues. You can’t sell in the retail market because buyers can’t qualify for a mortgage. Unfortunately, such kind of repairs cost the most. It’s easy to apply a fresh coat of paint but replacing the roof is a different story. You can try finding a loan to repair the house. In some cases, it’s possible to get a Home Equity Loan.
There are pros & cons of using a loan for repairs. The rule of the thumb is not to take on more debt if you’re not sure about the ROI. Discuss the situation with a real estate expert in your area. Better talk to a local real estate agent and know the benefits of renovating your home. How much can you earn by repairing & selling your home in the retail market?
For better calculations, you need to know the exact cost of repairing the house. Get in touch with a local home remodeling company or find an experienced general contractor. How much will it cost to repair the house? It’s better to get three estimates so you can get a good idea of the costs. Once done, consider the resale value of your property. Let’s say the resale value is $250,000. Subtract the cost of repairs. When you list home on the MLS, you’ll need to pay for the commissions, which are usually 6% of the sale price. Then as the seller, you’re responsible for closing costs, which make up 2%-3% of the total price.
Some expenses are ignored, including the cost (and time) of building permits, inspections, and house warranty. You are undertaking a major remodeling project, and you can’t go without obtaining permits. Make sure that only licensed contractors are working on the job. Once done, you’ll need a home inspection and a contractor warranty that you can forward to the future homeowner.
For most people, remodeling a home is a headache. It’s more difficult, especially if you’re living in the same house. For significant projects, you’ll need to find a different residence, which adds to the challenge. If you’re not interested in the hassles, we can pay cash for your home right now. We work with sellers like you in difficult situations. Want to know the fairest price for your home in the given situation? We can provide you a fair cash offer based on the value of repairs, time, and the local data. You can take the offer, and we’ll buy within 7 days. Click here to get started with a no-obligation offer.