Many Nashville and Middle Tennessee homeowners are asking how to sell a home that needs repairs. In this article, we are going to be talking about how much repairs you should do to get top dollar and if you should work with a real estate agent, sell on your own, or sell to a direct buyer or investor.
Not all homes to be sold are in a marketable condition for the open retail market with a real estate agent. The real estate market prefers and even demands some homes be beautifully renovated or updated before listing. Other market areas in Middle Tennessee are not as discerning.
The key is determining the market your house is in and its current condition. You will need assistance in evaluating the home’s current condition and the cost of repairs required to meet market expectations in your part of town.
You should first create a plan for your home based on your neighborhood and buyer’s expectations. Soliciting the aid of a really good real estate agent who knows your neighborhood inside and out will really help you determine the extent of your upgrades, remodeling, and repairs. The agent should also advise you on the expectations of the buyers for your neighborhood.
A general contractor can help you with the costs of remodeling and updates. The home inspection will prepare a list of all things needing repairs and updates particularly those things behind the walls, under the floors, and in the attic. This will greatly help you with your decision about which items you must upgrade and repair and which things you can leave.
The questions you want to answer are do you want to renovate, remodel, upgrade, just do some repairs to your home or sell as-is. What have your neighbors done to sell their homes and to what level of remodeling have they done?
Repair List and Budget
Based on your research, you will want to create a priority list of items that will give you the highest ROI, return on investment. What areas should you work on first and to what degree of quality? Are there items that can you label as low priority or skip altogether? After your repairs list has been completed with itemized costs, then you can begin calculating your budget and possible after repair value (ARV) of the home.
Your Neighborhood is Your Gauge
Your neighborhood will help you to determine the things needed to spruce up your home and to what level of quality is required. For example, are other homes in your area using quartz, granite, or laminate for countertops? Do your neighbors also use the same quality of kitchen countertops in the bathrooms? Should you take down a wall or two while adding a support beam for a more open concept? Do other homes have existing wallpaper from 20+ years ago, or are they using accent papers and the newest paint palettes? Are you going to replace your appliances, and if so, to what level: basic package, mid-range, and brand, or high-end brands like Wolfe, Viking or Thermador?
Big Ticket Items
Some of the big-ticket items may need addressing depending on your neighborhood. Some neighborhoods even in Smyrna and Murfreesboro expect newer roofs like 10 years old and newer. Other areas you might be able to keep a 10- or 12-year old roof without replacing it for the sale. Your heat and cooling HVAC system may have to be replaced if its 12 years or older. The same goes for the water heater.
These are some very difficult and personal questions you have to ask yourself. Perhaps the most difficult aspect of this whole project is not letting let your own personal tastes determine your choices of color, décor, and remodeling. Again, you are making choices for the masses and not you. Also, do you have the fortitude and patience to go through lots of construction? If you are beginning to have doubts about your home, then take a look at this article “How to Sell Your Home Quickly.”
Can You Afford to Fix the House?
As a home seller, are you in a financial position to renovate the home or make some of the upgrades and repairs? If you have the money and the time for a nice update or remodel, this will reward you with the most money for your home sale. (You may want to read our article 7 Things Homeowners Don’t Know About Selling Their Houses in Nashville).
However, if your funds cannot cover all the repairs, perhaps consider borrowing money from your bank. (HELOC, home equity line of credit.) If you cannot afford to make these improvements nor have the stamina, then maybe your best alternative is selling to an investor.
Buyers Want “Like New”
A home appearing in need of major repairs and upgrades is difficult to sell. Most buyers are not in a position to make or are frightened by repairs and remodeling projects. They want a perfect home that does not require any projects.
Whatever your decision is for repairs, you should now consider how you want to sell. Do you use a real estate agent, or try to sell the home on your own? If you decide not to make major repairs and updates, you will probably want to sell it to an investor who will buy your home in as-is condition meaning no repairs to be done.
Real Estate Agent
The real estate agent will list the house on the MLS, Multiple Listing Service, for you. They will also market the home, handle all the negotiations and paperwork for you. They will even suggest a title company for you. But agents don’t work for free. Their commissions for both sides of the sale are 5% to 7% plus most charge a few hundred dollars for transaction fees.
For Sale by Owner
If you decide to sell the home yourself, you can save a lot of money. Be prepared to pay a commission to an agent who brings a buyer to you. Do keep in mind you will have all legal documents ready for the buyers and a title company on standby. Also, be prepared to show your home to complete strangers day and night. You really need some type of screening process before letting just anyone come in and browse.
The Direct Buyer
The third option of selling your home is the easiest process, sell to an investor or direct buyer. Investors buy homes in as-is condition and can close quickly for you. You will not have to make any repairs, nor pay for an inspection, no commissions or fees involved, just accept cash at closing.
A good direct buyer will meet with you in person, review the home, and work out an offer that is satisfactory for all. A great investor will not pressure you, give you plenty of time to make a decision, and work around your schedule for closing.
We at Southern Homes Investments are locally based direct buyers, and we go one step further; we pay the seller’s closing costs. We buy houses in Nashville and surrounding areas and can close quickly in as little as 7 days. If you would like to know more about us, please visit our website at SouthernHomesInvestments.com, or call us at 615-235-0612. We would love to speak to you about your home and see how we might work together.
I hope this article about how to sell a home that needs repairs is helpful to you. You have many considerations and options to think through, and finally how will you sell your home. We wish you the best in this process and your conclusion.
Disclaimer: David Wright is a licensed real estate agent in Tennessee and this article is not a solicitation to list your home.