Whether or not to fix before selling is a debate that crosses the minds of a lot of homeowners. A modernized property with no defects is always going to sell the fastest, so this makes the prospect of bringing the property up to its fullest potential appear even more attractive. [read more="Read more" less="Read less"]
Ultimately, your decision on the matter should come from a variety of factors, including how much cash you have on hand and the timeframe in which you intend to sell the home.
Repairs take time and money. If you have a lot of both, certain repairs may be worthwhile. Some repairs don’t offer any return on investment, meaning that you aren’t adding value that exceeds what you spent. Other repairs are absolutely worth the cash, provided you can spare it.
Roofs, for example, are one of the biggest deals to potential buyers. Nobody wants to buy a house with a bad roof, especially if they have to worry about weather conditions causing damage to the home before they even move in. The average cost of a new roof in New Mexico is slightly over $5,000. If your home really needs a new roof, the return on investment is worthwhile.
If your home requires a list of repairs, the costs are going to pile up quickly. It may not be worth spending $20,000 or $30,000 just to get your home to the point where it can command fair market value for a similar home in good condition. At this point, you aren’t genuinely adding value, you’re merely spending to minimize a loss. This is often less cost effective.
You’ll also be responsible for paying the mortgage, utilities, and maintenance costs as well as the fee for the repairs. Some repair lists can take months to complete, and this causes you to sink more money into the home than you may be willing to sink. If you find that it won’t be worthwhile, you can sell the home as-is. Traditional buyers probably won’t be interested in a property that needs repairs. These people want a home they can move into immediately. They want to start their lives, not wait for a construction crew.
Home investors are always looking for properties that need repairs, because they already staff contractors to fix and renovate the homes they purchase. These companies will offer you less than full market value for the home, but you won’t have to spend anything out of pocket. They don’t care about a bad roof or rusted plumbing – they’re already prepared to handle it.[/read]