A Guide to Selling Houses That Need Work in California
If your house has structural or aesthetic problems, selling traditionally in open markets might be challenging. Most buyers want to purchase a house that is move in ready and are unwilling to spend additional money and time on prolonged repairs to make it habitable.
Moreover, if the buyer’s agent perceives such issues, they actively undercut the asking price. This is even more prevalent in Southern California, due to a competitive real estate market and the above-national standards of home-buyers.
For these reasons, the easiest way to get the best value when selling a house in poor condition is to work with accredited and experienced as-is house buyers. However, it may be beneficial to consider selling to home buyers in the traditional market. Read this guide to learn more about the process of selling a house that needs work in order to make the best choice for your situation.
What Kind of Houses Need Work?
Certain aeshtetic repairs are easy, cheap, and quick. Often, owners make the fixes themselves, like replacing broken windows, cleaning, or repainting. Nevertheless, some repairs are beyond do-it-yourself projects and need licensed professionals. Here are some substantial problems that indicate a house is in poor condition.
- Roof repair or replacement: A damaged or old roof, including flashing and underlayment, might lead to water and additional structural damage
- Electrical wiring: Poor wiring is a safety and a potential fire hazard
- Visible structural damage: Events like fire, flooding, and earthquake can lead to holes, cracks, and other visible damage to floors, foundations, and roofs
- Foundation damage: When the foundation needs repairs, the house might require a costly piering and jacking process.
How to Evaluate Your Property’s Condition`
Often you can tell from a simple visual inspection if the house needs significant repairs. However, some problems are not immediately visible. You can seek the services of two or more experienced professionals and arrange a property tour at different times. Also, check the crawl space, roof, attic, and other structural parts of the house.
You can then use the inspection reports to obtain competing quotes from contractors. Your goal is to get a complete picture to draw a cost-benefit analysis.
Who Will Buy A House That Needs Repairs?
Before exploring your options, make realistic assessments on who will buy the rundown house. Most homeowners don’t want their childhood home turned into a tear down or rental, so they accept less money from buyers they feel they can trust. This is a common mistake since you have no guarantee the buyer will do what you prefer with the house. There are two types of buyers for houses that need work: homeowners or investors. Here’s a look at the two groups.
Homeowners purchase a house based on a long term approach of settling down and raising a family. They consider:
- External factors like the school district, security, and access to stores.
- Internal factors such as the bathroom, kitchen, and floor plan.
Investors purchase properties that need some work since they can turn them into rentals or, to a “fix and flip.” They typically aren’t looking for a house to settle down in.
How to Sell Houses That Need Work To Homeowners
Most upgrades and fixes don’t add much value to the price of homes. If you want another homeowner to purchase your house, you need to perform an analysis to determine how to get it ready. Below are the steps for selling to homeowners.
- Get Expert Opinion
The first step is to get advice from experts on how to get the house ready.
Real Estate Agents
You can call various agents to ask for:
- Comparative Market Analysis or CMA to determine how much the house can sell on the market without fixes and upgrades. The agent considers the latest sales in the neighborhood and compares your home to recent transactions. They also consider other tangibles like the type of kitchen counters and flooring.
- List of other comparable upgrades. If it’s not contained in the CMA, you can ask your agent to list comparable amenities in your neighborhood. For instance, if all houses sold the previous year had wood flooring, sport shag carpets might decrease your home value.
- The value such upgrades add to your home
- Other advice on how to sell your house fast for cash
The buyer will have a professional home inspector go through the house. To preempt this, you can hire an inspector before selling. Then, if they find any game-changers or safety issues, you’ll know earlier and get the property all fixed up.
Once you get information from the home inspector and realtor, you’ll have an idea of the kinds of upgrades and repairs you need. Call specialized subcontractors or general contractors for bids on fixes and upgrades to the house.
- Do the Math – Finally, look at your repair costs and compare them to the extra value the realtor estimates it will bring. For instance, when it takes $10,000 to replace the roof which only increases your home value by $5,000, it is best to avoid the remodeling project.
- Make Necessary Repairs – In most cases, it is worth doing upgrades or repairs. Most home-sellers imagine the need for a few fixes to increase their home value or are embarrassed by the house’s appearance and perform DIY projects. Instead, hiring professionals saves you time, as you don’t want the house to sit another month as you do minor repairs. It is best to stick to expert advice and analysis.
- Focus On Homeowners as Buyers – Finally, keep in mind your target buyers. You need to remove as much clutter and furniture as possible so that they can imagine themselves in the house. They need to see kids swinging in the backyard and riding bikes on driveways. Also, you want the clients to envision themselves snuggling up in the family room watching TV or hosting parties. Below are tips to help you achieve that:
- Clean the house
- Get rid of unnecessary stuff
- Mow the yard
- Highlight positives
- Be honest about the work needed
How To Sell Homes That Need Work To Investors
You can sell your house to an investor when you need a fast and straightforward offer for cash, or if it’s too damaged to be appealing in the market. This is because no matter the condition of your asset, there are investors that will make offers.
Selling the House “As-Is”
Technically, if you list the home “as-is,” it means you sell as-is to a company that buy houses in any condition and don’t make any repairs. Below are some tips to determine the best price when selling your home as-is.
- Determine After the Repair Value of the House – The first step is valuing the as-is property for an idea of what the home is worth when you do all the needed repairs. You can check online for the quick value of properties.
- Estimate What Repairs and Updates Will Cost – Offline and online guides for individual repairs help you approximate the costs.
- Determine the Fair Value of Your As-Is Home – If light updates or repairs are needed, you might list the house for sale online. However, when major repairs are needed, you can save money and time by contacting cash home buyers in Los Angeles California. Besides, realtors also turn to them when selling homes that need extensive repairs.
- Determine If It Is Worth Repairing the House – bTo the cost of repairs, add escrow fees, inspections, buyer concessions, appraisal costs, and other expenses related to the sales. In most instances, the added fees account for up to 12% of your home’s sale price.
It can be demanding to sell a home that needs work. In most cases, remodeling doesn’t pay back the original investment. Each type of buyer looks for different things, and it’s best to consider both when getting the rundown house ready for sale.
The good news is that Seller’s Advantage can provide hassle-free, quick cash offers for your property without costly and prolonged negotiation for repairs. You can close within 10-14 days in Ventura, Los Angeles, Riverside, and Costa Mesa. Contact us today to begin the process.