Can you sell a home that needs renovations?
Sometimes a seller wants to put their home on the market even though the structure needs several renovations. They’d rather “just get out,” given the work needed, instead of investing time (and money) into getting the repairs done.
But is this really a good idea? Will potential buyers be interested in a home that needs work?
The short answer is yes. However, there are things to take into account before you set your asking price and list your property. Here are some quick tips on how to sell a home without doing needed renovations on it.
1. Take into account the potential cost of the renovations
Here's an example. If your house were in good condition, it would sell for around $265,000. But you estimate that the necessary repairs will cost approximately $20,000. So, it’s more realistic to ask for $245,000. A more reasonable price will make it easier for the buyer to accept the idea of investing money in renos. It can also be a great negotiating tool.
2. Offer more inclusions than originally planned
When the buyer knows they will have repair costs in addition to their mortgage, it can seem a daunting financial commitment. But if you offer some valuable inclusions, such as light fixtures, window treatments, appliances (fridge, stove, washer and dryer), tools, or lawn care equipment, these can help offset the costs of the renos in the buyer’s mind. This can make the purchase seem less overwhelming, since they are getting a little extra.
3. Be open to negotiating
Don’t be afraid to use the word “negotiable” in your listing. This shows potential buyers that you are open to discussing the final price. It doesn’t necessarily mean you will have to substantially reduce the price at which your home is listed. But if you’re trying to sell a home that needs work, you also have to be prepared to negotiate in order to find common ground.
4. Be up-front with buyers
Don’t pretend that your house is in tiptop shape if it isn’t. Being honest and up-front about the state of the property will help you gain potential buyer's trust more easily. It may also help you avoid potential repercussions from selling a home with hidden defects (which can be a concern even after the sale is finalized).
- The legal warranty: Protection against hidden defects
- Filling out the Declaration of the Seller in complete transparency
5. Selling without a legal warranty
Are you worried about being sued for a hidden defect? Evaluate the possibility of selling without a legal warranty, at the buyer’s risk and peril. Note that this type of sale may put off some buyers, so you might need to lower your price. One final tip: If you plan to sell without a legal warranty, say so in your listing. This will prevent many needless visits.