The following is a guest post by Hank Coleman, who is the publisher of the popular personal finance blog, Money Q&A.
If you’ve been waiting to sell your home until the housing market improved, then 2017 might be a great year to put up the “For Sale” sign. A new report from the National Association of Realtors (NAR) found that home prices rose in nearly 90% of markets throughout the United States that they measured in 2016. Additionally, a majority of housing markets in the U.S. have reached or exceeded their previous all-time high sales prices since the NAR began tracking this information in 2005.
Now may be a great time for folks to sell their homes, especially with the tight supply of available homes for sale and large demand for them at the moment. If you’re considering the possibility of selling your home this year, one of your most important decisions will be whether or not to make repairs and renovations on the property before listing it.
Choosing to sell your home ‘as-is’ comes with a number of benefits and drawbacks. So, it’s important to seriously consider your options to avoid making mistakes while selling your home. Here are a few things to consider when selling your home in its current condition.
Selling Your Home in its Current Condition
Pro: Save Money on Renovations
Did you know the average cost to replace a house’s roof ranges between $5,000 for basic, asphalt shingles on a smaller home and $25,000 or more for higher-end roofing material on a larger residence? Another example of jaw-dropping home repair costs: if you need new carpeting before presenting your home to buyers. The national average cost for carpeting replacement (for installation fees and materials in a 16×16 room) can range be between $1,200 to $1,400.
Replacing, refurbishing, and cleaning anything in a home to prepare it to go on the market can cost you thousands of dollars too. All of the little expenses that add up, such as new windows here and there, cabinet replacements, new paint in one of the bedrooms, and so on. There are certainly some home improvement projects that add value to your home. But, since there is no guarantee that you’ll be able to recoup your expenses once it’s up for sale, you might want to sell your home ‘as-is’ to avoid the exorbitant costs of repairs and renovations.
Con: You’ll Have to Ask a Lower Price
As with anything in life, you get out of it what you put into it. While putting in repairs and renovations are not surefire strategies to get the price you’re asking for, you might have to be willing to drop your asking price lower and lower for a home being sold ‘as-is’ until you find interested buyers.
On the bright side, if you chose to sell your home in its current condition on your own, you could save quite a bit of money on realtor fees, which average 6% for many home sellers. This tactic leaves you responsible for all the pricing, negotiating, advertising, and showing responsibilities. But, if you are willing and have the time to sell your home on your own, you could offset the lower asking price by forgoing the traditional realtor option.
Pro: Sell Your Home More Quickly
If you’re willing to be flexible on the asking price, then you could sell your home faster than if you waited for a handyman to complete all of the repairs before putting it on the market. Replacing carpeting, revamping your backyard landscape, and reworking your home’s plumbing systems can take weeks or even months, in some cases between the initial process of selecting the new material and hiring contractors to sweeping up dust upon the completion of the repair projects.
Anyone who is going through a difficult life event or needs to sell their home as soon as possible may not have time to wait for contractors to make repairs. So, putting your home up for sale in its current condition might be your best bet.
Con: Property Might Violate Building Codes/Restrictions
If you’ve owned your home for several years, then your city or county’s regulations in regards to housing and other property types might have changed without you realizing it. Although these cases are rare, it’s important to be aware of and fix any possible violations of building or property codes that could prohibit you from successfully closing a sale on your home. Or, you may simply be able to disclose the home’s non-compliance with building codes and lower your asking price accordingly.
Selling a property in its current condition can be a lucrative decision that helps you save money on costly renovations that would’ve seriously dented your bank account before your home ever hit the market. However, the decision to sell ‘as-is’ has its own set of flaws too. So, be sure to research your options before deciding which route is best for your situation.