Should I Fix Up My Home or Try to Sell My Home As Is in Philadelphia?
Are you trying to sell your Philadelphia home? One of the first decisions you’ll need to make is whether you want to fix it up or sell it as is. Many sellers decide against fixing up their home because of the amount of labor involved — while others find themselves investing far too much in their property and are ultimately unable to recoup the value. Here’s what you need to know.
What Type of Repairs Does Your Home Need?
Needing new carpet is far different from needing a new roof. You need to begin by assessing your home’s current condition, considering the different types of repair:
- Minor, necessary repairs. These are repairs that are necessary but affordable, such as a new entryway door, or a new window. They have to be done by someone, but they’re relatively easy.
- Major, necessary repairs. These are repairs such as new roofs, new HVAC systems, and so forth: repairs that will need to be done to make the place habitable, but are significant investments.
- Minor, cosmetic repairs. These are repairs that are necessary for making the house look good, but don’t change the house’s structure. These include new paint and new trim.
- Major, cosmetic repairs. These are repairs that are intended to update a home significantly, even if they aren’t necessary. Think: granite countertops and hardwood floors.
Once you’ve made a list of the repairs you need to do and separated them into these four categories, you can move on. Do a complete walkthrough of your house, and if you aren’t sure what repairs you need, contact a home inspector in advance. If you don’t, your buyer will — you don’t want to be surprised by repairs you didn’t know were necessary.
Do These Repairs Have a Positive ROI?
Minor, necessary repairs often have a positive ROI. A new garage door can cost $1,000 but improve the value of your property by $2,000. Major repairs, on the other hand, usually don’t have positive ROI. You can spend $50,000 on a kitchen update and only increase the value of your home by $20,000.
This is because there’s an upper ceiling on the amount of value a home can have, usually determined by its neighbors. If your home is worth $250,000 and it’s surrounded by other $250,000 homes, it’s not likely to go beyond $300,000. If your home is worth $150,000 and surrounded by $250,000, on the other hand, major cosmetic updates may be more useful.
Even necessary updates don’t always have a positive ROI. Consider an HVAC system. Your home may be valued at $180,000 without an HVAC system and $200,000 with one. If it costs you $20,000 to put in a new HVAC system, it may not make sense; you aren’t actually gaining any value.
To determine the ROI of a repair, you need to look at how much your home costs now, and how much it will sell for once your repairs are complete. This is a very different number from the amount that you spent on the repair.
Can Your Home Sell Without the Repairs?
When it comes to necessary repairs, it’s possible that your house won’t sell without them. For instance, if your roof is damaged, most people aren’t going to buy a home with a damaged roof; there are too many other structural problems that could be involved.
This is always a consideration when selling a property as-is. An as-is property is naturally less desirable to the average consumer, because they don’t know the true costs of the repairs, and because they may fear that they’ll find further issues as time goes on.
That being said, as-is properties are still fairly common on the market. Usually it just means that a seller doesn’t want to take responsibility for any issues that are discovered later on. So while it can be a problem to sell a house without repairs, it isn’t necessarily a complete deal breaker.
Selling Your Home As-Is in Philadelphia
There is an easy way you can sell your property without fixing it up: selling it to a cash home buyer. Cash home buyers purchase properties in order to renovate them, so they aren’t dissuaded by even major, necessary repairs. Further, since they regularly renovate and remodel homes, they know the true value of a property and the renovations that will be done.
If you can avoid renovations, you usually should. Not only do they take time, but they usually don’t have a good ROI. Most renovations are going to cost more in time and money than you’ll ever see in the sticker price of your home. You can’t always anticipate which renovations will be high ROI, either; often, you may be surprised to find out what buyers actually care about.
The problem is that the average buyer may not be able to look past even cosmetic issues in a property, and that’s where professional, cash home buying companies step in. These companies are able to give you good value for your property without asking you to make any changes at all.