5 Solutions to Still Selling When You Need to Make Repairs
So, you think you need to make repairs, before you can sell your house (or condo)? Not so fast! I have five solutions to still help you sell!
When a seller client initially calls me, the start of the conversation is usually some variation of this:
"Scott, we want you to come take a look at our house, but it isn't ready to hit the market yet. We have some things we need to do, first!" Those "things" could be a handful of small improvements, or could even be some rather large repairs.
So, I always assure people that most everyone isn't "ready" to hit the market, at our first meeting. Then I visit their house and come up with a plan to maximize the amount of money they will make, when they sell. All, while keeping their "prep" time and money, to a minimum.
So, if you feel like you definitely need to do some "things" before hitting the market, let's connect, to come up with a plan for maximizing your sales price. In the meantime, here are five solutions to still help you sell, even if you need to make some repairs or improvements.
Sell "as is"
In most cases, a buyer working with a Realtor®, to buy your home, will use a standard offer to purchase contract, jointly approved by the N.C. Bar Association and the N.C. Association of Realtors®. This is important, because what most people (both buyers and sellers) don't realize is, that contract actually says a buyer is buying a home (or condo) "as is." So, as a seller, if you get an offer written on that templated document, you aren't actually required to make any repairs that a buyer might request.
This is definitely the best option, if you don't plan on making any repairs. However, keep in mind, sometimes selling "as is" could mean a slightly lower sales price, because most buyers will look at something that appears to be a defect in the home, and overestimate what they think it will cost to repair/replace that deficiency.
Make Small Improvements
"Small improvements" is such a relative term. But this option is a great one, to really maximize the amount of money you get on your final sales price. Small improvements are typically going to include repairs or improvements, where you can have them completed with minimal cost, but with big impact in the eyes of a buyer.
Let's say for example you have an area that really needs to be painted, to freshen it up, and you are able to get that done for $1000. In most buyer's minds, if they saw that area unpainted/dingy, they are going to double or triple their estimate, of what something could actually cost. So, while you can get the work done for $1000, the buyer thinks it cost you $2000 to $3,000.
Not every home needs paint, and that is just an example. But my point here is, if there is something you can do that is relatively minimal cost, most of the time, a buyer will see that and it will add to what they think the house is worth.
Offer a Credit at Closing
With this option, you could put your house on the market and not know if there are some small repairs needed. Then when the buyer is under contract on your house and gets and inspection, a few items pop up on an inspection report. Sometimes a buyer will choose the repair items that are most important to them, or what they consider "dangerous" if they left them untouched and ask you to repair them.
So, in lieu of you actually making those repairs before closing, you could offer a credit at closing, to the buyer. This typically comes in the way of a closing cost credit. Meaning, you offer a dollar amount that is taken from your proceeds at closing and is applied to the buyer's total out of pocket amount.
So, if you had a few repairs that equaled $250, that you didn't want to repair, one option would be to offer the buyer a $250 closing cost credit. Then they would bring $250 less to closing, since you gave them the closing cost credit. Then after closing, it would be up to them, to have the repairs made (if they wanted to.)
Get Estimates for Repairs, but Don't Make Them
Sometimes there are items you know need to be repaired, but might be larger ticket items that you don't want to pay for out of pocket. But you don't mind paying for those items out of your proceeds at closing, if a buyer is paying you the sales price you want.
In this scenario, one option you could do, is get an estimate for the work, from a contractor, and provide that to the buyer. For example, let's say you know the roof needs to be replaced on your home. You could get an estimate from a roofing contractor and give that to any potential buyer. Then you'd give a credit to the buyer at closing (like the scenario above).
While this scenario might sound exactly like the scenario I mentioned above, with this one, you are being proactive about offering the credit, right from the start (before you even put the house on the market). With the scenario above, you are waiting until something pops up on an inspection report (after you are under contract with a buyer), and then offering the credit.
*Two caveats - this option can sometimes get tricky with a buyer's lender. They can frown upon this sometimes, if they think there is a major issue with the house that needs to be repaired. Because a buyer could possibly get the credit from you, but not have the repair made. Lenders also have limits on exactly how much a seller can contribute to a buyer in a transaction. So, even though this credit is earmarked for a repair, lenders still look at it as a seller contributing to a buyer's closing costs and downpayment.
Make the Repairs, with Delayed Payment
If a contractor will allow you, this option would have you making the repairs, but not paying the contractor until closing. It is very common for closing attorneys to ask if there are any invoices to be paid at closing. So, if you work with a contractor that doesn't mind this option, you'd have them make the repair, give you an invoice for the work, then we'd give that invoice to the attorney, to cut them a check upon closing.
Thinking of Selling?
Read about Addison & Kendra's recent experience of selling. Also, see video 📹 of them discussing the process.