When you buy your first home and take on the burden of a 30-year mortgage, you probably do so with the idea that eventually you’re going to upgrade to a bigger house, a better neighborhood, or a more valuable property down the line. And if you sit on your home long enough, you’re nearly always going to see the value go up (even if it goes down first); at the very least you’ll build more equity in your property the longer you stay. However, you may at some point decide that you’re ready to move or that the market is ripe for a sale. Unfortunately, these circumstances may arrive sooner than you anticipate, and if you haven’t been attending to home maintenance, repairs, and upgrades in the meantime, your property could have some serious flaws that hold you back from making a swift sale. So you may end up stuck between a rock and a hard place. Should you fix your home or simply sell it as is?
The two main motivating factors in nearly any home sale are time and money, and generally, one will end up trumping the other. If, for example, you have a line on another property and you want to make an offer and start escrow proceedings, then time is clearly of the essence and you may be willing to take something of a loss so that you don’t have to waste any time performing fixes and upgrades on your current home. If, on the other hand, you’re in no hurry and you want to get the greatest possible value from your property, you may be willing to put off your search for a new home in favor of spending some time on the upgrades and repairs that are going to net you a higher price when you sell. Of course, there may be other factors at play.
For one thing, most buyers will insist upon a home inspection before the sale goes through, or at least their lenders will want one before they’ll agree to finalize the loan. This could turn up issues that you have to fix if you want the sale to proceed. For example, most lenders won’t agree to offer a loan on a property that has a leaking roof, faulty electrical, or building code violations, just for example. While the buyers may be able to get around this by contracting for work in order to prove to lenders that the problems will be fixed, they’re going to want allowances in pricing if they have to address these issues after the fact. In short, you’ll have to decide if you’re willing to fix such problems on your own in order to control and minimize costs, or if you’re willing to take a loss by making allowances for the new owners.
One thing is certain: you’re going to get a lot more interest from your listing on Zillow or Movoto if your home is in good repair and features plenty of modern upgrades. While you can certainly sell your fixer-upper opportunity, as is, to a particular demographic of buyers, they’ll expect lower-than-market pricing. So you’ll have to think long and hard about whether your motivation for selling hinges on time or money before you decide if it’s in your best interest to fix up your property or simply sell it as is.