Should sellers repair defects before selling?



After years of living in a home, it's easy to fall into a habit of overlooking home maintenance chores. If there's no urgency, many homeowners procrastinate. Often problems don't get fixed until a major disaster occurs like a roof leak in the middle of a monsoon.

Deferred home maintenance can become a problem, however, when you decide to sell. Most buyers want to buy homes they can move right into without having to make a lot of repairs. Sellers need to decide before they put their home on the market whether to fix deferred repairs or leave the work for a future buyer to do.

Usually sellers who have the time, money and inclination will do better on the sale of their home if they fix problems before they list their home for sale. A home that is in move-in condition is one that appeals to a broad audience of prospective homebuyers. First-time homebuyers, and buyers with busy lifestyles, often won't consider buying a home that needs a lot of work. They haven't the time or experience to deal with the problems.

The listings that are in the best condition are in the highest demand. They can attract serious attention from more than one buyer. If multiple offers occur, the price sometimes gets bid up. Regardless of whether there are multiple offers, a house that is in good condition will usually sell more quickly than one that needs work. And a quick sale often results in a selling price that is close to the list price.

Sellers who don't make needed repairs before putting their homes on the market may have difficulty selling, depending on how much work is needed. Because "fixer-upper" homebuyers make up a small portion of the homebuyer market, there will be less overall interest in the property than there would be in a similar property that is fixed up. If your home needs a lot of work, it could take a long time to sell and it might sell for considerably less than it would fixed-up. Usually the longer a listing sits on the market unsold, the lower the ultimate selling price.

Selling a home that needs a lot of work could delay the closing if the buyer's lender requires that the work be completed as a condition of granting the mortgage.

One homeowner sold a home that needed about $25,000 of termite and dry rot repair. The buyer's lender said the work had to be completed by close. The buyer and seller both wanted a quick close. But the job was so extensive, and combined with intermittent delays due to rain, it took about two months to complete the work.

FIRST-TIME TIP: Most sellers can't afford to fix everything that's wrong with their home before listing it for sale. It's important to prioritize to make sure that your money is spent on repairs that will have the most positive impact on prospective buyers.

Call a knowledgeable real estate agent in your area for a consultation. Complete a walk-through of your home with the agent, with pen and pad in hand. List all the improvements the agent suggests you complete before selling. Then ask him or her to order the list in terms of most and least important. Then ask how much difference it will make in terms of selling price if you complete none, some or all of the recommended repairs.

THE CLOSING: The amount of time and money you have usually determines how much work gets done.