How to Sell a House that Needs Major Repairs


|10 min read

It’s one thing to sell a house that needs simple upgrades, like a new kitchen or carpets. But how do you sell a house that needs major repairs?

If a property is significantly damaged or has extensive deferred maintenance, renovations are not only preferential but necessary. Your marketing strategy changes, your target buyer needs to be considered, and most importantly, you have to determine the right price.

Assess the Extent of Repairs Needed

If you already know that extensive repairs on your property are needed, it’s best to get a professional involved. Before anything else, quantify what you’re up against. This means getting a detailed inspection.

An expert will flag critical issues like structural integrity, outdated electrical systems, or severe mold. This step is crucial because you might find that the expensive work you think is needed isn’t as expensive as you suspected.

Understanding the repair scope is essential for two reasons – it helps you communicate transparently with potential buyers about the property’s condition and gives you a basis to decide whether repairs are feasible or if selling as-is is the smarter route.

Major Repairs vs. Quick Fixes and Upgrades

Major repairs are significant issues that can affect a home’s safety, functionality, or structural integrity. Roof replacement, foundational fixes, or extensive plumbing overhauls are not optional and often require substantial investment.

Quick fixes and upgrades, however, are less about necessity and more about appeal and value. These include updating an old kitchen, repainting walls, or replacing worn-out carpets. They make the house look better and can increase its marketability.

When major repairs are required, they must be disclosed to potential buyers. Your real estate agent should advise you on the disclosure process in your state. More than likely, they will instruct you to be transparent about damage both in your legally required disclosures and on your listing.

When selling a fixer-upper, it’s in everyone’s best interest to be honest about the extent of the damage. Otherwise, you could find yourself in a lengthy and pointless negotiation or, worse, a legal dispute.

Decide Whether to Repair or Sell As-Is

There’s a difference between selling a property in need of repairs and selling a property that needs repairs but marketing it ‘as-is’.

When selling as-is, the seller is communicating that they are aware of the required renovation investment but are unwilling to offer any financial assistance. The buyer must sign a contract knowing that while they can hire a home inspector for their knowledge, anything uncovered during the home inspection cannot be used to negotiate a lower price or pull out of the deal.

In an as-is sale, the buyer’s expectations are set from the beginning. They know they’re getting a lower price, but with the understanding that the cost and effort of repairs fall on their shoulders. This kind of sale is particularly attractive to investors or contractors looking for a bargain they can renovate and flip or rent out.

Understand Your Home’s Value

Before you decide to sell your home as-is, it’s helpful to understand its value both without and with the necessary repairs completed. To determine the value of your home as-is, you need to consider several factors, including:

  • Location
  • Size
  • Layout
  • Extent of necessary repairs.

Homes in desirable neighborhoods or with unique features may still hold significant value despite needing repairs. However, major issues like structural problems or outdated systems (like plumbing or electrical) can drastically reduce a home’s value.

Compare your home to similar properties in your area in better condition to determine a baseline market value. You can then adjust downward based on the cost and extent of the necessary repairs. Real estate agents and appraisers can provide valuable insights during this evaluation.

Estimating the value of your home after repairs requires a different approach. You need to consider the cost of the repairs and the potential increase in home value they might bring. Not all repairs offer the same return on investment (ROI).

For example, updating a kitchen or bathroom usually offers a higher ROI than ‘invisible’ repairs like a new HVAC system. Get quotes for the necessary repairs to understand the financial investment required. Once you have this figure, you can estimate the post-repair value of your home.

Understanding your home’s value, both pre and post-repair, allows you to perform a cost-benefit analysis. If the cost of repairs is significantly lower than the potential increase in value, investing in repairs might be wise. However, if the cost is high and the increase in value is marginal, selling as-is could be more financially prudent.

For the most accurate assessment, consult with real estate professionals. A local real estate agent can provide insights into current market conditions and buyer preferences, while an appraiser objectively evaluates your property.

FastExpert makes it easy to find real estate professionals specializing in properties needing repair. Start your search today and find the best agent to help you sell your fixer-upper.

When Should You Sell Your House As-Is?

Deciding whether or not to sell as-is depends on the state of the home, your finances, and market conditions. Here are some scenarios when selling as-is might be the best option:

  • When Repairs are Too Costly
    If you cannot afford or don’t want to invest in repairs, selling as-is makes sense. This is often the case with major structural issues, outdated electrical systems, or significant roof damage.
  • In a Seller’s Market
    If the market is hot and homes are selling quickly, buyers are more willing to purchase a house that needs work. You might find that the demand outweighs the negative aspects of selling a house that requires repairs.
  • Urgency to Sell
    If you need to sell quickly due to personal circumstances like relocation, divorce, or financial distress, selling as-is can expedite the process.
  • When You Inherit a Property
    If you inherit a property that is outdated or in disrepair, and you don’t have the interest, time, or finances to deal with renovations, selling as-is allows you to offload the property without additional investment.
  • The House Will Likely be Torn Down
    In some cases, the value of the property is mainly in the land, and the house will likely be demolished by the new owner. In such cases, don’t invest in any repairs.
  • Desire for a Simple Selling Process
    Selling as-is simplifies the process by reducing negotiations regarding the property’s condition.
  • When Potential ROI is Low
    If the potential return on investment (ROI) for repairs is not significant enough to offset the costs and effort, selling as-is might make more financial sense. When you invest in repairs to a home, you want to make sure you’re getting a much higher sale price in return.

Set a Realistic Price

Pricing a home that needs repairs can be challenging. This is when it’s important to lean on your real estate agent’s experience and market knowledge. 

Fair market value is what a willing buyer will pay for your property. You need an agent who understands the distressed home market and is in touch with what homebuyers and investment buyers will tolerate. If you overprice the property, your fixer-upper will sit on the market, and the listing will go stale.

Most buyers considering a home in need of major repairs are deal hunters. Be prepared to lower the sale price based on feedback and market conditions. If your home isn’t attracting interest, it might be priced too high, especially considering its condition. Your agent can provide feedback from showings and open houses to inform you of any necessary adjustments.

Be Transparent: Don’t Scare Off Buyers

Transparency in your listing is non-negotiable in homes that require repairs.

If the repairs are not immediately apparent, your listing must be clear about the property’s condition. Ensure that your listing explicitly states the need for repairs.

This honesty upfront helps attract the right kind of buyer – one who is prepared for and interested in a renovation project. Often, that means a cash buyer or investor who’s prepared to take on a project.

Prepare the House for Sale

Just because you are selling a house that needs considerable repairs or selling as-is doesn’t mean you don’t need to do any prep work before listing. A little effort can go a long way in making the property more appealing to potential buyers.

You need to make sure that an interested buyer can see the property’s potential, even if they are a deal hunter.

Deep Clean and Declutter

Clutter can make spaces feel smaller and more chaotic. A thorough cleaning can transform the look and feel of any property, even a house that needs repairs.

If possible, go beyond dusting and vacuuming; consider steam cleaning carpets, washing windows, and tackling any areas of grime or mold. Clear out unnecessary items, and consider a temporary storage solution if needed.

This helps buyers envision the potential of the space without being distracted by personal belongings.

Minor Repairs that Might Pay Off

If there are too many problems with a property, it can be hard to see beyond the fixer-upper and envision the potential dream home.

Making some minor repairs can help highlight the property’s best features. Consider small repairs such as:

  • A fresh coat of neutral paint.
  • Repairing leaky faucets, replacing burnt-out light bulbs, and ensuring doors and drawers open and close smoothly.
  • Exterior improvements that boost curb appeal, like mowing the lawn, trimming hedges, and maybe adding a few potted plants to the entrance.

When selling a house as-is, your goal is to make sure that the property still presents its best. Aim to create a blank canvas that makes it easy for buyers to see the potential.

Marketing a House that Needs Repairs

The strategy of selling a house that needs work is a little different than a turnkey home. The goal is to attract buyers specifically looking for a project home or an investment opportunity. Often, they end up being cash buyers.

Your agent should tailor your marketing efforts to appeal to these groups. Remember, every home has its selling points. Highlight aspects of the property that are particularly appealing to them, such as a good location, solid structural bones, or the potential for a significant return on investment.

Besides the usual real estate listings, ask your agent about platforms and forums that cater to investors or those looking for renovation projects.

Every state has different laws regarding disclosures in real estate transactions. Generally, sellers must inform potential buyers of any known issues with the property. These disclosures are typically made in writing and presented early in the buying process.

Make sure you and your agent follow your state’s disclosure requirements. Some states have a comprehensive list of what must be disclosed or a standard disclosure form, while others operate on a more general basis.

When filling out disclosure forms, be as specific as possible. If there’s a known issue, describe it in detail. For instance, if there’s a known leak in the roof, specify its location, severity, and any steps to mitigate the issue.

Consider having a pre-inspection done and making the report available to potential buyers. This demonstrates transparency and provides a detailed account of the property’s condition, reducing the likelihood of disputes later.

Full disclosure goes beyond fulfilling legal requirements – it builds confidence in your buyers. When fully informed, buyers can make decisions based on their capabilities and interests. This openness often leads to smoother negotiations and a quicker sale process.

Target the Right Buyer Demographic

A house that needs major work isn’t for every type of buyer. Your ideal buyers are typically those who see beyond the property’s current condition and recognize its potential. These include real estate investors, DIY enthusiasts, and individuals looking for a project home. Additionally, a home that needs repairs often requires a cash buyer, as lenders see properties in disrepair as a risky investment.

Your real estate agent should implement a marketing strategy aimed at the right buyer demographic. It’s important to emphasize the property’s capacity for customization, the opportunity for value increase after renovations, or its appeal as a long-term investment. If possible, provide visual representations like digital renderings or conceptual plans showing the home after renovations.

Negotiate with Buyers

As a property owner, your primary goal is to secure the best possible deal while being realistic about the property’s condition. Negotiating is an art; most buyers considering a fixer-upper are looking for a deal.

During the negotiation process, you need to remember to:

  • Be prepared for lower offers
  • Know your bottom line
  • Be flexible on price or sale terms

During the negotiation process, sellers must listen to their real estate agent’s advice. An experienced agent understands the local housing market and buyer preferences. They also better understand how much all the repairs will cost and how that will impact the sales price. Remember, when selling a house that needs repairs, a cash offer is usually better than one that offers a little more money.

To find the right expert, one experienced in selling properties needing repair, start with FastExpert. FastExperts search platform makes it easy to connect with top-rated local agents who understand the intricacies of selling fixer-uppers.

Alternative Selling Options

Traditional sales routes might not always be the best fit when selling a house that needs repairs.

Sometimes, exploring alternative selling options like selling to investors, seller financing, or cash iBuyers is better.

Seller Financing

Offering seller financing attracts more buyers, especially those who may not qualify for traditional bank loans. It involves you acting as the lender, providing a consistent income stream through monthly payments.

Additionally, spreading the income from the sale over time can offer potential tax advantages.

Target Investors and Developers

Targeting investors or developers is also a great option, especially if the structure is a tear-down, but it usually involves working with an agent with a strong developer network.

Developers are often interested more in the land than its structure and usually purchase properties ‘as-is.’ The result is a simpler sales process and, in high-demand areas, competitive pricing.

Cash iBuyers

Selling to online cash buyers like HomeLight and Opendoor is an increasingly popular choice. These companies provide quick offers and reduce the hassle of selling a home, such as staging and lengthy negotiations.

Their direct and efficient process appeals to sellers looking for a straightforward sale without the complexities of the traditional real estate market. When considering these options, consulting with a real estate professional can offer valuable insights, helping you choose the most suitable path for your property.

Empower Your Property Sale 

Selling a home that needs major repairs is by no means easy. Transparency, understanding your property’s value, and strategically targeting the right buyers are key to a successful sale. An experienced real estate agent will be invaluable, offering guidance, market insights, and negotiation skills to help you get the best price for your property.

Start your journey with FastExpert to find a trusted professional who can guide you toward a successful sale, making the process smoother and more efficient. With the right guidance and strategy, selling your fixer-upper can be a positive and rewarding experience.

Kelsey Heath

Kelsey Heath is a real estate content specialist with an extensive background in residential, industrial, and commercial property. She has been involved in the industry for a decade as a professional and personal investor, gaining a deep understanding of the market and trends. With a passion for written communication, Kelsey loves helping people understand the sometimes-complicated concepts behind real estate and is now a sought-out guest and ghostwriter.

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