In many areas, homes that have been recently updated or renovated are flying off the market, often at a profit for the sellers. But what about a fixer-upper that the seller wants to list “as-is”? There are pros and cons to this approach. Sellers save the money they would spend on major repairs or upgrades, and the home could sell fast, since “as-is” properties typically attract flippers, developers, and investors looking for properties they can market as single-family rentals. However, sellers might see less value in listing as a fixer-upper: ultimately “as-is” means selling “below market price” at a lower profit.
It’s important to understand why sellers want to list “as-is,” and learn whether there’s any budget available for minor repairs. Small upgrades and fixes can boost the home’s value without having to put substantial time and money into renovations that may not yield a return. Minor upgrades that can increase the value could be as simple as include fresh interior paint, new flooring, or freshened up landscaping.
In addition, sellers should make small repairs where possible, such as:
- Patching holes in drywall
- Fixing leaky faucets
- Repairing torn screens
- Replacing worn out caulk
- Updating older light fixtures
- Decluttering the entire home
No matter what the condition of the home, ensure sellers give it a top-to-bottom deep cleaning by professionals. This is often dismissed—if the property is going to be remodeled, why bother? But one study showed homes that underwent a deep cleaning before listing saw a marked increase in resale value.
If the sellers avoid addressing issues that go beyond the cosmetic, encourage them to do a home inspection before you list. Being up front and letting buyers know what the home’s potential flaws are can avoid deal-breaking surprises down the line. Reassure sellers that disclosing known defects upfront does not obligate them to make repairs if it is clear from the start that such repairs are non-negotiable.
In the marketing, focus on the home’s positives. This could be its location in a highly-desired neighborhood or great school district; its proximity to transportation or walkability to amenities; or simply its desirable features, such as mature landscaping or original hardwood floors.
About one in three millennials say they’d prefer a fixer-upper, and almost half are willing to do the upgrades themselves. People who want to live in an area whose average home prices are beyond their reach may be looking for “the worst house on the best block.” There is, of course, a segment of the market that wants a turnkey property. But there’s another part that’s looking for a lower cost of entry to a home whose value they can increase over time.
If you are looking at a fixer-upper, give me a call, 505-6396-2090, I would love to help you.
