This is a question many homeowners ask themselves: Should I fix up your house before you sell it with a real estate agent?
There are three primary ways to sell your home:
- As-is
- Fix it up
- Sell direct to a real estate agent, Realtor, or investor.
Each has its pros and cons. But, one of the things that I see happen more often than not is somebody, maybe a son, will reach out and say “My mom is in an assisted living facility,” or, “My mom just can’t live in the house anymore.” The default stance is always to fix it up first. People tend to think, “Well I want to fix it up, so we can sell it and make more money.”
I understand this sentiment, so I give them a copy of my book, “Home to Home, the Step-by-Step Senior Housing Guide” which breaks down how to sell your house, all the different ways to stay in your home, the types of Senior housing that’s available and how to pay for it. It even has a chapter just for the adult children.
I always recommend that anyone in this situation learns about their options before selling the home. It’s easy to say, “I want to fix up the house. I can go up on the weekends. I’m pretty handy,” without understanding the challenges. For example, one of the main problems is that houses can be a money pit and a time pit. I remember towards the end of my Grandma’s life, the last thing I wanted to do was work on her house. I just wanted to spend time with her. It’s important to prioritize and remember that houses take a lot of time if you’re not already a professional contractor. You can call contractors, but you may struggle to differentiate between a good contractor and a bad contractor, A poor choice in contractors can cause a whole slew of problems. That’s why in our book we wrote some scripts that you can use that take you through, step-by-step, what questions you want to make sure you ask a contractor before you work with them. This is critical.
Another factor is money. Fixing up houses can be expensive. It is easy to make mistakes and spend a lot of extra money on unnecessary materials or updates. Taking on a rehab project without the proper knowledge and expertise could wipe out and deplete all of your savings, maybe your parents’ savings too.
How do you avoid that? First of all, you must thoroughly and objectively look at your house and make sure that it’s the type of property and project that you want to get involved in. This will vary person to person. If you’re already a contractor and you feel confident undertaking a rehab, then perhaps that is the best move for you. If you’re just a do-it-yourselfer and you’re committing yourself to working on the weekends, then perhaps leaving it to the professionals is a better option for you.
Another thing is, is that a lot of times people focus on cosmetic updates. Many people fall into the trap of thinking, “Okay, well, everything else in the house is good, I’m going to put in some new flooring, paint, and sell it for a lot more.” What we found is that the biggest risk factors are not the things that you can see. Does your house have a cracked sewer pipe? Is there a foundation problem? What’s going on with the roof? How about the air conditioner or the electrical system? Frequently these are components that you can’t see very well and are the most expensive aspects of fixing up a house. If you do a bunch of cosmetic stuff on the inside, but your house needs foundation work or there’s a plumbing problem, you may reverse the cosmetic updates when taking care of the structural improvements. Rehabbing is just not what they make it look like on the TV shows. There a lot of hidden factors. Make sure that you take a real, honest look at the house.
Make sure that you’re working with a professional that can match up the repairs and rehab that you’re doing to the actual neighborhood. This is a big mistake I see a lot of times: someone will rehab the house based on what their person preferences are but that doesn’t have anything to do with what the buyers want in that neighborhood. If you’re gonna sell it to a retail buyer, you have to know exactly what is selling in that neighborhood, This can vary greatly based on the neighborhood or the price point of the house. Expensive houses have finish-outs that are much different than the lower priced ones. So, if you don’t know how to nail the rehab, then I would not recommend rehabbing your own house. It is too easy to fall into common traps, such as making updates that are too high-end, which is a waste money, or making updates that are too low-end, which the buyers are not going to want. This could lead to the house sitting on the market or simply losing money on the rehab.
When choosing which updates to make, consider which updates will add the most value to the house. For example, if you replace an air conditioner- the ranges are between five thousand and ten thousand- it will not add a lot of value to the home. It might increase the selling price by the same amount that you paid for the air conditioner, maybe a little bit more. It might make somebody want to buy it a little quicker. Maybe you will not have to have a service agreement, when you sell it. Make sure you are investing time and money into projects and updates that will net clear results.
Before deciding to fix up a house on your own, get educated on what the rehab really looks like. Feel free to reach out to us and get a copy of our book, where we got the list of questions to ask the contractors if you decide to bring in the professionals.
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