You’re selling a house that needs repairs but you don’t want to spend too much money or sweat equity if there’s no significant return on your investment (ROI). So before you pay workers or strap on your trusty toolbelt and dive into your next home improvement, you’ll want to carefully choose the right repairs to maximize your profit.
To help you determine how much work to do before selling your house, we’ve gathered expert advice from DeWayne Carpenter, a top-performing real estate agent in Melbourne, Florida, with 26 years of experience; and Jennifer Rosdail, a top agent in San Francisco, California, with 20 years of experience.
Their insights and our research point to three levels of home improvement that can result in a successful sale. These include:
- Select improvements: Some needed repairs, but not everything
- Turnkey: Completely repaired or remodeled from top to bottom, move-in ready
- “As is”: Minimal improvements (if any), which is reflected in the price
Let’s review each route so you can decide what’s right for your needs and goals for this sale.
The biggest advice is just go through with a buyer’s eye and if you don’t have stagers or someone that can help you with that, just try to be hypercritical of your own house and think oh, if I was buying this house this would turn me off or I would notice this.
Level 1: Make select improvements (the sweet spot)
The level one sweet spot is doing repairs that will make your house marketable. Selecting just the right amount of improvements that will attract buyers, without fixing everything in sight, is considered the goal for most home sales.
“The point I want to get a home to, usually, is the point where someone could simply move in,” says Rosdail.
Here is a list of ways you can achieve this balance of repairs and preparations when selling your home.
Clean and declutter
According to Carpenter, one of the best ways to start is by cleaning and decluttering your home so buyers can envision themselves there, and not be distracted by any extra items on display.
“The biggest advice is just go through with a buyer’s eye and if you don’t have stagers or someone that can help you with that, just try to be hypercritical of your own house and think oh, if I was buying this house this would turn me off or I would notice this,” says Carpenter.
If you find that a professional cleaner would make it easier for you to tackle cleaning the entire house, according to HomeAdvisor, hiring a pro typically costs between $200 to $400, depending on how much work is necessary. Hiring a professional stager usually costs an average of $745 to $2,664.
Deep clean or replace old carpet
If you have a carpet that’s in decent shape but needs a deep cleaning, that can make a big difference when selling your house, since flooring is everywhere. But if the carpet really needs to be replaced, choosing consistent flooring for the house typically looks more open and makes a lasting impression. Installing new carpet may also be a solution for your buyers who won’t have to worry about the replacement costs which can average between $786 to $2,799.
“Flooring is your biggest ROI. Buyers do not like seeing a lot of transitions between flooring,” says Carpenter.
Carpenter explains that by changing the flooring throughout the house, the rooms will look bigger, as opposed to renovating a single kitchen space where you might be tempted to renovate multiple items after you start, and that can become a “pandora’s box.”
Paint with neutral colors
Painting using neutral colors, such as whites and creams, is typically the best way to freshen up your house, and give the biggest pool of buyers a chance to visualize a blank slate for their decor. The average cost to paint the interior of your home, according to HomeAdvisor, is between $950 to $2,912, depending on the total square footage of the rooms.
Spruce up your curb appeal
Having nice curb appeal is the best way to make a great first impression and have buyers excited to see the rest of your house. Carpenter recommends that adding fresh mulch, having a mowed lawn and a clean exterior are the best ways to show attractive curb appeal. If you want extra help you could also hire professional landscapers that typically cost between $1,300 to $5,600. Also, according to HomeLight’s Top Agents Insights for New Year 2022, buyers tend to pay 7% more on average for good curb appeal versus properties that are not as well-maintained.
Give kitchens and baths a facelift
A facelift of your kitchen and bathroom may be necessary, to bring those rooms up to date. Often, you can neutralize with paint, and replace sinks or countertops that need an update, but not choose the most expensive options in order to increase your ROI.
“It makes the whole kitchen [or bathroom] perceived as updated,” says Rosdail.
When you’re doing select improvements, you don’t want to go too far as a complete kitchen remodel can cost between $13,473 to $38,252. This is true for the bathrooms as well, which can also be expensive, as an entire renovation typically costs between $6,608 to $16,612.
Stage, stage, stage
Carpenter said sometimes he hires professional stagers to come into the house to help the homeowner improve the flow and look of the rooms.
“If [sellers] have a couch that is in a position that makes the room look closed off and small, [stagers] will move it. If they have throw pillows or something like that, then stagers might reappropriate those, or if they have excessive knickknacks, stagers will probably edit those,” says Carpenter.
Carpenter suggests that visiting a model home usually gives the homeowner an idea of what they should strive to achieve, which is creating a homey feel, but not excessive personalization.
Know what NOT to fix when selling your home
When deciding what repairs will make your home marketable, it’s important to also eliminate other repairs that aren’t necessary for your bottom line. When making your final choices, you’ll have to decide what is the most cost-efficient to fix. The repairs that typically WON’T fatten your wallet include:
- Cosmetic flaws: Minor scratches on hardwood floors
- Minor electrical issues: A light switch that goes to nothing
- Driveway or walkway cracks: Hairline cracks that are due to the house settling
- Grandfathered-in building code issues: Originally built to code, but the code has since changed
- Partial room upgrades: A new cabinet was added but nothing else was done in that room
- Older but working appliances: If not working, replace them with good used appliances
Before you fix anything
Of course, before you repair or replace anything, it’s highly recommended to seek out the professional opinion of someone who has the expertise to guide you. Working with an experienced agent who has the knowledge of which repairs will give you the highest ROI can save you time, money, and energy. HomeLight’s free Agent Match platform can connect you with a high-performing agent who knows what buyers expect in your local market so you can find that sweet spot for home improvements.
Level 2: Go for turnkey
What does ‘turnkey’ mean in real estate
When a property is turnkey, that means it’s a home waiting for the new owner to turn the key and start living in the house where everything is already done. No major repairs or improvements are needed, everything works, and looks top-notch. If a property is turnkey it usually costs more for getting it into this condition, and those costs are typically passed onto the buyer who is looking for a home that only requires unpacking.
Buyers who look for a turnkey property are typically those who:
- Want or need to move in quickly
- Don’t like to do home improvement projects
- Don’t have extra room in their budget for repairs
- Investors seeking ready-to-rent investment properties
Why would a seller choose the turnkey prep option?
- To sell their home at a higher price, depending on the market
- To attract more buyers by marketing the property as move-in ready
- To help a home sell fast, especially in a buyer’s market
- There’s time to do the renovations and it makes financial sense
This option isn’t for all home sellers, because it will depend on how many renovations are needed and the costs necessary to bring their house to this level. According to Homeadvisor the typical cost to do an entire house renovation is between $17,916 to $77,203. In addition, the demand in the local housing market for turnkey buyers will determine the final price. If buyers don’t want to pay a premium, all the renovation costs might not be recouped.
Also, according to Carpenter, if the owner chooses specific colors like a bold blue countertop where everything is new but not on trend, that can be wasted money, since it won’t have a broad market appeal, and buyers will end up changing it anyway.
Level 3: Sell ‘as is’
The opposite of a turnkey is when you are selling “as is,” doing minimal or no repairs before putting your home on the market. In this situation, if repairs are needed but the home seller isn’t in a position to complete them, usually selling “as is” will warrant a large price reduction.
Reasons a homeowner might choose the ‘as is’ option:
- You need to sell immediately due to finances: You don’t have the luxury to repair or wait to sell your home and need as much cash as possible immediately. Perhaps you need to pay high bills related to medical issues or job loss, or settle a property dispute during a divorce.
- It’s a property you acquired but don’t live in: You may have inherited the property and don’t live in the area, or it’s a second home you don’t plan to use. Also, renting it out and becoming a landlord doesn’t appeal to you.
- The house needs too much work done: When you bought the house as a fixer-upper you always meant to repair everything, but it became too costly to do it. Or perhaps the property has experienced a lot of wear and tear over the years and repairs just feel overwhelming.
- You have to relocate to another state: Getting a promotion or moving to care for a relative has suddenly come up, leaving no time for home improvements. Selling the house quickly and using that money to relocate is your best option.
Rosdail explains that in the case money is an issue, rather than sell “as is,” she’ll often offer concierge funds that help pay for necessary repairs to sell the house for the most money possible, and those costs will come out at the close.
Know the risks of selling your home ‘as is’
Many buyers who see homes advertised “as is” typically think the house needs lots of work. Regardless of the reason you choose to sell in “as is” condition, this decision will give buyers the opportunity to negotiate a lower price after the home is inspected.
In a survey of nearly 1,000 homebuyers, respondents reported saving about $14,000 by negotiating with the seller for a lower price based on issues revealed in a home inspection. How much less you might receive selling “as is” will depend on the condition of your home and your local housing market.
Also, selling your home on the market in “as is” condition to a typical buyer doesn’t guarantee nothing will need to be repaired. This is especially true if the house is considered unsafe or not livable, which are basic requirements when buyers are financing the purchase.
Options to consider if you’re selling your home ‘as is’
Beyond conventional buyers who most likely plan to live in the home, there are a number of alternatives for selling your home “as is.” Depending on your situation, you might consider a house-buying company that can provide a near-instant all-cash quote to buy your home. Some of these options include:
- iBuyers: These large real estate companies typically look for homes in better condition than homes purchased by investors and flippers. iBuyers are likely to offer more for your home than an investor or flipper.
- Fix-and-flip investors: These “we buy houses” companies purchase homes, make repairs and improvements, and then sell them for a profit. Flippers are often a good option for as-is sellers with houses that need a lot of repairs.
- Buy-and-hold investors: These investors typically purchase market-ready homes at a competitive price and then convert them into rental properties. A buy-and-hold investor may not be as interested in as-is homes that need a lot of work unless the property is in a high-demand location.
The cash buyers you typically want to avoid are those with homemade signs on street corners whose offer could possibly be extremely low or not be coming from a reputable business.
Most serious and established investors look at your home strictly as an investment opportunity. Since they don’t have to worry about financing requirements, they usually have the ability to give you a cash offer that can close quickly. It’s important to research a company thoroughly before signing a cash offer agreement.
Get a reasonable offer and close fast
If you’re looking for another alternative to sell your house fast, HomeLight offers a Simple Sale option that simplifies the process of an all-cash offer. Simple Sale has a network of cash buyers on its platform, and partner investors have a wide range of investment strategies, including fix-and-flip and buy-and-hold. This enables Simple Sale to provide competitive cash offers for homes in almost any condition throughout the U.S.
With Simple Sale, you answer a set of questions about your property and receive a no-obligation, all-cash offer in as few as 48 hours and sell your property in as little as 10 days.
Do your homework before you invest in repairs
After you do your research and consider your options, the level of repair you do will determine how much profit you’ll make when you sell. Before you start planning your next move, consider these takeaways:
- Look at your house as if you were a buyer: Decide what level of repair you need to do in order to achieve the highest ROI possible
- Think neutral tones and decor: Buyers should notice your house, not multiple bright paint colors or different flooring that doesn’t match
- Don’t forget the cleaning and staging: Editing a room by taking out things that can distract the buyer is a great way to free up space and spend your sweat equity
Not sure what preparation level to choose for your home? If you’re looking for a professional opinion from a top agent in your area, HomeLight’s Agent Match can connect with a proven professional who knows how to hammer out the details for you.
Header Image Source: (Francesca Tosolini / Unsplash)