That depends. But we’re sharing 10 criteria that can help you weigh the pros and cons.
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The personal stories of one Realtor’s battles and triumphs in the highly-competitive Bay Area Real Estate Market, seeking to illuminate and humanize the very real ups-and-downs of homeownership.
“I inherited a property and it’s in pretty poor condition,” the email said. “Can you come by later this week, and tell me whether I should fix it, or sell the home “As Is?”
I’d be happy to, but the choice to fix a house OR sell it in its current “As Is” condition is predicated upon the structure’s underlying health. Although I’m certainly not opposed to giving my opinion (829 blogs posts worth of them!), if the deferred maintenance is such that the pest report is going to identify hundreds of thousands in dry rot, it doesn’t make a whole lot of sense (or cents) to spend your hard-earned dollars on cosmetic improvements WHEN the house will still present poorly. Put more succinctly, we are going to need more information to answer the question.
So where do we find the answers? Inspections are always the first line of defense.
And while Sellers absolutely HATE having their homes picked apart, when it comes to “As Is” sales, the more we know, discover, and disclose, the better off you’ll be. Which is why Sarah and I often begin with pest and home inspections. Together, these reports examine the working components as a whole. They tell us not only if there are termites, rats, dry rot, or a beetle infestation in the structure, but will also recommend further inspections as needed (roof, foundation, chimney, HVAC, electrical, plumbing, etc., etc., etc.).
In short, when it comes to the “As Is” sale, we’re going to THOROUGHLY inspect, disclose, and clean before putting the house on the open market, but we will NOT be painting, repairing or staging the home, as is now the norm. It’s a quick and no-frills approach to the “fixer-upper,” and one that we’ve had great success with — when appropriate.
It’s important to note that “As Is” sales, are NOT about fixing everything that needs attention, but should include educating potential Buyers. The last thing we want is some novice purchasing the house who has no idea of the scope or breadth of the repairs; someone who immediately falls into Buyers’ remorse, and lawyers up after the first heavy rain of the season. When it comes to “fixers,” you want the relevant information available to any and everyone, and then the Buyers can decide whether or not the project (and the risk) makes sense for them . . . .
However, when the decision to “fix” a house prior to bringing it to market is the path that has been agreed upon, the vast majority of repairs are going to be cosmetic in nature. As Agents (not contractors), we’re usually addressing the most egregious items on the “to-do” list, before dressing up the house to make sure it’s appealing online. As 97% of Buyers begin their search on the Internet, compelling photographs are EVERYTHING, and the reason we pay Stagers to work their magic. (They’re worth every dime.)
But in case, you’re still confused, here’s the real deal: Agents are NOT typically replacing the knob & tube wiring, cast-iron pipes, or failing foundations. We are NOT installing French drains, We are NOT putting on a new roof (unless the roof is leaking like a sieve). We are NOT replacing the single-pane windows, AND we are — in no uncertain terms — NOT presenting a perfect product. In nearly every case, we are investing heavily in the emotional appeal of a house, because the purchase of a home is a highly passionate and visceral decision. (No one is pining over HVAC systems or copper pipes) In the end, it’s all about what Buyers can see, what they respond to, and how the property makes them FEEL.
That being said, there are plenty of Buyers who prefer “fixers” (I’m one of them). And to be completely frank, an untouched house is the most honest representation of a home, as you are seeing it in its rawest form. When we paint, stage and improve a property, you’re experiencing an aspirational representation of the home. (There’s always a bit of smoke and mirrors involved.) And has been proven time and time again, such transformations almost always result in a much higher selling price!
That’s because the vast majority of Buyers don’t have the time, money, imagination, or patience to do the work themselves, preferring to pay more for a “turn-key” property, while simultaneously avoiding the headaches of construction. Moreover many Buyers tend to either underestimate or overestimate how much it will actually cost to cure a distressed property, and that’s a scary proposition for the uninitiated. (Please do not use HGTV as a reference guide; those projects are benefitting from all kinds of “freebies’ that the average Homeowner will be paying when they renovate.) Again, most prospective Buyers will pay more for what’s perceived as “done.”
But what if you’re not selling? What if you just want to know whether you should renovate and stay put, or abandon the home and find another property altogether?
That’s a distinctly different question, and at the risk of being a bit cheeky, here are my criteria (yours may be different).
- Do you like/love the location of your current home?
- Does your house have negative inherent issues that cannot be resolved even with significant renovations? (ie: busy street, stairs to the front door, small lot, etc.)
- Is the yard/lot difficult to replace?
- Are you good at making decisions quickly, or do you struggle with choices?
- Are you and your mate on the same page? (Seriously, how’s your marriage?)
- Do you have the wherewithal to renovate or will you be taking out a line of credit?
- Will you be living through the construction or is there somewhere else you can comfortably stay during the remodel?
- What is your current interest rate, and are you willing to trade it for a higher one?
- Does the thought of construction excite your or make you highly anxious (or sick to your stomach)?
- Can you live with unwelcome surprises and the unknown? (Construction is full of both.)
In the end, you should do what makes the most sense with respect to your goals and desire as rehabbing a property can be a long, drawn out, inconvenient, and expensive proposition that nearly always goes over budget and over time. If you want or need to sell quickly, aren’t willing to invest in the property, or would like to pass decades of deferred maintenance on to the next owner to deal with, an “As Is” sale can absolutely be the right choice for you. (Either way, we’re here to guide and support your journey.)
Did that answer your question? (I hope so.)
How can we help you?
Julie Gardner & Sarah Abel | Compass Realty
Not just Realtors, but consultants in all things house and home, we’re here to educate, explore, examine and refer . . . In short, you may count on us to take care of your home as if it were our own and anyone who knows us, knows we take pretty darn good care of our homes.
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