You’ve probably seen homes with these kinds of problems before – outdated heating and cooling systems, dangerous wiring or plumbing, leaky roofs, foundation cracks, or asbestos and lead issues. Selling a house is expensive and could take a long time, which can make the entire process seem almost impossible. In today’s traditional housing market, most buyers aren’t willing to spend the extra money, time, and frustration on a house that requires a lengthy list of repairs in order to make it livable.
Additionally, buyers’ agents will undercut the seller’s asking price if they discover any of these problems. This is especially true in The Bay Area near Oakland. Standards for homebuyers are far above the national average, as the real estate market is especially competitive.
In order to get the best value for a home in poor condition, you should work with an accredited experienced as is buyer, such as Brothers Buy Homes. However, there are some important points to consider if you are contemplating selling your home on the traditional market.
Selling a Home in Undesirable Condition
Before you sell your Bay Area home, if it has problems that extend beyond simple cosmetic repairs and cleaning, you should get a couple of quotes from some contractors. This will help you come up with a cost-benefit analysis to determine whether you should pursue the repairs or sell it as is. Make sure that the contractors inspect your property entirely. You should also work with a variety of different sized companies.
It is important to note that selling a home that requires work to make it livable, or brings it up to code, requires lots of money and time and can be frustrating. You will also be required to undergo additional inspections and obtain supplementary local permits. While renovation loans may cover many of these costs, they can negatively impact the home’s overall final bottom-line value you will receive.
In order to ensure that your property is being compared to others that are in similar shape to yours, you should research your local real estate market. Your home’s value should not be assessed based on other properties that are in better condition. This will give you a misleading and skewed understanding of the real value of your home. If comparable homes in your location don’t require extra work, you will have a more difficult time trying to sell your home for an acceptable price.
As a seller, you need to take your own objectives into account. Are you trying to get the most money out of your home as possible? Do you want to get rid of the property quickly? Buyers will have their own preferences, and a fixer-upper may not be very appealing to them. You will need to familiarize yourself with the problems your home currently has, as well as any repairs that will need to be made, so you will be able to better predict any objections a buyer might have.
Inherent Problems with Fixer-Upper Homes
Selling a home is difficult enough, but when you’re trying to sell a property that is in poor condition, the number of challenges and problems you will face increases exponentially. You will encounter several problems along the way while you’re trying to sell a house that’s in disrepair:
- Depreciation: One of the most difficult problems with selling a home in poor condition is that you will not be in a suitable bargaining position with buyers and their realtors. You will not get as many bids for a home that is of low quality. If you get an offer at all, you may receive only one, which means when it comes to deciding on a fair price, your hands will likely be tied.
- Realtor Hesitancy: It’s a well known fact that realtors earn their income based on the commissions they make from the properties they are representing. Realtors would prefer to sell houses that are in good condition or that can generate a price that rewards them for the time they spent marketing it. If you are selling a home that needs a lot of work, real estate agencies may be hesitant to take it on, or only devote a minimum amount of time to help you sell it.
- Delays: If you have had contractors perform any work on your home, you probably already know that a project usually takes a lot longer and costs twice as much as you thought it would. The additional cost is tough enough to swallow, but the extra time it takes to get projects done before you can list the property can pose a serious risk. In The Bay Area, the real estate market moves relatively quickly, which means that buyers won’t wait for you to finish any work that hasn’t been completed yet.
The more time you spend fixing up a home that is in poor condition, the more money you will end up losing in the long run. If you decide to sell the home as is instead of having the necessary work done, you will experience a lot of delays. On average, selling a home in as is condition can take up to six months or a year to sell, compared with homes that are in overall good condition.
Determining Factors of Homes in Poor Condition
Some repairs can be done relatively quickly and cheaply to help your home sell. The repairs can be done by the homeowners on their own, or by replacing broken windows, cleaning, changing carpets, repainting, etc. But there are other problems that extend beyond do it yourself projects, and will require insured, licensed professionals.
There are some clear indications that a house is suffering from severe problems, such as:
- Roof Repair/Replacement: Old, damaged roofs, including flashing and underlayment, can cause water damage which can eventually lead to structural damage down the road.
- Electrical Wiring: Bad or old wires are both a fire and a safety hazard.
- Obvious Structural Damage: Earthquakes, fire, flooding, or other severe events can produce visible holes, cracks, or other types of damage to roofs, foundations, floors, or load bearing walls.
- Plumbing: Older homes containing pipes that were made from toxic materials such as lead must be removed immediately. Older pipes are also in danger of bursting and causing water damage and mold growth.
- Foundational Damage: If a foundation is in need of repairs, the home may need to be pieced and jacked, which can be costly.
Evaluating a Property’s Condition
A simple visual inspection will often be able to tell you if your home needs major repairs, but there are some problems that may not be immediately visible to the naked eye, including problems that can be potentially costly and dangerous. You should request the services of two or three licensed, experienced inspection experts and make arrangements for them to tour your home at different times and days. Make sure they inspect your crawl space or basement, the roof and the attic, chimneys, or other structures that may be part of your property, even if they are not part of the actual house.
These inspection reports can be used to get competitive quotes from contractors for an estimated cost of the work that needs to be completed on a distressed property. In order for you to be in a good position to draw up a cost/benefit analysis, you will need to get as clear a picture as possible.
If you decide to sell your home in as is condition after going through the entire inspection procedure and obtaining quotes from contractors, you should use the inspection reports to prepare for any complaints a buyer may have about your property. The contractors’ quotes should be used to give you a general idea of how much these complaints may cost you.
At the end of the day, selling a property in poor condition is slow, risky, and expensive. If you still want to get a better price for your home, there is hope! Brothers Buy Homes offers sellers a hassle free, quick offer for their homes without costly, prolonged discussions regarding repairs. Plus, in the Bay Area (Alameda, Contra Costa, Solano and Napa counties) you can close quickly. Our process is simple. All you need to do is fill out an online form on the Brothers Buy Homes website for an entirely free, no-obligation quote. Within 24 hours of submitting your request, you will hear back from one of our representatives regarding the next steps you will need to take to get an estimate and an offer from us.