You have probably read about home sellers getting sued by their buyers after the house has been sold in the real estate section of the Sacramento Bee or the Orange County Register. You might have even heard stories from a friend or from your own neighbors. The issue usually involves undisclosed problems or damage that was uncovered by a home buyer later and that potentially has a negative impact on the property’s value. Sometimes, repairs were promised before close of escrow and never satisfactorily made. In either case, imagining such a scenario happening to you can put you on edge when it comes time to sell your home. And, this might make you rethink whether you should fix your house or sell it ‘as-is’ since, technically, repairs are not required to sell a house in California. To help take some of that edge off, we will take a look at what you should and should not do, as well as what you can do, once you decide to sell.
The amount of time, money, and stress you can save by avoiding renovations is the most obvious benefit of selling your house ‘as-is’. Even a minor rehab can take several months to finish and cost several thousand dollars. But, before the work even begins, there is the hassle of interviewing contractors and other experts to ensure you hire the best team for the price you can afford. And, unfortunately, getting a good rehab team together is never guaranteed. Sometimes, you don’t find out until it’s too late that you have overpaid for an under-qualified electrician or carpenter. So, selling ‘as-is’, especially if you need to get your house sold quickly, can make good sense all around.
Perhaps the real estate agent came over to see your house and said that you would need to make expensive repairs if you want to sell quickly, but you’re not so sure it’s worth doing. It’s one thing if you only need to do some minor cosmetic work to make buyers happy. But, if your property needs major repairs or an extensive rehab, it may not make sense to undertake the project. You would have to spend days, even weeks, managing contractors or getting dirty yourself to make the work happen—in addition to shelling out for all the costs. A little back-of-envelope calculating convinces you that while the work could make the house sell faster, it may not pay for itself with an increase in sale price. Instead, the practical choice is to skip fixing anything and find out how to sell your house as-is.
Saying goodbye to your home can be an emotional experience, even if you’re moving on to greener pastures. Not only will you have memories to process and people to see as you plan your move, but you’ll also have several tough decisions to make about the sale itself. Choosing a real estate agent to represent you is one, and California’s real estate commission rates may influence that decision. Setting the price for your home is another. But, deciding whether to fix your house or sell it as-is, especially if it’s in need of a lot of work, is one of the tougher choices you’ll have to make. There are several factors to consider and they all have the potential to positively, or negatively, impact whether your house sells. To determine which option is best for you, it’s helpful to take a closer look at each.
Selling a house is a big undertaking, and it can be even more complex when you’re selling a home that needs major repairs. Most homebuyers are looking for a house that is move-in ready. So if your property is going to turn up expensive issues on an inspection—if it needs a new roof, new floors, or HVAC repairs, for example—it can be at a major disadvantage on the market. But there are a few different options when it comes to selling that house. You may want to renovate the house before you sell it. You may list it without making renovations. Or you might sell your house directly to a real estate investment company. Each of these choices requires different actions from you and can lead to different results, so you’ll need to pick the one that best suits your situation.