Author Topic: fix up house or sell "as is"?  (Read 5105 times)

wotan

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fix up house or sell "as is"?
« on: May 13, 2015, 02:35:01 PM »
house needs aproximately $20,000 in repairs. new roof, new driveway, and new heating and aircondioning. should i sell as is or do the repair work. house is in upscale NJ town. neighborhood prices range from $400-450,000. have the money to fix house, house is free and clear.
selling question. i'm going to have 2 open houses trying to sell it myself for 30 days before listing it with a realtor (sold my last 2 houses myself).
is it better to sell at $400k and give discount for $20k work needed at closing, or just sell for $380k "as is"?
thanks

Jack

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Re: fix up house or sell "as is"?
« Reply #1 on: May 13, 2015, 02:54:44 PM »
is it better to sell at $400k and give discount for $20k work needed at closing, or just sell for $380k "as is"?

That's not the issue. The issues are that:
  • A "fixer-upper" that needs $20K of work is not necessarily going to sell for $20K less than it would if the work were done, except by coincidence. The difference might be more than $20k (in which case, you should do the repairs) or less than $20k (in which case you should not do the repairs), depending on your particular market and circumstances.
  • A "fixer-upper" and a "move-in-ready" house have almost completely disjoint sets of potential buyers. The number of buyers will be different, the kind of marketing needed to attract them will be different, etc.
  • The house might take longer to sell if it isn't "move-in ready."

clarkfan1979

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Re: fix up house or sell "as is"?
« Reply #2 on: May 13, 2015, 06:22:11 PM »
You could try to sell "as is" first for 380K and see what happens. If it doesn't sell, then you might need to do some repairs. However, if you spend 20K in repairs and it turns out to not be worth it, you can't go backwards and get your 20K back.

Most people do not want to do repairs. Doing the repairs first will give you a larger buyer pool. I would like to fix it up nice and have multiple people fall in love with the house. Capitalize on humans using their emotions and behaving irrationally. Someone who can envision repairs is most likely a practical person and will not overpay for the house. 


theoverlook

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Re: fix up house or sell "as is"?
« Reply #3 on: May 14, 2015, 08:24:31 AM »
If the roof is very bad, the buyers won't be able to get a conventional loan on the house.  Same with the heat - if it doesn't work, no conventional loan.  That limits the pool of buyers that will be able to purchase it a lot.  If they are serviceable but old that is a different story.

The a/c doesn't matter from a loan standpoint, other than affecting the appraised value.

ShoulderThingThatGoesUp

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Re: fix up house or sell "as is"?
« Reply #4 on: May 14, 2015, 08:33:09 AM »
How badly does it need these things?

If the heat doesn't work, then you should fix it. If the roof leaks, then you should fix it. But if these things are merely old, I don't think the conventional wisdom is that you'll get your money back. I definitely doubt you'd get your money back from repaving the driveway.

Also, $20,000 sounds really low to do all of that, especially in New Jersey.

James

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Re: fix up house or sell "as is"?
« Reply #5 on: May 14, 2015, 09:13:16 AM »
Definitely avoid the heating and A/C unless those things don't work. If they "function", then it won't be seen as an issue by most buyer. They will know based on the inspection that it will be something they need to address at some point, but they won't discount it by the total cost of a new system.

The roof becomes more about aesthetics. If it is obvious at first glance that it needs a new roof then I would have it done. A fresh roof can really make buyers feel comfortable about spending more for a house, and a really bad roof can make buyers really scared. It's an emotional aspect instead of financial, and emotions play a big part in how much a lot of buyers will spend. So post a photo or consider the impact of looks, but it it functions well and looks fine, don't replace it just because it will need it "soon".

Driveways are so expensive you really have to consider the value of "first impressions" just like the roof. If it will turn away most buyers and lower the asking price then yes, have it done. But if it just needs to be done at some point but is functioning fine, then pressure wash to clean it up and empty the cracks, and fill all areas with high quality self-leveling sealant. Even if you must pay to have it done, that is a lot cheaper than a new driveway and buys a few more years for most driveways.

acroy

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Re: fix up house or sell "as is"?
« Reply #6 on: May 14, 2015, 09:30:55 AM »
It's an investment of 5% of listing price -
I'd say go for it, advertise as 'NEW roof, ac, etc etc" and ask $475 :)

James

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Re: fix up house or sell "as is"?
« Reply #7 on: May 14, 2015, 11:33:52 AM »
It's an investment of 5% of listing price -
I'd say go for it, advertise as 'NEW roof, ac, etc etc" and ask $475 :)


I have no problem with this idea in theory, as long as you also acknowledge that it could sit a year at that higher number, and eventually sell for $380 anyway despite the upgrades. We are all offering out best advice and I think it's a good roundup of options and suggestions, but at the end of the day nobody knows more than you about your house and what might work for your neighborhood. Find some top knotch realtors in your area and pick their brains. They don't mind since it might get a commission for them eventually, and you will have that much for information to consider. Just know they will probably suggest doing the upgrades, since it makes their job a lot easier. If they say it's not a big deal, that is probably a good indication not to do it.

Numbers Man

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Re: fix up house or sell "as is"?
« Reply #8 on: May 14, 2015, 12:04:53 PM »
house needs aproximately $20,000 in repairs. new roof, new driveway, and new heating and aircondioning. should i sell as is or do the repair work. house is in upscale NJ town. neighborhood prices range from $400-450,000. have the money to fix house, house is free and clear.
selling question. i'm going to have 2 open houses trying to sell it myself for 30 days before listing it with a realtor (sold my last 2 houses myself).
is it better to sell at $400k and give discount for $20k work needed at closing, or just sell for $380k "as is"?
thanks
This definitely needs several face punches. Get your house in top condition to get top dollar in order to sell your house ASAP. Otherwise, a lot of people will run away and never look back coupled with the low ball offers. The choice is yours. Choose wisely.

https://www.youtube.com/watch?v=puo1Enh9h5k   (skip to 1:45)

wotan

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Re: fix up house or sell "as is"?
« Reply #9 on: May 15, 2015, 06:27:40 AM »
thanks for all the replies. the selling "as is" was for a couple of buyers i had lined up from the next door neighbor because they wanted to see the house fast.
the roof and driveway definitely need to be replaced. the heating and air conditioning work fine but the outside central air unit is all rusted. everything is original, 30 years old.
will show the house next week to the 2 buyers and if they are not interested go ahead and fix the roof and driveway, try a couple of open house myself, then list with a realtor.

any links to sites on showing your house online?
thanks

wotan

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Re: fix up house or sell "as is"?
« Reply #10 on: May 15, 2015, 06:35:15 AM »
actual costs are
roof - $8300 for Timberline HD with new skylight. every house in the neighborhood has this roof
driveway - $3100 for complete new asphalt driveway
heat and air - $5900
all bids from highly rated companies that family members have used

Sofa King

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Re: fix up house or sell "as is"?
« Reply #11 on: May 15, 2015, 08:50:42 PM »
outside central air unit is all rusted.

Get some cans of spray paint and it will look alot better!!!