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John Harris, Real Estate Pro in Branchburg, NJ

Would you tell a seller to fix a home up for sale or sell it "as is" in todays market?

Asked by John Harris, Branchburg, NJ Tue Aug 10, 2010

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Depends on the cost of fix up and how much they can expect to recover, but generaly I would say, fix it up. We are in a buyer's market and I am finding buyers to be very demanding. They want what they want and they want it now. They want granite counter tops. They want ceramic tile. They want hardwood floors. And if they have these things installed themselves they are going to ask for a huge discount to cover not just the cost but their time and trouble as well. I am finding homes that need even cosmetic work or TLC to be difficult to move in tis market and true fixer upers nearly impossible!
1 vote Thank Flag Link Tue Aug 10, 2010
Hi John, I think it really depends on what the seller's situation is. If the seller's priority is to get top dollar and move the property quickly, perhaps a quick "fix it" is in order. However, if the seller's looking to just get rid of it and not invest any more time or money --perhaps in an investment situation-- it may be better to price low and get it sold. Best, Caroline

Caroline Choi
Broker Associate/Realtor
http://www.CarolineSellsTheCity.com
0 votes Thank Flag Link Mon Sep 20, 2010
Thank you all for your insights, as it turns out, the tenant has moved out and has left the seller no option but to fix up and clean up. I will not go into details but the seller is very sorry she rented to friends instead of selling the property last year. Live and learn, sometimes we really do advise our clients properly, now how do we get them to listen to our experience and avoid having to learn things the hard way
0 votes Thank Flag Link Mon Sep 20, 2010
Sometimes the cost of the fix-up will not result in a dollar for dollar gain, but it can make the difference of selling or not. Investing 10K to get back 7K is a 3K loss, but the alternative may require a 10K price reduction in order to sell. If the seller can afford it, it can be a better position.
0 votes Thank Flag Link Sat Aug 14, 2010
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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I think the question is the same in any market - will the fixin's pay off at the closing table?

To most buyer's minds, there are only two kinds of houses - move-in ready, and fixers. If stuff needs to be done, it's a fixer.

Buyers, generally speaking, won't buy what they can't see; "fixer" buyers are expecting a bigger discount for the honor of taking on the chores themselves.

If you can make the house move-in ready simply by cleaning, painting, and making repairs, then you absolutely should do it. If you need to do remodeling, you probably shouldn't, unless you yourself are a professional.
0 votes Thank Flag Link Sat Aug 14, 2010
Hi all, to build on the last posters response, the assurances of recouping the fix up costs is precisely what I think we need to be cautious about. In today's market you may not recoup the fix up costs - I think it is very important to present this very real possisiblity to the seller.

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Sat Aug 14, 2010
The short answer is it depends.

It depends on whether the seller would be able to recoup those fix-up costs.
0 votes Thank Flag Link Fri Aug 13, 2010
Great question and one I think about often - at a minimum I tell sellers to spend their money very, very carefully. But I do agree for sure with the suggestion of neutralizing with paint.

Managing seller expectations is so important - fixing so that things function is important, but improving may cause the seller's pricing expectations to exceed what is realistic.

If the seller is expecting a return on the investment, slow them down. If the seller understands that money spent will improve the likelihood and time to sell, then you're on the right track.
0 votes Thank Flag Link Fri Aug 13, 2010
If they can fix it up with a small budget, yep I would. if not it will be sold as is for much less. It just depends on the situation is and what the seller can and/or is willing to do.
0 votes Thank Flag Link Thu Aug 12, 2010
The highest return on investment for a seller is new interior paint job in white or an off-white neutral color. I always recommend this unless the current paint job is very new. As for the rest it depends on the house and what needs to be fixed.
0 votes Thank Flag Link Thu Aug 12, 2010
Depends on the house, the market, the sellers' financial situation. And, what is involved in the "as is." Too many variables in this question.
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Thu Aug 12, 2010
Any home will sell at the "right" price - no matter what the condition is.

The answer to this questions goes to the selle'rs financial situation and time frame. Some may have the money, but not the inclination or time to undertake repairs - minor or major.
Some may just not have the means to pay for any upgrades or repairs..............some may have a lot of equity - some not much, if any.
In the case, for example, of an estate sale, the heirs may just want to take when they can get, and be done with it...........priced accordingly, the home will sell.

So........I guess my asnwer to the questuon is.............It depends.......... :)
0 votes Thank Flag Link Tue Aug 10, 2010
John,
Each property is unique. I'm going to assume you mean fix-up that goes beyond minor repairs.

When discussing doing fix-up versus selling 'As-Is" with a Seller, I might suggest either, neither, or both, depending on the property. Let me share some observations, based on what I've seen.

It's not a given that all work that's done on a house makes it better. Often, I'll go into a home where the Seller has made updates, but the materials or workmanship are substandard. The work may have been done by the homeowner, rather than a professional, and it shows that way. It's sad to see these kinds of things, because, essentially, the Seller has thrown his/her money away. I know that a Buyer will be running the adding machine in his/her head the whole time he/she's looking at the house, totalling what it's going to cost to undo the Seller's "improvements."

Even the opposite (doing attractive remodeling) can sometimes work against a Seller. I've seen homes where a Seller has done a gorgeous kitchen remodeling, but no other improvements. The new kitchen whets the Buyers' appetite for more. When the Buyers look at the rest of the house (outmoded baths, faded carpeting), they're disappointed because the most of the house is still in its original state.

Taste is such an individual thing. Even a stylish professional remodeling, using quality materials, probably won't appeal to all Buyers. So spending money this way is not a guarantee of success for Sellers.

What almost any Seller can do, with minimal expense, is to make the home clean, fresh-smelling, decluttered and depersonalized.

Also, unless a Seller is competing with a below-market price, it pays to give some attention to the curb appeal. Powerwashing, painting, yard clean-up, and landscaping can go a long way toward making the home look good from the street. Without curb appeal, most Buyers looking for a home won't want to go inside, and, if you can't show it, you can't sell it.

If a Seller can't or won't do even a cursory cleaning and freshening, and has no intention of doing repairs, then listing "As-Is" for a rock-bottom price may be the only way left to compete.

We do our best to explain the alternatives to our customers, but, in the end, the final decision is theirs.

Warm regards,
Maggie Hawk, REALTOR
(386) 314-1149
Watson Realty Corp.
0 votes Thank Flag Link Tue Aug 10, 2010
It would depend on how much equity they have and the sellers min requirement for what they need to net for the sale. A free and clear fixer upper can be a great listing if the seller is motivated because it can be priced right and move fast. I have found there to be good demand in the right neighborhood for this kind of product. If the seller doesn't fit that example, I look at two factors: neighborhood and how clean the home is. If the home is well maintained and just out of date, sometimes a good carpet and paint job coupled with a counter top replacement in the kitchen can work real wonders. If the place is a true disaster, it may not help much to do anything. To quote an agent in my office, "It can be like putting lipstick on a pig." Hope that helps.
0 votes Thank Flag Link Tue Aug 10, 2010
I agree with others, what type of fixes are needed. I also think it depends on the price point and what that price point's buyer pool is. Is this a property that will need an appraisal for a lender?
0 votes Thank Flag Link Tue Aug 10, 2010
If someone has the time, money, and aptitude to improve their property before selling, I would advise them to do so. In my experience and in the current market, homes in the best shape with regards to structural and cosmetic issues are selling BY FAR the soonest and for the best prices.
0 votes Thank Flag Link Tue Aug 10, 2010
If you mean by "fix" those items that are visably apparent to you and would certain to be addressed by a licensed home inspector engaged by a buyer who is buying "as is with right to inspect." then my answer is yes. Although I am not a home inspector I do see things that are broken, not working, etc. when I am listing a property "as is" and I suggest to the homeowner that these deficiencies be corrected. Very often the price given by a home inspector to correct these deficiencies is much higher than the actual cost will be thus giving a potential buyer pause as to whether or not to go through with their purchase.

If you meant fix vis-a-vis updating and such then my answer is it depends on many variables -- some of which were previously addressed and answered by my colleagues before me.
0 votes Thank Flag Link Tue Aug 10, 2010
In todays market, minor fix ups, especially things we as Realtors know will need to be done (or credit asked for) after inspection are my first priorities. This includes securing loose bricks on steps, repairing broken screens, scrubbing and/or waterproof painting miildew stained basement cinder blocks, repairing leaky faucets etc.

A fresh coat of paint and carpet cleaning are also on my list. At least in my market, the buyers are really looking to have nothing to do and will pick on the most minor issues after inspection. Since buyers also feel this is a "buyers market", to the extreme in some cases, and with the volume of homes on the market, making a home show in the best possible light is the most important aspect of selling a home next to proper pricing.

The minor fix ups cost little in comparison to the increase sales price the sellers will get when the house shows well (and the inspection goes well)
0 votes Thank Flag Link Tue Aug 10, 2010
I think there are certain things that are worth doing and others that are not. For example, to go to the expense of putting in all new kitchen cabinetry just to find out that the buyer wants a different look and is only going to rip them out doesn't make sense. On the other hand, painting, fixing any minor things that look worn, perhaps replacing closet doors if they are outdated or not functioning well, putting up crown molding if there is none and most of all decluttering will certainly help. If the floors need to be redone, that makes a big difference and is less expensive than a lot of other things that can be done.
0 votes Thank Flag Link Tue Aug 10, 2010
As many have suggested, there are many issues involved. One of which is, "Does the owner have the resources to fix it up?"
If yes, does the community values truly support the added value? You don't want to be the highest valued home in the community.
What is the urgency to sell? Low - downsize, medium - probate, High - need cash
Lastly, in the beauty pagent/price war of today's market, it needs to be understood, if you are not a contender in the pagent, you are in a price war. Doing a half-way fix up is not going to work very well.

Except for exceptional properties, I would list everything "As Is."
Web Reference: http://www.mydunedin.com
0 votes Thank Flag Link Tue Aug 10, 2010
I think that is a very broad question. You first should tell us the condition of the home as is, vs other homes in the area. Next: What would be the value, if the home was fixed? The third piece of information I would want would be: How much would the improvements cost? Then lastly: How motivated are your clients to sell? I had a situation, actually it is my house, we could either flip it as is, and make $25,000.00 right now, or slowly put really nice things in the home, like this year we just put in granite and wood floors. When it comes time to sell, we will have a fully reno'd house, and we will make close to $100,000.00. Right now, my wife and I are 23, and we would rather wait for the bigger money because it is a fun project. So, If you could give us a little bit more to go on, maybe we could advise you a little better. Hope this helps!
0 votes Thank Flag Link Tue Aug 10, 2010
John:

It would really depend on the items in question. If the clients have money and are looking for saleability I might suggest doing some painting and improvements that will help the home sell more quickly.

What are your personal thoughts?
0 votes Thank Flag Link Tue Aug 10, 2010
I think you would have to assess the value both "as is" and "fixed up" and see if there was a financially gain to fix it up. The best approach is to look at it as a fha appraiser and fix the items that any if potential buyer makes an offer nad is getting fha financing would need repaired to pass the fha appraisal.

I would also look at what the similar home in the area are selling for an dteh condition they are in and compare the subject house. The price is really going to have to reflect the condition to attract buyers in this market.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Aug 10, 2010
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