The task of selling a house that needs repairs can make the process a costly one as well as time-consuming. You have a few different options that might suit your particular situation. Before you do anything to your home there are a few guidelines to follow that might help when it comes to selling. Check out some of the following tips we have to offer that may help to increase home appraisal value so you can get the most bang for your buck.
Are You Selling A House that Needs Repairs?
Welcome to our guide on How to Increase your Home Value for Appraisal
When you are selling a house that needs repairs there are key areas you might want to focus on that will increase your home’s value for appraisal. Buyers who are looking at a home are most likely going to be concerned about the major factors first. This applies to prospective homeowners as well as investors and house flippers. Major big-ticket items that will soon need replacing in older homes could turn buyers away or negotiate to get the lowest asking price they can get it for. Making necessary repairs not only helps add value back into your home, it could make all the difference when it comes to selling.
Problems like leaking roofs, outdated electrical work or major plumbing issues can make selling extremely difficult. These are the most important improvements you will want to make to your home before listing that will help increase home value and help you sell your home faster:
- Roof repairs
- Damage repairs from water, termites, or mold
- Repair pipes or sewer connections
- Replacing the Water Heater
- New Flooring
- Update the electrical panel
- Update the HVAC System
In older homes replacing the roof is a huge factor in adding value to your home. In fact, replacing the roof can recover over 100% of its resale cost. You will also need to inspect and repair damage caused from termites or water damage and mold as these can create problems for you in the selling process. If the floors are in desperate need of repair, consider investing in new flooring. You could be looking at as much as a 70% return on investment by replacing the flooring, even in just one part of the home.
Adding elements that help your potential homebuyers save money in the long-haul can do wonders for adding value to your home. People of various economic backgrounds who are looking to buy homes agree that Energy-Star rated features are one of many factors they like to look for. Replacing your home’s HVAC system can help you get a little more than 70% on ROI. Insulated vinyl windows that are rated for energy-efficiency can also add value by recovering about 74% of your investment.
VIDEO | Increase Your Home Selling Price
How Much Value Does a New Kitchen Add?
One of the biggest selling points for homebuyers is the kitchen. In case you were wondering just how much value does a kitchen remodel add to your home, here is a little insight. Experts suggest that on average, a kitchen remodel can give you approximately an 80% return of every dollar spent. If you are remodeling a really outdated kitchen with fresh new upgrades you can expect an even greater return. Spacious open kitchens, for instance, are highly sought-after in the modern home.
Here are some ideas to give your kitchen a high-end touch if you are planning to remodel. Be sure to list these in your description when selling your home as well as the appraiser to attract more buyers:
- Granite Countertops
- Custom cabinets
- Stainless steel appliances that are energy-efficient
If you can’t afford to go full on with renovating your kitchen, focus on at least one area of improvement. Consider what is most in need of an upgrade or repair that is also within your budget. Even a small swap such as replacing an ancient microwave or installing a new sink can add value.
Backyard Improvements That Add Value
For homebuyers with families or looking for space to entertain, the outside space is just as important as what’s inside. Here are some ideas and tips on backyard improvements that add value to your home.
Adding features for an outdoor kitchen provide an extension of your home that can also translate to added value. Outdoor kitchens have gained a lot of popularity for homeowners. You can create the perfect space for an outdoor kitchen with minimal improvements by adding essential elements:
- Covering that offers shelter from rain and shade from the sun
- A paved space for tables and seating such as a concrete patio or blocks
- Storage space
- A fire pit
Provide a covered area that offers sufficient shelter from the elements such as sun and rain. Maintain natural ventilation or install a ceiling fan to make the space more comfortable during the hotter months. Install a fire pit to enjoy the cooler months. It doesn’t have to be a permanent fixture, but something that offers an inviting space. The idea is to create a space that can be enjoyed for at least 3 out of the 4 seasons. Expert realtors suggest that backyard improvements such as these can recoup approximately 60-70% of your ROI.
Don’t forget that first impressions are everything. Some sprucing up and small improvements that add curb appeal can give you more bang for your buck. A little yard maintenance can go a long way so give your lawn a trim and remove unsightly weeds before showing it off. Give your front door a facelift with a new coat of paint or a richly-stained finish. If your garage door has seen its better days, consider giving it a fresh coat of paint as well.
What NOT to Fix When Selling a House
You may wish to fix everything in the home prior to selling in order to get top dollar, but there are some upgrades that just aren’t worth it. When taken into value there are certain big expenses that will not offer you a substantial return on investment. This is especially true based on the market that you’re in.
Structurally and functionally, if the upgrade is not essential to the function of the home then don’t worry about it. High-end appliances are a nice touch to attract buyers, but if the current appliances still function just fine and they are in decent condition then leave them. This is especially true if you are not remodeling the entire kitchen.
Do’s and Don’ts to Adding Square Feet
There are certain improvements you can make that help to increase the square feet of your home. While this may seem like a good idea to bring up the value, take caution in your remodel plans. Not all ideas are smart moves.
If your home has a basement take consideration and time into finishing it. This can add functional living space to your home and increase value.
Don’t turn an outdoor space into a living space by adding a sunroom. Realtors have found sunrooms actually decrease value as they run into maintenance issues.
Do: Deck or Patio
Adding a deck or patio to your home creates a space ideal for entertaining and can add a positive element to a small backyard. Depending on the materials and size of the improvement you can see as much as an 80% ROI.
If you are having trouble deciding what to renovate to get the most bang for your buck here’s a tip: first determine what the market value of your home is based on the current market you are in. What are homes that are comparable to yours going for in your neighborhood? You can ask a local real estate agent for a current market analysis that has this information. Next, consider the return on investment for the improvements and how the adjustment relates to your asking price.
Here’s a general rule of thumb from an expert – for every $2,500 in upgrades or improvements you should add a $10,000 gain to your market value to justify it. So, if your renovation will cost you more than $15-20,000 can you realistically list and sell your home for the value based on that market gain in the current market you are in?
Cheap Fixes for Selling a House
If you can’t make any major repairs to the house there are some minor renovations and improvements that can help make it more appealing without setting you back financially. Sprucing up key areas such as kitchen and bathrooms may give you a better return of investment in the long-run, especially if you are in a buyer’s market.
Even experts recommend, if you are going to make any renovations or improvements to increase home value, start with the kitchen. Bathroom updates are equally a smart move to add value, and can be relatively inexpensive if they are done right. You might be surprised how much you can improve your home’s value by making minor updates.
If the cabinets could use a bit of a facelift, consider buying new hardware. Look around online or your local hardware store for ideas that will go well in the space. You can usually purchase these individually so you can start with one and see how it looks first before replacing all of the hardware. You may need to take measurements for handles that require 2 screws before purchasing new ones to ensure you get the right fit.
Replacing the kitchen or bathroom fixtures can really bump up the value of your home by as much as 70% return on investment, especially showers. They don’t have to be designer fixtures. Shop around for affordable shower fixtures that can add a modern element to an outdated bathroom. Consider replacing dim lighting with new fixtures or even better light bulbs that help brighten up the space. Swap out an outdated vanity for a more modern appeal.
Seal Up Cracks
Minor improvements like re-caulking and sealing up cracks can help improve the overall appearance. Replace caulking around tubs, toilets, and faucets or wherever needed to seal up any visible cracks.
Replace Broken Tiles
If you have tiles that are in need of replacing in the kitchen or bathroom this can be a cheap fix to attract buyers.
Spruce Up the Walls
It’s amazing what a fresh new coat of paint can do to a room, especially if it’s a really unique color. Use neutral tones to repaint a room for a fresh, new look that is inviting and brightens up small spaces. Replace outdated wallpaper with a faux or textured finish.
Have Carpets Cleaned
If you can’t change out the carpeting in your home, hire a professional service to come in for a cleaning. Old, dingy, or stained carpeting can be off-putting especially in popular areas of the home such as living spaces. Having a professional service do the job can bring new life to your carpets.
Some additional tips on selling your house are making small changes or improvements that give it a more spacious feel. Larger spaces and more square feet certainly increase home value. We’re not suggesting adding on to your home, however because that would be a major renovation. Here are some tricks on how to make a small space appear larger and more attractive to prospective homebuyers.
- Replace heavy drapes with window treatments like vertical blinds or shutters to allow more light in.
- Add in a single large mirror
- Remove any clutter
The more clutter in a space, the more cramped it will feel. When you are ready to sell your home remove any clutter before showing it off to buyers or taking pictures. Remove furniture that will not be included or change up the floor plan to create a more open feel.
Selling a House As Is / Advice
For a number of reasons making extensive repairs to your home may not be an option. If you are not planning on making repairs and want to sell your house as is there are a few things you need to know. First, understand that you will likely have to lower the sale price than what you would get for it if you had repairs or updates made to the home.
Complete a pre-inspection on the home and disclose the report to prospective buyers. A listing agent might be able to propose the opportunity to potential investors, house flippers or home-buyers seeking a fixer-upper. Keep in mind that homes listed for sale that are in need of a lot of repairs will attract a very limited demographic. Home buyers who are looking and willing to purchase a home in as-is condition are typically those who have the cash flow and skillset to fix it up.
When you list your home to sell, you should include ‘as-is’ in the description. This will let potential buyers know that no repairs are being made, even if they opt to have an inspection before buying. Listing ‘As Is’ makes it clear that what they see is what they get so there are no surprises or issues after the sale.
Listing with an Agent
If you are selling a house that needs repairs, going through a real estate agent may be in your best interest. You may be thinking that hiring an agent will just cut your losses even more once they take their commission, but here is some food for thought. Experienced agents know the market and understand home value. They are skilled at marketing homes in a wide range of conditions and can help to answer questions you may have when it comes to selling your home.
Find an agent who is experienced in marketing and selling homes as fixer-uppers. Local agents with years of experience can price your home appropriately so it can attract the right buyers and help you reach your needs. They may also be able to provide additional resources and tips that will help in the closing process.
If you choose to list your home yourself here are some helpful tips to keep in mind. When selling a house that needs repairs, focus on the positive elements. Location, for instance, could be a major selling point for certain homebuyers, such as proximity to towns and shops. Find out what school zone your home is in for potential buyers with children. Be sure to list and point out positive features with keywords in your description that are accurate.
Clean it up! Even if you are selling your home in as-is condition, cleaning and tidying it up prior to selling will go a long way to improve its overall appearance. Remove clutter and clean out closets to showcase your closet space.
Know the market for selling your home. Is it in a buyer’s market or seller’s market? A buyer’s market means you have more potential homeowners looking to purchase a home to call their own. A seller’s market is one with more investors and house-flippers. These buyers are looking for fixer-uppers that can translate to profitable investments. Why is it important to know the market? When it comes to selling a house that needs repairs, potential investors and house-flippers will overlook the minor cosmetic issues as these are quick and easy fixes. You will need to focus your efforts on the major issues for the best ROI. Home buyers looking to become homeowners are looking for something more appealing to their needs.
You might need to do a little digging and research to come up with an appropriate price for selling your home. Compare nearby homes in your area based on their final sale price. Look at homes that are within ½ mile from your home and have a square-footage within 10% of what your home’s square feet is. Consider hiring an independent appraiser who can provide a fair market value on your home.