Selling a House that Needs Repairs In Detroit
Selling your home in the real estate market can be overwhelming if it requires many fixes. You’ll need to put in time and money, plus patience, throughout the process. So, it’s essential to carefully consider your approach to selling.
There are four main ways to sell a house needing significant repairs: address major issues, make minor cosmetic improvements, sell as-is on the market, or sell as-is off-market. Among these choices, the most financially beneficial are selling the house as-is to a traditional buyer or a cash buyer. If you require quick cash, the latter is the preferable option.
Interested to learn more about selling a fixer-upper? We’ve got you covered! Here we’ll discuss all your options and help you decide which would net you the best value for your home.
Can You Sell a House that Needs Repairs In Detroit?
Absolutely. You can sell a house in need of repairs but don’t expect a top-dollar deal, especially if you’re not planning on fixing it up.
When selling a fixer-upper, most opt to sell it as-is. However, offers may not be as lucrative as move-in ready properties since fewer retail buyers are keen on such homes.
If you’re keen on a quick sale without a long listing period, consider selling directly to a cash buyer or investor. These buyers seek properties to renovate and would be willing to offer cash for your home in need of significant repairs.
How to Sell a House that Needs Repairs In Detroit
When selling a house that needs work, you’ve got a range of choices. While it’s been noted that selling it without making any changes is often the best approach, it’s wise to explore other possibilities as well, given that every home sale is different. You may discover that carrying out repairs prior to selling could yield a higher profit.
Here are four methods for selling a house in need of extensive repairs!
Make Major Repairs Before Selling
Fixing major problems before selling your house means tackling high-priority issues like roof, wiring, foundation, etc. These pricey fixes are often about safety, so managing them can be tense.
Here’s a list of the main repairs you should do before selling your house:
- Roofing: Most often, roof repairs cannot be DIY’d. If roof replacement is needed, you may have to spend an average of $5,000 to $10,000 before you can sell your home. This may even go upward if the house is huge.
- Foundation Issues: Foundation repairs for your home will run you thousands of dollars, similar to roof repairs. In fact, this may even be the most expensive repair. If your home has foundation issues, it will cause cracked walls, sloping floors, water pooling in low spots, and other hazards, so they should really be addressed.
- Electrical Issues: If the wirings and panels of your home are already outdated, this can cause a fire hazard, so you need to repair them. Keep in mind that fixing and replacing panels cannot be DIY’d either, so you have to hire a professional to do the work.
- Sewer Connections and Septic Tanks: Issues with sewer connections and septic tanks can lead to major health risks and home damage. If your home needs septic tank and sewer line replacement, expect to pay an average of $5,000 to $12,000. These home repairs also take a few days to complete.
- Plumbing Issues: Some of the home plumbing issues you should address are leaking toilets, dripping faucets, clogged drains, undetected leaks, and exterior plumbing problems.
When all these major issues are fixed, you’ll be able to sell a house on the market. However, there’s no guarantee that you’ll gain more profit since you will be investing a lot of time and money to make the repairs.
Make Minor Repairs Before Selling
If you cannot afford the major fixes, working on the least expensive repairs can also help you sell your home.
These simple home repairs may include the following:
- Paint: Giving your home (both internally and externally) a fresh coat of paint won’t break the bank and is very effective in improving curb appeal. Using neutral colors is typically more appealing to homebuyers.
- Cracked Drywall: Cracked drywall due to land movement or age of the house can be repaired by concrete patching or joint compound. This is pretty inexpensive, so it’s a good thing to work on before you sell your home.
- Flooring: Another minor repair that you should consider prioritizing before you sell your home is the flooring. To spend less, skip replacing the tiles or buying new carpet for your home. Instead, have the traditional carpet washed and the tiles cleaned to look like they are well-maintained.
- Lighting Fixtures: Replacing the lighting fixtures of the house not only updates how the home looks but also shows how much space there is inside. You don’t have to install chandeliers or other grand lighting– minimalist aesthetic lighting will do.
When these minor repairs are addressed, the major issues of the home won’t be as daunting to average homebuyers. However, in pricing your property, you should still discount the major repairs needed to be made.
Make Major Home Repairs Through a Government-Sponsored Grant
The United States Department of Agriculture (USDA) provides loans or grants to individual homeowners for fixing up their homes to prevent safety and health risks. This assistance is aimed at elderly homeowners or those with low incomes.
You can verify if your property qualifies by visiting the USDA’s eligibility page. The process of applying and getting approval hinges on the funding situation in your area. After completing the repairs, you can sell your home at a marketable price.
Sell As-Is
If you lack the resources or time for fixes, and your property doesn’t qualify for assistance, your final recourse is to sell it as-is.
Selling as-is entails selling the property without any alterations. Essentially, you won’t be handling any repairs, major or minor, and the buyer won’t anticipate you footing the bill for fixes. Essentially, the property is marketed as a project for the buyer.
Numerous homeowners find themselves needing to offload their property without making any fixes…
You Need To Move Right Away
If you need to sell your house immediately because you need to move places due to a job offer or a sick relative, selling it as-is would make everything easier.
You would no longer think of home repairs that could take weeks or months and you also save some money.
This is especially true if you sell to a cash buyer or investor. These companies buy fixer upper houses fast and they pay with cash.
You Don’t Want to Deal with Home Repairs
Fixing things in a house can be expensive. It may drain your bank account, especially if there are big problems. But it’s not just about money – fixing stuff also takes up your time, energy, and patience.
If you’d rather skip all that hassle and still make some cash from your property, selling it as-is could be a smarter choice.
Your Home Is Not Worth That Much
Your home may not fetch a high price, depending on the local real estate market. Even with major repairs, you may not make much profit when you sell. That’s when selling your home as-is makes financial sense.
Pros and Cons of Selling a House As-Is
To help you further decide how to sell a home that needs repairs, check out these pros and cons of selling a house as is.
Pros of Selling a Home As-Is
- Save money on renovations. As illustrated earlier, a repair or an improvement to your property can easily cost you thousands of dollars. If you can’t afford the cost, this may put you in debt if bigger issues are discovered while making renovations. You can skip the renovation costs when you sell as-is removing the risk of going into debt.
- Save time. Keep in mind that repairs sometimes take months to finish depending on the damage and on how fast the contractor works. If you need to sell the house fast and save time, selling as-is is the answer. Since a fixer upper is cheaper due to the repairs needed, the retail buyer would be able to pay in cash and won’t need to apply for a mortgage. The process is even faster when you sell to a cash buyer or investor.
- Avoid haggling over repair costs. When selling a home as-is, you can set a price discount and tell the buyer that that is your limit— you won’t be covering repair costs or giving further credits. Once you have laid this out, there’s no repair costs to negotiate even after the inspection. If you’re selling to a cash buyer or investor, it’s even easier since there is no formal inspection. Cash home buyers will give you a cash offer based on their assessment of your house as-is.
Cons of Selling a Home As-Is
- You’ll receive fewer retail offers. While the asking price of a home that needs repairs is typically low, the repairs may still scare some retail buyers off. Also, most lenders do not approve mortgage applications on fixer uppers due to lender required repairs. This means that when you sell the house on the market, the number of potential buyers is limited to those that can pay cash.
- Lower sales price. Selling a house as-is means the buyer needs to eat the cost of all the repairs needed. Thus, sellers won’t be able to set a competitive asking price compared to move-in ready homes.
- You may not be able to. If you are set on selling to a retail buyer who requires a loan, expect to pay for repairs that allow the loan to be approved. If you cannot pay for the necessary repairs, you will not be able to sell the home to a conventional buyer. However, if you are willing to accept an offer from a company that buys houses for cash, you are guaranteed to avoid paying for any repairs.
Steps in Selling a House As-Is on the Real Estate Market
The process of selling a home as-is on the real estate market is faster in terms of preparation but slower when it comes to actually closing due to the limited pool of buyers.
To sell a home that needs repairs on the market, here are the steps you need to follow.
Hire a Real Estate Agent Who Has Experience in Selling a Home As-Is
Realtors can figure out the right price for your property by comparing it with similar ones on the market (CMA) and factoring in any needed repairs.
Although it may seem like a small thing when you’re selling your home, pricing it correctly stops it from staying unsold for too long.
Another benefit of working with a real estate agent is that they can introduce you to buyers who are interested in homes that need fixing up. These buyers are aware of what they’re getting into when they purchase a property that needs work.
Furthermore, because real estate agents have plenty of experience, they know how to make a fixer-upper attractive to potential buyers, even if it requires renovations. They’ll also assist you in negotiating a fair price.
However, for their services, real estate agents charge commission fees, which will decrease your overall profit.
Do a Home Inspection
Prior to putting your property on the market, ensure to schedule a home inspection. This will uncover any issues with the property, big or small, that you must disclose to potential buyers.
While a home inspection may run you $300 to $400, it’s a modest investment compared to potential legal ramifications for failing to disclose defects.
Furthermore, a home inspection demonstrates transparency to buyers, potentially expediting the sale process.
Get Cost Estimates for Repairs
Even if you have decided not to make any repairs when you sell your home, it is still suggested to find out how much it would cost. This can help you gain more negotiating power with buyers.
To illustrate, if you do not know how much roof replacement costs, the buyer could quote you an inflated amount. Having cost estimates removes the uncertainty from your home’s value.
Also, when you know how much each repair may cost, you may find that there are repairs that you can actually do because they are within your budget. This may help you net more money at the closing table.
Set a Realistic Price
One common mistake in selling a home as-is is asking too much, pretending there are no issues.
When pricing your fixer-upper, be realistic, considering both positives and negatives.
With a good agent, pricing a fixer-upper isn’t hard—they have the tools.
But if you’re selling on your own, it’s tough unless you find an investor or cash buyer who’ll make a flat offer.
List Your Home and Disclose Defects
Once the inspection is complete and you’ve established a realistic price, you can list your property on the local real estate market.
When selling your property, emphasize its strong points such as unique features and location. Even if your property requires repairs, highlight any upgrades you’ve made. Are there new windows or a renovated front door?
Despite any necessary renovations, location remains essential. Your property may still boast desirable features. Is it close to public transportation, good schools, hospitals, or family-friendly parks?
It’s essential to disclose any flaws in the property to potential buyers. They have a right to know what they’re getting into, though these issues can be addressed in the purchase agreement rather than the online listing.
Remember, most states mandate that sellers provide buyers with a disclosure report before closing the deal. This is especially important if the property has issues like foundation, roofing, plumbing, mold, or others. Failing to do so could lead to legal repercussions.
Targeting Buyers When Selling a House As-Is In Detroit
Whether you are selling your house FSBO or through a real estate agent, you should know your target buyers. This will save you time and money in marketing and help you land a buyer faster.
First Time Buyers
Buyers who don’t have any experience buying a house may be more willing to fix up a home for a discounted price. They’re often younger and eager to dive into renovations. Plus, they can customize it to their liking.
Most rookies are okay with fixing things up if the price is right. But major structural issues could scare them off, as they pose a bigger risk of costly troubles.
Bargain Hunters
Bargain hunters are buyers who desire to reside in a certain location but lack the funds for homes with high quality and costly value. They aim for properties sold “as-is,” especially those requiring simple cosmetic touch-ups such as painting or flooring.
Landlords
Landlords who enjoy fixing up properties to rent them out are always on the lookout for homes that need a lot of work. These buyers are looking for a deep deal to have enough room to make the repairs and cash flow on the rent.
Developers
Builders often purchase properties requiring extensive renovations in bulk. They refurbish these properties with the aim of generating profit.
Taking into account factors such as location, zoning regulations, and the condition of the property, they may reconfigure it to serve as offices, retail establishments, or a residential complex.
Selling As-Is to a Cash Buyer or Investor
If you’re not getting any bites from the retail buyers we mentioned earlier, you still have another option: selling off-market.
Cash buyers and investors are highly motivated buyers of properties in their current condition. They’re used to buying houses as-is, unlike traditional buyers. They make offers on houses regardless of their state or condition.
Selling to a cash buyer or investor is also convenient because it eliminates the need for a middleman or real estate agent.
The process moves quickly because cash buyers and investors don’t need financing—they have enough funds to allow sellers to receive cash within weeks.
Final Thoughts:
Selling a House That Needs Repairs In Detroit
Selling a house needing fixes can feel overwhelming if you’re unsure what to do. Knowing your choices makes it easier. You can do minor or major repairs before selling, seek grants to fund fixes, or sell as-is.
Opting for a cash buyer speeds up the process and reduces stress. If you’re interested, contact We Buy Houses in Metro Detroit! We buy homes as-is, no repairs needed. Get started by filling out the form or calling (313) 710-7744!
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Author: Saini
My name is Saini, and I founded the We Buy Houses in Metro Detroit team with years of experience in the real estate industry. I have assisted numerous sellers in selling their homes quickly, “AS-IS”, and for a fair price.
He’s been featured in multiple publications including Yahoo Finance, GoBankingRates, LegalZoom, The Mortgage Report, Apartment Therapy, US News and World Report, and SuperMoney among others.