Do you have a property that needs serious updates? Are you looking to sell that property? If so, you’ve probably wondered whether renovating before listing or simply selling “as-is” would be the most profitable approach.
There’s no absolute right or wrong answer. You can only take a close look at your situation and make the best decision to meet your unique needs. To help you make that best decision, here’s a look at a seven-step process you can use when considering whether to renovate first or simply sell as-is.
1. Make a List
Start by making a list of everything that needs an update. The list should include major things (like fixing foundation issues or replacing a damaged roof) and minor things (like swapping out light fixtures or painting rooms).
Be as comprehensive as possible when making your list. You can only make a good, well-informed decision on whether to renovate or sell as-is if you’re thorough when mapping out everything that needs to be addressed.
2. Create a Budget
Once your list is created, put some numbers behind it by creating a budget. You can analyze the cost of many minor things on your list but reach out to professionals for the major things. The good news is that most service providers will give you a free estimate before the work begins. That is, you have nothing to lose by getting quotes.
3. Consider Cosmetic Updates
When you consider home improvement, there are different levels of renovation to think through. For example, you can divide your list into major things that need outside help and minor things that you might be able to do on your own. The list of minor things might include many different cosmetic updates that require only a small investment.
If you can do a low-impact renovation that includes mostly minor, cosmetic updates, that might be a good way to split the difference between a full renovation and selling as-is. And it might also be the best way to maximize your return on investment.
4. Monitor the Market
You also want to get to know the local market before making a decision. If selling as-is, you’ll likely be selling to a real estate investor or someone who will attempt to flip the home in a matter of months. Is your market a place where investors and flippers are buying and selling regularly? If so, selling as-is might be an attractive option. But, if there doesn’t appear to be much flipping activity, you may need to do at least a minor renovation on your own in order to maximize the amount of equity you walk away with.
5. Consider Your Equity Needs
There’s a financial aspect to this, of course. Many homeowners need to sell at a certain price point to get a specific amount of equity out of the home. Only you know your specific financial needs, but it’s important to make a renovation-vs.-as-is decision that supports those financial needs.
6. Map Out a Timeline
How soon do you need to sell? If you have a little bit of time, consider mapping out a timeline that includes updates spread out over a few months. It’s easier to absorb the cost of even a minor renovation when you’re paying for it a little bit at a time rather than all at once.
Do you need to sell fast? That’s OK. It’s still important to map out a timeline of the updates you want to make so that the process is as organized and streamlined as possible.
7. Get Professional Support
This is really important: You don’t have to do this alone. Real estate agents exist to support buyers and sellers, even those who are looking to sell homes that need significant improvements. In fact, real estate agents provide the most value in situations that are more challenging.
If you’re trying to make a decision between renovating and selling as-is, look for an agent that knows your area and that can offer a track record of selling homes that need improvements. A quality real estate agent will be able to walk through your home and provide counsel on what improvements (if any) will move the needle on ROI.
And you can always contact me with questions about renovating a home or selling as-is. If you find yourself in this situation, even if you’re not close to putting your home on the market, email me at pthessen1@gmail.com.
-submitted by Perry Thessen
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