If you find yourself with a dilapidated house to sell, it’s highly likely you’ll have a few questions about the process. Is selling a run down home the same as marketing a well-maintained property? Should you carry out the repairs or pass them on? What sort of hit will the property’s value take? Where’s best to sell a neglected house?
In today’s post, we’ll answer all of the above, as we take a deep dive into how to sell a house that needs renovating.
Let’s get started, shall we?
Do dilapidated houses sell?
It can be easy to see a neglected property as unsellable, but the reality is quite different. Even the most run down houses eventually find a buyer, although you might have to adjust your expectations slightly when it comes to speed and sale price (more of which in a bit).
Take aim at the right audience
As with any sales process, knowing your target market is vital if you want to successfully complete on a property that isn’t at its best. While most of the open market will be looking for a move with minimal hassle, there is a small section of the property market who are actively seeking out homes that need work.
Developers, part-time house flippers (someone who buys property with the intention of quickly reselling at a profit), buyers constrained by budget, and landlords looking to extend their buy-to-let portfolio will all have an interest in buying homes that need renovating, so there’s no shortage out there and you should market accordingly.
How much less do run down houses sell for?
It doesn’t take the brains of Britain to work out that a home in need of significant repairs will fetch less than a pristine property. The question is, how much less? Unfortunately, there’s no one-size-fits-all answer, as the variables at play will have an impact on the valuation, but there are things you can do to get a good idea of what your dilapidated home is worth.
Firstly, take stock of what’s wrong and compile a list of all the crucial repairs required to bring the property back from the brink. This list will serve a dual purpose, helping both your marketing and valuation, as you’ll now be able to get quotes on the repairs and form an idea of what buyers will need to fork out to put things right.
Location, location, location applies to fixer-uppers like yours as well, so this should be factored into your valuation, too. Do your homework on the local housing market to see what your property will be valued at once work is complete. Buyer’s will want to see a tidy profit from their hard work, but there’s no need to give away free money. Find that middle ground.
You should also call on a reputable and highly regarded local estate agent, like Petty’s, to get their expert opinion on how much your property will fetch if marketed ‘as is’. Be clear from the start about your position and let them know if you’re looking for a quick sale or have a bit of wiggle room in terms of timescale.
This will allow the agent to give you a fair market appraisal that factors in your own personal circumstances. Remember that a realistic figure is what you’re looking for, but that can vary slightly if you are able to wait it out, so be clear and honest about your situation from the start.
Should you repair anything at all before selling a neglected house?
In terms of really major works, the answer is likely going to be no. This is especially true if you are looking for a fast exit or simply don’t have the required finances to carry them out.
Same goes for restorative work on highly emotive and personal areas like bathrooms and kitchens. Time after time, sellers choose to revamp their kitchens in order to add a bit to their asking price and fail miserably.
This kind of work generally doesn’t offer a great return on investment and sellers often see that new kitchen in the skip when they drive by post-sale, which makes it a waste of time, money, and resources. Not smart.
Somewhat counterintuitively, however, small repairs can definitely be worth tackling. Improving the property’s kerb appeal to make a better first impression is always a good idea, as is getting your legal kerb appeal in order, too.
A good rule of thumb to remember here is this: If it helps highlight the property’s potential and doesn’t cost the earth to complete, get it done. Everything else can be forgotten about if you’re selling the house as a fixer-upper.
Three ways to sell a house that needs renovating
With the top three questions people ask about selling run down property out of the way, it’s time to take a look at the three most common ways such homes are sold.
Although you are targeting quite a niche audience, the open market is still the best place to start. Sure, there will be a huge number of people out there who’ll have absolutely no interest in your home whatsoever, but you only need one person to buy the property and it’s highly likely that person is searching the property portals like everyone else.
One thing that is absolutely essential when selling on the open market is your choice of agent. Choosing the right estate agent is vital if you’re going to get the best price for your property and go through the sale with a minimal amount of stress and fuss. Taking a little time here can repay you handsomely further down the line.
Many sellers mistakenly think that developers, landlords, flippers and the rest are solely buying property at auction, so this must be the right place to market their home. After all, if two potential buyers fall in love with the property they’ll fight it out in a bidding war and the guide price will be smashed…
Sadly, this scenario often doesn’t play out as envisaged.
Again, it’s important to remember who you’re selling to and why they are buying houses in need of renovation. Think about it, are these kinds of buyers really going to get drawn into something that isn’t profitable for them? It’s unlikely.
That’s not to say that auctions should be overlooked entirely, far from it, but you should definitely be somewhat leery of the many ‘success’ stories you’ll read online where the guide price has been doubled. Keep in mind the old adage: if it seems too good to be true, it probably is.
House buying companies
Another route those selling run down property can consider is house buying companies. These firms have been around a while, but their popularity has grown over the last decade or so, thanks largely to the low barrier to entry the Internet has provided.
Regrettably, many of these companies are less than transparent about their methods, and a few are downright criminal in their actions. A common scam house buying companies pull is to agree a price for the property in question, only to reduce their offer right at the last minute.
We’re not talking insignificant price drops either, as some sellers have been stung for as much as a third of the initially agreed price! While this is an extreme case, it does happen, and with alarming regularity at smaller percentages, so be warned.
If you still think a quick sale company is the right fit for you, you should, at the very least, demand a copy of their fee structure in writing before you sign anything. Too often, sellers have been hit with astronomical fees they had no idea were coming when it’s too late to back out. Don’t allow this to happen to you.
Final thoughts on selling a house in need of repair
We hope you’ve found the answers you were looking for and now feel better equipped to move forward with selling a house that needs more than a little tender loving care lavished upon it. Selling such properties needn’t be stressful, but it is important to have the right people by your side as you work your way through the process.
Here at Petty’s, we’ve been part of the local property market for well over a century, so we know a thing or two about what works and what doesn’t. So, if you’ve got a fixer-upper to sell in East London or West Essex, come and speak to us.
Not only will we give you an honest market appraisal, we’ll also hold your hand throughout the entire sale, keeping you informed every step of the way. Give us a call today to find out exactly how we can help you achieve the best price for your fixer-upper in a timeframe that suits you.