Damaged houses are not a rarity, but can be a pain for homeowners who are looking to sell. The market, especially in Riverside, can feel hopeless if they’re selling a house that needs work.
Because of a high inventory and quick moving housing market, the market action index in Riverside is nearly always above 30, indicating a consistent seller’s market. That, in theory, sounds great for Riverside homeowners looking to sell their home needing repairs, but it can actually be a detriment.
New inventory hits the market every day in Riverside, so buyers will likely never view a home needing repairs unless that is specifically what they are in the market for.
Buyers in Riverside can have their pick of homes – where does that leave a homeowner whose home needs repair work?
Typically, in the dust.
Homes in need of repair often go unseen because they are at the bottom of an ever-growing list of buyer’s homes to view.
What Type of Houses Need Repair Work?
Not all homes need repairs. Many newer homes can be sold as-is. Some homes, however, will not be competitive in the market depending on the presence or absence of certain features.
Houses could need repairs for several reasons. If you’re thinking of selling, it is worth examining your home’s existing structure, mechanics, exterior condition, landscaping, kitchen functionality, bathroom features, flooring and more.
Seem like a lot? It can be.
But, the little things like new caulking, green grass, and updated wiring can make all the difference in your journey to selling a house that needs work.
Is Selling These Homes a Viable Option?
If you’ve recognized that your home is definitely in need of repairs, whether big or small, it can seem impossible to get your home into sellable condition.
Plus, what if it turns out to not even be worth the investment of making repairs?
Let’s Compare Selling a Turn-Key Home and an As-Is Home in Riverside
A recently sold listing in Riverside sold after nearly two months on the market for a price of $176 per square foot – after the owners invested $25 thousand to upgrade the pool and the roof.
In contrast, a turn-key home with the same bed and bathroom count and in the same MLS area, sold after just 22 days on the market for a price of $354 per square foot. No repairs were made to this home.
As you can see, investing money into making repairs does not always pay off.
Additionally, you may not have the money or time to invest in making those repairs. Including the $25 thousand invested in repairs, the owner of the first listing likely took a loss or barely broke-even with that sale price.
Depending on your specific situation, you’ll need to evaluate whether or not you are willing to take a chance on making repairs that you aren’t sure will be advantageous. But, in the Riverside market specifically, that can be a dangerous gamble.
Who Buys Homes That Are in Need of Repairs?
Homes in need of repairs are not the easiest homes to sell in the real estate market by any means. This is especially true, however, in Riverside where buyers are presented with fresh, new homes on the market daily.
You’ve probably thought about traditional home buyers who may be looking for a project home. These people do exist but are not common. Most traditional homebuyers want a turn-key home, or at minimum a home with repairs that are easily done by someone of average skill level.
There are, however, a few additional potential sources of help if you’ve found yourself trying to sell your fixer-upper.
5 Ways of Selling a House that Needs Work
If you have found yourself stuck when you know you’re selling a house that needs work, you have a few options.
1. Completely Remodel Your House
Completely remodeling a home in need of repair is the easiest way to sell a home in the traditional real estate market, but depending on condition can prove to be the most costly. Let’s look at some examples.
According to data by remodeling.net contained in the 2018 Cost Vs. Value Report, in the Pacific region of the U.S., very few remodeling projects recoup 100 percent of the homeowner’s investment.
Applying manufactured stone veneer and replacing the garage door are the only two remodeling projects that increase a home’s value enough to break even or produce a profit, in the Pacific region’s real estate market.
Among the worst is the addition of a master suite. On average, adding an upscale master suite costs about $276,069 and adds only $144,042 in value.
Completely remodeling your home is likely only viable if you have few, and very specific, repairs to make.
2. Focus on Repairing Only Major Items in Your House
In some cases, a house may only need some of the big-ticket repairs to be completed before it becomes a viable contender on the real estate market.
One of the biggest deterrents to buyers is the inability to move in right away.
If your home needs some repairs, but only some of them affect the immediate livability, it may be in your best interest to make only a portion of the repairs. Buyers will be able to look past some issues that don’t require immediate attention.
Features such as infrastructure, HVAC, and plumbing should be in sound shape. Landscaping and curb-appeal may be able to be handled by the buyer after the sale. You should keep in mind though that some buyers will want a price reduction to make the repairs after the sale.
3. Sell Your House As-Is
This option works for some in a pinch.
If you don’t want to invest the time, money, or other resources to make any repairs to your house, you may be able to sell it as-is.
You will certainly have to settle for a lower sales price, however, and as-is homes will likely sit on the market for longer.
If you’re currently paying a mortgage on your home, monthly mortgage payments can pile-up easily while your home is on the market.
As-is homes can only sell quickly if they are listed well below market value, so you may take a loss in the end, if it even manages to sell at all.
4. Utilize a Traditional Real Estate Agent
Real estate agents have one sole purpose in their career – to understand their local real estate market. If you are really unsure of what path to take, advisement from a traditional real estate agent is an option. Local real estate agents will understand market trends, home value, and know the features that local buyers look for most.
Real estate agents can publish your home on the agent-exclusive Multiple Listing Service in Riverside which will expose your home to many more buyers than if you tried to do it on your own. Additionally, they have an understanding of how to sell a home needing repairs. Some agents will even offer services like home staging to increase the chance of the sale.
The downside of using a real estate agent is that you will likely need to pay a commission. Listing your home for sale with a real estate team will come alongside an agreement for you to pay a certain percentage of the sales price to the agents involved in the transaction. These fees sometimes eclipse the value of using an agent.
5. Sell Your House to SoCal Home Buyers
This is potentially the fastest and easiest option to selling a house that needs work.
SoCal Home Buyers is a real estate investment group that is looking for homes in any condition in Riverside. They buy houses without the need for any repairs, cleaning, or any other investments. Additionally, transactions with SoCal are completed in seven days – and the best part – at the close of escrow you receive your full offer in cash.
Whether you are unsure about investing money needlessly into repairs, want to sell your home quickly, don’t want the responsibility of selling your home or want to forego transaction fees from the traditional real estate market, SoCal Home Buyers is an option worth looking into.
The offer made to you by SoCal home buyers will exclude any costs to make the necessary repairs, so you will know exactly how much money they’ll be giving you.
The Choice is Yours – But Be Careful
The real estate market is tricky and has lots of complexities an average homeowner does not understand. It can be very easy to mis-invest or lose money in the market.
You certainly have the option to complete repairs on your own in hopes of increasing your home’s value or try to sell your home as-is, but be aware you have the potential to lose money through ongoing mortgage payments, reduced sale price, or commissions and transaction fees.
As with any business transaction, explore your options thoroughly and make wise decisions.