One of the first decisions a homeowner needs to make when selling their fire-damaged house (or any house for that matter) is – fix it up or sell it “as is”?
The answer to this question can differ depending on a homeowner’s circumstances.
For instance, if a homeowner is tight on money and needs to sell fast, then “selling house as is” may be the way to go.
On the other hand, if the homeowner is flush with cash and has time, fixing up the house could result in a higher sales price and greater profit.
Let’s take a closer look at both options:
Selling House As Is
If your house is in good condition then selling it “as is” might be a no-brainer decision.
But what it the home has been damaged by fire or is old and run down?
Does it then make more sense to choose “selling house as is” or to choose the “repairing the house” option?
Let’s Consider a House That Has Been Damaged by Fire
Many homeowners in this situation go ahead and choose to repair the house; however, for many this can end up being a mistake.
Why? Because the repair process can take longer and be more expensive than the owner originally estimated.
Unfortunately, fire damaged houses can often have more extensive damage than just what is visible.
For instance, they could have smoke damage behind walls or in the air ducts that the homeowner can’t readily see. Smoke damage can also be quite expensive and difficult to get rid of.
Contractor Quality Also Matters
The success of a repair project can also depend greatly on the quality of the contractor selected to perform the work.
Many contractors end up falling behind schedule for one reason or another and if a homeowner is attempting to live in the home while it is being repaired this can be very inconvenient.
Likewise, if a homeowner is renting a place to stay the delays can prove to be unexpectedly expensive.
That’s why many experts recommend that owners of fire damaged homes consider the “selling house as is” option.
Other Issues With Repairing a House
Whether you are fixing up a house to live in or to sell for a profit, one thing you must be very careful about is the cost of the repairs that you decide to make.
For example, if you are repairing a house to sell and you go over budget you may find it very difficult to sell the house for a price that is high enough to give you a good profit.
House flippers, particularly those who are not careful, often run into this problem. In fact, it ends up putting many out of business all together.
Repairs can be expensive and underestimating the cost can put the house owner in hole they simply can’t escape from.
You also have to be very careful about whether the repairs are worth it or not. If you make repairs to a home that don’t significantly raise its value you could be caught decreasing the profit from a sale instead of increasing it.
Improvements Don’t Always Have the Effect That You Intended
For instance, there was a recent magazine article that detailed many of the houses from those home improvement shows on TV were having difficulty selling for anywhere near the price the owners wanted.
All those repairs looked great on TV but when it came to actually living in the home they didn’t add any real value for prospective buyers.
Be Careful About What Repairs You Decide to Make!
Some repairs that are usually good to make include: windows that are cracked or missing, a roof with missing shingles, battered aluminum siding, sagging gutters, and patchy and brown landscaping.
Additional repairs that can prove valuable include: damaged floors, dingy bathrooms, a malfunctioning furnace, worn-out kitchen cabinets, a musty smell, peeling paint on the walls.
All of these problems are relatively inexpensive to fix and produce corresponding value in the sales price.
An important factor to consider when deciding whether to make repairs or not is what the surrounding neighborhood looks like.
If the house is the ugliest house on the nicest street then the repairs may prove more profitable than if it is the nicest house on an ugly street.
Tips to Avoid Making a Bad Decision When Repairing a House:
1. Have the home inspected by a professional before you officially buy.
It’s always better to know about problems early rather than be surprised later on.
2. Study the market.
One way to identify whether your house is in a hot market is to work with an experienced local real estate agent, one that knows the area like the back of their hand.
3. Set a budget for repairs.
And then stick with that budget. Know your price range for making any repairs, completing renovation projects, and selling it before you take action.
4. Be smart with your renovations.
That means stick to your budget and focus on renovations that actually boost the value of the home. Don’t get carried away and make a bunch of renovations that won’t actually pay off down the road.
The Final Decision
Deciding between selling house as is and making repairs is ultimately only one that you the homeowner can make.
Just be sure to carefully weigh both sides of the equation.
For example, there are a number of factors that can cause you to lose money instead of make a profit with repairs.
Those factors include: unanticipated expenses, higher taxes, costs associated with holding a property and difficulty selling.
You also have to be able to find buyers who are ready to take action. Every day you hold the property could mean fewer profits for you.
Another Negative That Often Accompanies Repairing a House is Stress
The whole process from finding a contractor to hiring them to dealing with project delays can be filled with stress. You need to have patience and confidence in that you made the right decision.
If you want to avoid the frustrations and potential problems that can come with repairing a fire-damaged house, you can always sell the house as is to We Buy Fire Damaged Houses.
We have built a strong reputation for buying fire damaged houses quickly and for a good price.
Just fill out the form below to learn more and to receive a free, no obligation quote on your home.