My house in a “ratty” neighborhood needs a lot of work (carpets, paint, bathroom and kitchen renovations) in order for me to get my money out of it. However, I can’t afford to have this work done and am disabled, so I can’t do it myself. If I do no repairs and sell “as is”, I’ll lose my equity, but if I get a home improvement loan to pay for the work, the monthly costs plus the mortgage won’t leave me enough to live on. Is there a way to analyze the costs of one strategy versus the other? I’m currently living with my mother rent-free, while doing what I can to clean up the house. But the work the Realtor says has to be done is more than I can handle.
Asked by:Linda W
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Sell it as-is. You never know if your repairs will help the house to sell or not… if you take a loan you can’t afford and then it stays on the market a year, you’ll end up foreclosing and losing all the equity.
Most houses are taking more than 6 months to sell in this market.
Sell it as is. The realtor is trying to make more money for himself. The more it sells for the more he makes…remember that. You should sell it as is and get what you can for it. If you do a loan then the extra money you make will be going to pay off that loan…so what point is there to that?
You could get an estimate from a contractor to do the repairs, then be willing to drop the list price by that estimated amount in order to sell it.
The last answer was right though, if you do the repairs you guarantee the extra expense without a guaranteed sale.
My experience as a broker (20+ years) has always been positive for completing repairs before going on market to get the best price.. as a disabled person, check with your city, there may be some very low interest loans or grants available to assist in the repair your house.. there is also a specialty FHA 203K “property repair” loan that might be helpful… ask your agent for other options- you may be able to get a loan with no payments due in the short time you are on market..
Unless your market is really hot, I’d try to sell it as-is. You could end up costing yourself more money by repairing it, then taking a bigger loss later once it sits on the market & sells for much less than you thought. I know several real estate investors that are looking for deals just like yours.