Your home is in need of repairs, but you have decided to place it on the market – it is worthwhile taking the time to fix it up or should you rather just take a knock on the asking price? RE/MAX of Southern Africa CEO, Adrian Goslett, says that often homeowners find themselves in a situation just like this one and have to make a tough decision. While fixing up a home could result in achieving a much higher price when the property is sold, deciding to fix it up before selling could add months to the time frame.
“There is a good chance that the seller will find a buyer who has been looking for a property with potential and which is slightly more affordable because it is in need of some attention, however, for the most part it is always easier to find a buyer for a home that is in its best condition,” says Goslett. “A visually pleasing home will attract far more attention from potential buyers than one that is not well kept. Generally most sellers will spend some time and money preparing their home for sale by applying a fresh coat of paint and spring cleaning. Many homes may also just need a few easily repairable issues to be sorted out before they are ready to be sold, however to what extent should sellers push the envelope when it comes to repairing their home?”
Fixing a few things here or there is one thing, but what about an entire roof that needs replacing or structural damage? These factors could pose a far more challenging dilemma for would-be sellers. “There will always be a certain degree of repair needed to each home to ensure that it is ready to be sold. While some defects will be fairly easy to spot, others will require far more inspection. Many buyers will ensure that the home has been professionally inspected before they sign the final documents of the sale,” says Goslett. “Ideally sellers should proactively have their home inspected before they put it on the market to ensure they are fully aware of all issues that need to be addressed. The seller is morally obliged to inform their real estate agent and the potential buyer of any known defects.”
According to Goslett, having the home professionally inspected and obtaining a quote for all the defects that need to be repaired will give the homeowner a far clearer idea of whether repairing their home is a better option over lowering the asking price. “If the asking price of the property would decrease by as much as R100 000 or R200 000, but the repairs would only cost around R50 000, then it would be worthwhile taking the time to get the repairs done before going to market,” says Goslett. “However, if the cost of the repairs is R50 000 and the asking price of the property will only change by R50 000, then it would seem feasible to rather put the home on the market sooner and advise potential buyers of the repairs needed.”
Aside from a costing aspect, a lot will also be determined by the seller’s time constraints. “Major repairs take time – a luxury that not all sellers have. In the case where a seller has committed themselves to another property, they may need to sell their current home sooner rather than later,” says Goslett.
He notes that it is also possible that the buyer would actually prefer to take on the repairs as this would give them the opportunity to change certain elements in line with their own personal taste. In a case where the repairs are cosmetic by nature, the buyer may want to make the decisions as to how the repairs are done and what materials are used.
“Regardless of the decision that the seller makes, it is important that both the seller and buyer are fully aware of all the home’s defects and are prepared to agree to the terms and conditions of the contract,” Goslett concludes.