Got deferred maintenance? Who doesn’t?! Deferred maintenance won’t keep your house from selling – even if your home is a burned-out husk, there’s a buyer for it…at the right price. A lot of sellers fail to price their homes accurately given the amount of deferred maintenance it has – or other needed modernizations. It could be that you have lime-green shag carpet from the 1970s that is like brand new because it’s in the library which nobody ever used – but the buyer is going to say that it needs new carpet nevertheless because it is “dated” and needs to be replaced. But let’s just say you figure your house needs $100K worth of work to bring it into the same condition as the market average – does that mean you should price your property $100K below the market average? Alas, no – because the buyer is going to have a much more difficult time doing $100K worth of repairs, upgrades, modernization, whatever, to bring it up to the market average – they’ll spend a lot of money, and do a lot of work, to get the “same” home they could have bought with cheaper / easier purchase money – why go through all the risk and hassle just to break even? You need to incentivize buyers to take on the project, and the attendant risks, by giving them a discount over the repair / upgrade cost…but how much of a discount? A good rule of thumb is a 50% discount – so if your home needs $100K worth of work to bring it up to average, you should ask $150K less than average price. In some markets, for some houses, it could easily be that you’d need to reduce it by double the repair cost – so if you feel it needs $100K worth of work, you might need to drop $200K below the average price. Unfortunately there is no firm rule, because every market is different, every home and repair / upgrade scope is different – but in almost all cases, you will need to discount the price something lower than the repair / upgrade cost in order to get it sold. But get it sold you will! There’s a buyer for every home, depending on the price. Get the price right, and you’ll get it sold.
How does Deferred Maintenance Impact Sale Price?
How Much is too Little?
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