Many homeowners wonder whether or not they should do perform work to their homes before selling. They hear so much about how certain renovations or touchups reap monetary rewards when it comes time to list the house. What many homeowners don’t realize is that just because you are adding to the house, doesn’t mean it will make you more money when you sell it. See: The Latest Info on Renovating Your Home to Sell.
It is a mistake to think that a potential buyer will assume that the only defects that exist are those that are visible. They will bring in an inspector, which is why you should have the home inspected first, so that you are aware of any problems before they are. It will either give you a chance to fix it without them knowing, or, be able to let them know beforehand so they don’t think you lied. Read: Should You Sell Your House or Renovate it?
There are some instances in which you should fix up before the sale. A example is where is a large variance in the cost of the fix-up, and a potential buyer is likely to over-estimate the cost. Another example is where most potential buyers can only afford a small down payment and aren’t in a position to pay for major repairs. By making the repairs before sale while setting a correspondingly higher price, a buyer is in effect financing the improvement in the mortgage. If a buyer with limited cash had to make the improvements after purchase, the financing costs would be substantially higher.
When the buyer has the financial ability to pay for all needed improvements, they can leave it the way it is. Other cases include situations in which the thing that needs fixing up, is something that the buyer would want specific to their taste, and would have un-done anything you had done anyway.
If a house has significant defects, the smart seller will order her own inspection, and in some cases, solicit estimates of the cost of required fix-ups. This will help in deciding whether the best arrangement is pre-sale fix-up, sale as is, or some combination of the two.
In addition, a seller-ordered inspection will tend to equalize the negotiating power of the two parties. Generally, if there is something wrong with the house, the buyer is going to try to drastically drive down the price. Buyer-ordered inspections are designed, consciously or unconsciously, to provide bargaining ammunition for the buyer by exposing everything that is wrong or might go wrong.