Maybe it’s your first house. Maybe it’s a rental property. To you, it’s a fixer upper. But to your neighbors? Homely might be a charitable term. Distressed? In need of repairs? Priced to sell? Those may be a little bit more accurate.
Selling a Fixer Upper House
But if your neighbors think your house is an eyesore, what would a potential buyer think?
Fixer uppers will usually sit on the real estate market much longer than a home in good condition on average. And for many of you, that can certainly be an agreeable amount of time. But there’s that tricky little adjective—average. And a fixer upper house is anything but average. It needs love. It needs attention. And it needs time to look presentable. An expensive amount of time, all of which you might not have right now. Selling your fixer upper house “as is” and fast is definitely possible following today’s guide.
What Exactly is a “Fixer Upper”?
A fixer upper house is a property that usually requires major repair or refurbishment like these 5 major categories:
When categorizing a house as a fixer upper, it typically exhibits significant repair needs that go beyond minor cosmetic issues. Here are some major repair items that can classify a house as a fixer upper:
1. Structural Issues:
- The house has a leaky roof
- Crumbling foundation: The house may have foundation problems, such as cracks or settling, which require professional repairs.
- Outdated electrical system: Fixer uppers often have outdated electrical wiring that needs to be updated to meet safety standards.
- Faulty plumbing: The house may have plumbing issues, such as leaky pipes, clogged drains, or outdated plumbing fixtures that need to be replaced.
3. Outdated or Inadequate Systems:
- HVAC system: A fixer upper may have an outdated or non-functioning heating, ventilation, and air conditioning system that requires replacement or repairs.
- Inadequate insulation: The house may lack proper insulation, leading to energy inefficiency and discomfort.
- Outdated or non-functioning appliances: Fixer uppers often have outdated or broken appliances that need to be replaced.
4. Cosmetic and Interior Issues:
- Peeling paint and wallpaper: The house may have outdated or damaged paint and wallpaper that needs to be stripped and repainted.
- Damaged flooring: Fixer uppers may have worn-out or damaged flooring that requires repair or replacement.
- Outdated fixtures and finishes: The house may have outdated fixtures, such as lighting fixtures, faucets, and hardware, that need to be updated.
5. Exterior Maintenance:
- Overgrown landscaping: The house may have neglected landscaping that needs to be trimmed, pruned, or removed.
- Broken fencing or railings: Fixer uppers may have damaged or broken fencing or railings that need to be repaired or replaced.
- Cracked or uneven pathways: The house may have cracked or uneven walkways or driveways that require repairs.
Your Fixer Upper House Buyer
The average buyer of a fixer upper house isn’t your typical buyer. They’re likely to be first time home buyers with limited credit who are looking to purchase a home as quickly and as cheaply as possible—and a fixer upper house which is for sale by owner can be a perfect solution for all parties.
Lenders will obviously be less apt to loan higher capital to buyers with limited credit. Buyers are less discerning about the overall condition of a home. And sellers can sometimes have the opportunity to set the conditions of a mortgage on their own terms.
Does it sound ideal? It might. But the reality of selling a fixer upper house can be much more difficult than you think.
Do Fixer Upper Houses Actually Sell?
It’s fairly common to find fixer upper houses for sale by their owners as a result of the threat of foreclosure. Most homeowners selling distressed properties think they will incur a loss as a last resort prior to going through the pre-foreclosure process.
Home prices have been rising, so many homeowners can sell their house and can meet the remainder of a mortgage balance and get some money at closing. It takes an estimated 120 days for the foreclosure process in Utah to go into effect.
Some buyers may choose to take out a 203(k) loan (also known as rehab mortgage insurance) which allows them to start work immediately with contractors on restoring the fair market value of a fixer upper home.
How does a 203 (k) Loan Work?
A 203(k) loan, also known as rehab mortgage insurance, is a type of government-insured mortgage that allows borrowers to finance both the purchase or refinance of a home and the cost of its rehabilitation through a single loan. Here are some qualifications and details about how a 203(k) loan works:
- The property must be at least one year old.
- The borrower must meet standard FHA credit qualifications.
- The borrower must have a minimum credit score of 580.
- The borrower must have a debt-to-income ratio of 43% or less.
- The borrower must provide a detailed proposal of the work to be done, including a cost estimate from a licensed contractor.
How it works:
- A portion of the loan proceeds is used to pay the seller or to pay off the existing mortgage if it is a refinance, and the remaining funds are placed in an escrow account and released as the work is completed.
- The loan can be a fixed or adjustable rate mortgage.
- The loan amount is based on the projected value of the property after the rehabilitation is complete.
- The loan can cover up to 110% of the property’s value after the rehabilitation.
- The loan can be used for a variety of repairs, including structural repairs, plumbing, electrical, and HVAC systems, as well as cosmetic improvements such as painting and flooring.
A 203(k) loan can be a great option for homebuyers or homeowners who want to purchase or refinance a fixer upper and finance the cost of repairs into one loan. It can also be a good option for those who want to make significant improvements to their existing home. However, it is important to carefully consider the costs and requirements of a 203(k) loan before applying.
Pros and Cons of Selling Your Fixer Upper FSBO
- Cost Savings
As an investor, I understand that every dollar counts. Opting for FSBO means you can skip the real estate agent’s commission fees, which can be a significant expense. These savings can be directed towards necessary repairs or upgrades to make your fixer-upper house even more appealing to potential buyers like me.
- Direct Communication
When selling FSBO, you’re directly engaging with potential buyers. This allows you to showcase the unique features of your fixer-upper house and address any concerns firsthand. For an investor like me, direct communication provides insights into your property’s potential and allows for personalized negotiation.
- Control Over the Process
FSBO hands you full control over the selling process. You set the listing price, schedule showings, and negotiate terms directly. This level of control can be particularly appealing to someone like me, who’s looking for opportunities to add value to a property.
- Flexibility in Marketing
Selling your fixer-upper house through FSBO gives you the freedom to market it as you see fit. You can create compelling listings, highlight unique features, and showcase your property’s potential to attract investors like me who are on the lookout for hidden gems.
- Limited Exposure
One drawback of FSBO is the potentially limited exposure your property might receive compared to listings handled by real estate agents. While you can use online platforms and social media to market your property, it might not reach as wide an audience as listings in the Multiple Listing Service (MLS).
- Time and Effort
Selling a fixer-upper house requires time and effort, especially when handling the sales process yourself. From creating listings and scheduling showings to negotiating offers and navigating legal paperwork, FSBO demands a significant investment of your time and energy.
- Lack of Professional Expertise
Real estate agents bring professional expertise to the table, from pricing your property strategically to navigating complex legal and financial aspects of the sale. Selling FSBO means you’ll need to educate yourself on these matters or potentially miss out on favorable deals.
- Emotional Attachment
Fixer-upper houses often hold sentimental value, which can lead to emotional attachment and subjective pricing decisions. Investors like me value properties based on potential returns, and emotional pricing might hinder a mutually beneficial deal.
Why Sell to GaryBuysHouses
- Certainty of Sale
One of the most significant advantages of selling your fixer-upper house to me is the assurance of a sale. With a proven track record spanning 12 years, I have a reputation for closing deals efficiently and effectively. This certainty can provide you with peace of mind, knowing that your property will be in reliable hands.
- Quick and Hassle-Free Process
Selling a fixer-upper house can be overwhelming, especially when juggling repairs, showings, and negotiations. Opting to sell to a trusted house buyer like me streamlines the process. I have a dedicated team in place to handle all the details, ensuring a smooth and hassle-free experience for you.
- Fair and Competitive Offers
I understand the value of your fixer-upper house, taking into account its potential after necessary improvements. As an experienced investor, my offers are fair and competitive, reflecting both the current condition and future value of your property. This approach ensures a mutually beneficial deal.
- Flexibility in Condition
Fixer-upper houses often come with their fair share of repairs and upgrades. When selling to me, you won’t need to worry about performing extensive renovations before listing. I’m prepared to assess the property’s current state and provide an offer that considers the necessary improvements.
Criteria for Selling to Me
- Willingness to Consider an Offer
If you’re intrigued by the prospect of a guaranteed sale and a hassle-free process, all it takes is a willingness to entertain an offer that you can request for FREE here. While there’s no obligation to accept, being open to the possibility could be the first step toward a convenient and beneficial transaction.
- Open Communication
For the transaction to proceed smoothly, open and transparent communication is key. I value clear dialogue, allowing us to address any concerns and align expectations throughout the selling process.
- Understanding the Property’s Potential
As an investor, I’m committed to maximizing the potential of fixer-upper houses. If you can envision your property’s transformation and understand its future value, you’re well on your way to meeting the criteria for selling to me.
Wrapping it Up
Selling your fixer-upper house to me, a trusted house buyer with a solid 12-year reputation, could be the solution you’ve been seeking. The certainty of sale, quick process, fair offers, and flexibility in property condition are compelling reasons to explore this option. By meeting the simple criteria of considering an offer, maintaining open communication, and recognizing your property’s potential, you’re positioning yourself for a successful and beneficial transaction.
Remember, the choice is ultimately yours, and I’m here to provide you with a straightforward and stress-free selling experience. If you’re curious about the offer I can extend for your fixer-upper house, don’t hesitate to reach out. Together, we can transform your property into a win-win opportunity.