There are two types of buyers — the ambitious DIY-ers and the move-in-ready advocates.
Home improvement shows featuring sensationalized home repairs sometimes make everyday, inexperienced buyers think they can handle fixer-upper homes.
At the same time, there’s still a wide range of people who refuse to attempt a simple paint job. Typical buyers don’t have the expertise or patience necessary to invest in a damaged property.
Fixing up a damaged property is key to appealing to the widest market. Unless your seller is willing to dip well below local market value for an “as-is” damaged home, it’s typically more cost-effective to fix home damages before listing.
Even so, past damages should be disclosed to avoid lawsuits after closing. Should the buyer inquire for a CLUE (comprehensive loss underwriting exchange) report on past insurance claims — or blame new damages on faulty repairs — being upfront about the state of the property circumvents some of the sticky legal situations that sellers might encounter down the line.
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Here are a few simple ways agents have minimized poor first impressions of damaged properties with full disclosures.
1. Be upfront in your listing description.
Attempting to hide past damages from potential buyers is certainly unethical — and it’s also potentially illegal, depending on your state’s listing laws. You’re not necessarily required to include past repairs in your listing description, but being upfront early on may work in your favor.
After all, repairs usually mean higher-quality replacements or new finishings, which impresses the vast majority of house-hunters looking for minimal work after move-in.
Choose your words wisely when writing up your listing description. Minimize the emphasis on damages, assuming they aren’t demolition-worthy, with words like “minimal” and “aesthetic” so buyers are aware of problems that don’t compromise structural integrity.
Surface damages aren’t nearly as scary, and selling a property with such a history shouldn’t be as difficult as one with past structural issues. Even so, listing agents of properties with more serious repairs can attract buyers who appreciate the honesty and are therefore more open to negotiation.
2. Fully list all repairs and renovations.
Don’t be shy when it comes to your listing’s upgrades. The more you can boast, the better.
If the home was outfitted with an older HVAC system that’s been replaced with a state-of-the-art unit, tell the world. If the sellers decided to replace old appliances with new, energy-efficient upgrades, eco-friendly and utility-cost-conscious buyers are your new target market.
Spinning past damages into positives rather than negatives helps entice buyers who are searching specifically for upgraded homes.
A newer roof after hail damage means buyers don’t have to worry about costly replacements in the near future — assuming the weather doesn’t get too extreme. A recently refurbished basement after flooding provides a potential extra living space, assuming the space has been repaired, re-carpeted and freshly painted.
And what buyer doesn’t prefer brand-new granite over laminate countertops?
3. Provide pricing flexibility.
Unfortunately, damaged properties don’t fare well on the open market. If damages aren’t fixed, your listing won’t get top dollar.
Assuming you’re working with a buyer willing to make repairs, encourage them to undergo a pre-listing inspection after all renovations take place. This way, buyers are more comfortable pursuing the property. And they’ll appreciate the forethought of providing them with a legitimate report instead of relying on a stranger’s word.
If you’re working with a seller who is unable or unwilling to repair the home, explain beforehand what visible or current damage will do to the home’s value. Provide comparable property sales nearby, and then appraise the home in its current condition. If sellers see the price difference in black-and-white and are given the opportunity to inquire about the repair costs, they might have a change of heart.