We've broken down the process of selling a lemon into two halves. First, there are the key abstract variables — the real estate market, the competition, and your location. Then you have more concrete concerns stemming from your property (and its potential buyer). So what's in it for you?
So you've got what industry folks call a lemon — a house that could use improvements beyond minor updates and cosmetic repairs. Before selling or fixing your house, you'd do well to take these nine steps, ideally with the help of a real estate agent.
This way, you'll be prepared for all the most likely scenarios.
Factors Beyond The Scope Of Your Home
By "scope of your home," we mean anything having to do with either the interior or the immediate exterior of the house you're trying to sell. What's going on outside the property lines? Maybe the last thing you should do is proceed to sell with no or little awareness of what's happening in their particular neighborhood and with the general real estate market.
1. Estimate The Present State Of Your Real Estate Market
A real estate conglomerate such as Zillow can give you a general idea of the way things are going in your city's real estate market. In a similar way, news headlines may tip you off as to how buyers are likely to perceive the market nationally. But what if you want to go beyond generalities to help sell your home?
Any local real estate agent worth your time will know all the most relevant specifics having to do with the portion of the total real estate market that is relevant to your case. That means they know, for example, what houses nearby are selling for how much—and why. Never be reluctant to ask your real estate agent how they have formed their view of today's market.
2. Evaluate The Condition Of Competing Homes For Sale
Another useful measure one may take before selling a home is to check nearby homes already listed as available. Through a simple series of searches, you should be able to find any one of the dozens of property listing services online. From there, narrow down the results to include only those houses up for sale in your zip code, for instance.
What is the condition of these houses? You may look into such variables as curbside appeal, quality of interior photos, and the condition of the interior which the photos depict. How do these houses compare to yours?
3. Determine The Quality Of Your Location
Rarely does an extended conversation about real estate gloss over the crucial aspect of location. If you've lived in your house for a while, you may already be familiar with the surface-level pros and cons of the neighborhood surrounding it.
If your house is situated far from the nearest power plant, railroad track, and busy street, all the better. A local Clever Partner Agent will know your neighborhood like nobody else's business.
4. Be Aware Of Your Personal Situation
How eager are you to sell this house? It may seem like an obvious thing to consider, but be sure to weigh the perspective of the buyer. Buyer's agents, in particular, often take a more aggressive tone of negotiation the second they sense you may be over-eager to sell.
People sell houses for an amalgamation of reasons. Whether you inherited a property and simply want it gone or are selling a home with a degree of sentimental value, talk it through with an agent you trust so that everyone is on the same page.
Factors Within The Scope Of Your Home
Once you've got a working knowledge of factors which may be out of your control, it's time to get down to brass tacks.
5. Anticipate Buyer Objections
The most time-consuming facet of any home sale can be when you take stock of the property itself. Our focus is how to sell a home in poor condition, so let's counter common buyer objections:
Even the most minute of details can be grounds for an objection. That being said, buyers tend to consider the kitchen and bathrooms key areas for their necessity. Minor remodeling to such features as paint color, lighting, and woodwork within these areas can work wonders for the perceived value of your house.
Of course, it may be the case that your house has flaws which are both obvious and beyond the consideration of immediate repair. Obstacles such as poorly placed walls, faulty electric systems, or flooding basements may not be worth your time and effort to repair, in which case these things should be factored into an initial valuation.
6. Draw Up A Cost-Benefit Analysis
This mathy step proceeds from the work done in the prior step. Once you have a working list of improvements, make a spreadsheet with estimate costs for updates and repairs. Separate improvements you deem absolutely necessary from the rest.
Renovations not necessary to the successful sale of your home can be divided further into categories like "cosmetics," "nice-to-haves," and "too expensive or time-consuming."
7. Target Buyer Personas
For the purposes of this post, three main categories of buyers may want a house that is in poor condition.
Remodelers, those into the idea of a “fixer-upper,” may like the location of your house (or the idea of a "fixer-upper") enough to offset the investment of time and money for repairs. These buyers may ask for compensatory repairs before signing, in which case you and your agent might point them towards the convenience of a renovation loan.
Then there are flippers, whose main objective is to improve and sell the house for a profit. The vultures of the property zoo, this type of buyer almost certainly necessitates a listing agent on your behalf. On the plus side, even a property like a split-level house—notoriously difficult to sell—could represent value to the flipper.
Finally, niche buyers are those for whom some feature of a house is especially valuable. Such features can be anything from a location near facilities like schools, gyms, parks, and place of work; a feature within the home, like an open floor plan or balcony; or even the historic status of a home. Think on whether your house possesses any of these positive traits.
8. List Your Home
If you've already followed these instructions and think you're ready to explore your market in detail, it may not hurt to put your home up for sale. Write up an appealing advertisement, take photos in good lighting, and see what offers fly your way.
9. Find A Quality Real Estate Agent
If you've got a house that's objectively in poor condition, this step is vital to the enterprise of selling it. Connect with a Clever Partner Agent who is both experienced and local is to put yourself in the best possible position to succeed selling a home. Now that you know the outline of what goes into this type of sale, you're better able to recognize the work a good real estate agent can do for you.