Selling a house to renovate: practical advice
Selling a house in need of renovation can seem a daunting task. Between the work involved, setting a realistic price and negotiating with buyers, it's normal to have questions. Should you renovate the house before selling, or leave it as is? How do you attract the right potential buyers?
Here's our advice on how to effectively sell your home in need of renovation.
SUMMARY
Should you renovate your house before selling?
6 practical tips to sell a house to renovate
1. Assess what renovations are necessary
2. Target the right buyers
3. Set a realistic selling price
4. Highlight the property strengths
5. Be transparent with buyers
6. Working with an experienced real estate
Should you renovate your house before selling?
The answer depends on several factors.
A recently renovated house tends to sell more quickly. However, some buyers are specifically looking for a property to renovate in order to personalize it or make it a profitable investment.
Another point to consider is the market. In a context where properties stay on the market for a long time, a house in need of renovation could be even harder to sell. Carrying out some work can make you more competitive.
At the same time, you need to consider the profitability of the work. Some renovations increase the value of the property more than others.
Finally, ask yourself whether you have the time and budget to undertake these renovations. If not, you'll need to adapt your approach to maximize your chances of selling your house in need of renovation.
6 practical tips to sell a house to renovate
1. Assess what renovations are necessary
Before you put your home in need of renovation on the market, identify precisely what work needs to be done, how extensive it will be and how much it will cost. The more concrete an idea you have of the renovations required, the better positioned you'll be to justify the selling price to potential buyers.
Carry out a home inspection
Hire a building inspector to inspect your house and provide you with a detailed report of the structural and technical problems. The report may reveal work that you had not anticipated or clarify problems that you were already aware of.
For example, even if you already knew that the plumbing system needed to be redone, the inspector's report will detail the condition of the system precisely and give you a clear idea of what the work will entail.
Estimate the cost of renovations to be planned
Once the inspection is done, it is useful to request quotes from professionals. You can provide the quotes to potential buyers, as well as the inspection report, to give them an accurate picture of the condition of the property. In addition, this helps justify the selling price and facilitates negotiations.
2. Target the right buyers
A house in need of renovation will not attract the same type of buyers as a turnkey property. Unless your house requires major work, it will attract handymen who are looking for an affordable home that they can renovate to their taste.
Your marketing strategy will therefore have to be adapted according to the buyer you are targeting to sell your house for renovation.
For example, the description of the real estate ad might mention that the property is ideal for handymen. There are platforms and communities for DIY buyers.
A real estate broker has the knowledge and tools to help you target the right buyers
3. Set a realistic selling price
A house to be renovated certainly doesn't have the same market value as a turnkey property of similar size and located in the same neighbourhood. The price must take into account that buyers will have to invest time and money in renovations.
In order to establish the right selling price for your house to renovate, you should have it appraised by a professional, such as a real estate broker. They are trained to be able to define a realistic selling price based on the market and the condition of the property.
4. Highlight the property strengths
Even if your property needs renovations, it certainly has strengths that can appeal to buyers.
Clean and declutter
Present your home at its best. Keep it clean and decluttered. A fresh coat of paint is an inexpensive way to refresh your rooms.
Without pretending your home is flawless, highlight its assets. A cathedral ceiling and lots of natural light? An open-plan kitchen with a beautiful island? A large, intimate backyard with no neighbours?
Highlight the house potential
You can also highlight the house's potential, beyond the work itself. Offer sketches or floor plans to help buyers imagine the possibilities.
For example, if the kitchen is to be remodeled, have a sketch made of the room after renovation to help them envision the future.
5. Be transparent with buyers
Be transparent with potential buyers. Make sure you build a relationship of trust to facilitate the process.
For all sales of real estate, you are required to complete the declaration by the seller, a mandatory document that paints a picture of the condition of the property. This is where you disclose everything you know about the property to the best of your knowledge.
Provide any key information on the condition of the property. The inspection report and the quotes for the work to be done are practical documents for people interested in your house to renovate.
By providing as much information as possible to buyers, you reduce their uncertainties and protect yourself against potential disputes
In the same sense, show that you are open to negotiation. This does not necessarily mean a price reduction. It is rather to show that you are ready to negotiate certain conditions in order to ensure a successful transaction for all.
6. Work with an experienced real estate broker
A real estate broker is the best person to help you successfully sell your home in need of renovation. Whether it is for evaluating the price at which to list the property, to stage it, or to answer your questions, he will be able to put in place a suitable strategy to find the right buyer and close the sale with the best possible conditions for all parties involved.
