When it comes time to move, many homeowners face the same big problem. The question is whether to renovate it or sell it as-is. Renovations can increase buyer appeal and increase value, but they also take time, money, and planning.
Although it may be easy to sell your home as-is, you may have concerns about retaining value. The right decision often depends on your finances, schedule, and real estate condition. Whether you’re preparing to list a home in Phoenix, Arizona, or a condo in Boston, Massachusetts, understanding the factors that influence this decision will help you determine the best path forward.
Start with your long-term goals
It helps you think about the big picture before planning any home upgrades. Are you looking to maximize the value of your home, or do you need to sell faster and easier to move on to your next home?
The team at Keystone Custom Homes says, “When deciding whether to renovate or sell a home as-is, homeowners should start by evaluating their long-term goals, lifestyle needs, and budget. If the cost of renovations begins to outgrow what they need in a future home than they can afford, selling as-is may make more sense.”
In other words, it’s not just what you get from upgrading. It’s also important to know whether those costs could affect your next home purchase.
Read>> 8 home improvement projects that will increase the value of your home
When it is reasonable to renovate before selling
In some cases, a few upgrades can dramatically improve the way a buyer views a property. Homes that look modern and well-maintained often attract more interest and stronger offers.
It may be reasonable to renovate before listing in the following cases:
Your house may look outdated, but it’s still functional. Small cosmetic updates can improve first impressions. Upgraded homes nearby sell for even more. You have time to complete improvements before you put your home on the market.
Certain upgrades tend to yield the highest returns when sold.
Fresh interior paint in neutral colors. Updated lighting equipment. New or refinished flooring. Minor updates to the kitchen, including cabinet hardware and countertops. Bathroom refresh including new mirrors, fixtures and vanities.
These improvements can make your home move-in ready without the expense of a complete renovation.
What options are available for financing home upgrades?
Once you’ve determined that upgrades will improve your home’s value and buyer appeal, the next question is often how to finance those updates. Fortunately, there are some common ways homeowners can finance renovations before listing their property.
savings or cash
Using personal savings is the easiest option and allows you to avoid interest and loan fees. For smaller updates, like painting or replacing fixtures, paying out of pocket may be the easiest option.
Home Equity Loan or HELOC
Homeowners with sufficient equity may be able to borrow against it through a home equity loan or home equity line of credit (HELOC). These loans typically offer lower interest rates than personal loans, but are subject to lender approval.
personal loan
Personal loans can help cover small renovation projects that need to be completed quickly. They are often easier to obtain, but the interest rates may be higher.
financing to contractors
Some contractors offer financing plans that allow homeowners to spread the cost of renovations over time. Be sure to review the terms carefully before committing.
Home Improvement Loan or Cash Out Refinance
For larger projects, homeowners can refinance their mortgage or take out a renovation loan to access additional funds.
Renovation work that may not be worth it
Upgrades can increase a home’s value, but major remodeling projects often cost more than homeowners expected. Also, if you plan to move soon, you may not be able to fully recover those costs when you sell.
Projects that may have low returns include:
Fully renovated luxurious kitchen. Luxury bathroom overhaul. Extension of large house. Major landscaping upgrades.
If renovation costs are high or the renovation period is long, it may make more sense to base your decision on financial priorities rather than solely considering potential resale value.
Repairs that should always be considered
Even if you decide to sell your home as-is, it’s worth addressing some issues before listing. Buyers are often nervous when they see signs of neglected maintenance, and problems with home inspections can delay a sale.
Consider fixing issues such as:
Roof leaks and roof shingle damage. Piping leak. Electrical or HVAC issues. Broken windows and doors. Visible water damage.
Addressing these home repairs can give buyers more confidence in the condition of the home and lower the hurdles for subsequent negotiations.
It might be better to sell it as is.
There are many situations where selling your home without remodeling is the most realistic option.
Consider selling as-is if:
I need to move quickly. Renovation costs will exceed your budget. The house requires extensive structural work. An investor or fixer-upper buyer is active in your area.
As Keystone Custom Homes points out, your final choice often depends on whether your current home can realistically meet your goals. “Changing timelines and the type of market will play a role, but ultimately your decision should be based on your purchasing power, your vision for the future, and whether your current home can realistically achieve those priorities, either as-is or after renovations.”
Market conditions also affect
The local housing market can also influence whether it’s better to renovate or sell as-is.
In a seller’s market, where buyer demand is high and inventory is limited, homes often sell quickly, even if they are in need of updates. Buyers may tend to overlook superficial issues.
But in a buyer’s market, updated homes may stand out more. Small improvements like new paint or updated equipment can make your listing even more competitive.
find the right balance
Ultimately, deciding whether to renovate or sell as-is comes down to balancing effort, cost, and profit potential. Some homeowners benefit from making some targeted improvements, while others are better off listing their home as is.
Often the best approach lies somewhere in between. By fixing major issues and making simple cosmetic updates, you can improve your home’s appeal without requiring a complete renovation. As you weigh your options, it can also help you calculate closing costs upfront to understand how renovation costs and sales commissions will impact your bottom line. Working with a real estate agent can also give you valuable insight into local market conditions and help you determine what updates are worth making before listing.
