Should you fix up your house before selling it or not?

What's better: selling a fixer-upper or a move-in ready house?

A lot of real estate experts and residential property agents suggest that conducting minor repairs and upgrades before putting the house on the market will increase its value, provide the reasons to increase the price, as well as boost the chances of the house being sold for the requested price within the reasonable time frame. But, the owners of dated homes and properties need remodeling attention often struggle to decide whether investing their real-time money into upgrading the house they’re about to sell is a worthy commitment.

Which alterations and upgrades are the best ones to undertake before placing the house on the market? Will those quick fixes and costly remodels pay off as they expect? Will the selling price of the house cover the repairing expenses? Can they afford financing the services of remodeling contractors and materials knowing that they won’t get their money back at least for another few months? Is upgrading the house worth the effort when most homebuyers redo the houses they purchase to make them feel their own anyways? Maybe, leaving the property in its current condition and pass the right to conduct further alterations to the next owner is the best solution? Those are the main questions the homeowners sell when approaching the market placement.

The downside of selling a fixer-upper is that you can’t help but list them for less. And, even if the selling price is already quite low, each buyer will attempt negotiating and bringing it down. Then, there’s that painful appraisal process, which may ruin the deal after you reach a compromise price with the buyer. The bank inspector may justify a lower appraisal by appealing to the house’s conditions, which don’t conform to the value of other equally priced homes. That appraisal will prevent the bank from approving the sum of the mortgage, forcing you to lower the price or cancel the deal and look for another buyer.

But if you update the cosmetic finish of your home and conduct a number of cost-effective repairs, you may find yourself adding a substantial amount of money to the price. Your listing agent may help you figure out which improvements will make your home look better and boost its value. For instance, if you have a spacious downstairs area, building a closet and turning a 3-bedroom home into a 4-bedroom one will allow you to increase the sales price by $10K-$30K depending on the location. Obviously, the alterations will cost way less than that.

At the same time, conducting alterations before selling the property is quite risky. On the one hand, you want to make your house look appealing to the prospective buyers and boost its value by introducing different cost-effective improvements. On the other hand, you can’t predict how certain buyers will react to the finished product. If the style of a brand-new kitchen you’ve just installed won’t meet their taste, they probably won’t agree to pay a higher price for that. But, if you make the ‘move-in ready’ home look too neutral and faceless, no buyer will fall in love with your house hard enough to buy it.

The bottom line is that you'll have to tailor your decision to the specifics of your situation and the state of your house, and if you decide to remodel, make it as cost-effective as possible.

How to decide if it’s worth the investment?

Undoubtedly, the answers to most of the questions above depend on individual’s financial situation, the overall state of the house, the homeowner’s pricing goal, local market overviews and behavior trends of local buyers. The time factor plays a huge role as well. However, the main thing to look up when making the final decision regarding this matter is the difference in local prices for move-in ready properties and fixer-uppers. Obviously, you need to compare the prices for similar homes, preferably in your neighborhood.

After such a brief market research, you need to consult with your agent to determine which repairs will increase the value of your home and make it look more attractive to the prospective buyer. If painting the walls, replacing the carpet, refinishing kitchen cabinets to make them look more modern and hire house cleaners to polish the place is the minimum that will help you achieve the aforementioned goal, you should proceed and contact a couple of remodeling contractors to ask them for estimates. Most of them provide job estimates for free, so you won’t have to spend any money at this point.

If the estimated costs of pre-selling repairs don’t exceed the difference in prices for move-in ready homes in fixer-uppers, but make the repairs look quite profitable, you may give it a shot. The competition (the prices and the value of the houses listed in your local area) should be taken into consideration too.

Helen Sheplyakova, a passionate blogger writing about social issues, home improvement, lifestyle and sharing her inspirations with people.