How To Attract Buyers to a Fixer-Upper
Most property sellers have a reasonably good idea of what’s involved in putting their home on the market. The concept of needing to prepare a house for sale is now commonly understood. This typically involves decluttering and depersonalising the space, repairing obvious building defects, decorating for a mainstream audience and paying particular attention to kerb appeal.
But, what if the property is not in great condition?
Houses that are in need of updating are known as ‘fixer-uppers’ or ‘doer-uppers’. It’s a somewhat woolly term that ranges from properties that are crying out for a cosmetic upgrade all the way through to homes that have serious structural defects. Selling these kinds of homes through traditional estate agency channels requires a slightly different approach than marketing a well-maintained property – and the seller is certain to need professional guidance from an experienced agent to achieve the best possible sale.
Thinking that a property won’t sell in its neglected state may be an easy conclusion for a seller to reach, but even the most run-down houses eventually find a buyer. A fixer-upper has clear market potential if the main factors – property location, target audience and asking price – are optimally aligned.
Who buys fixer-uppers?
Knowing the target market is vital for selling a property that is in need of work. Forget about home buyers who are looking to move straight in with minimal inconvenience and instead focus on a small but important sub-section of buyers who are actively seeking out homes that need refurbishing. Broadly, these fall into three types of buyers:
- House Flippers buy low-priced houses, renovate them and quickly sell them on at a profit. Finding a house that needs work is a dream project for them, but they will be looking for bargain-basement prices.
- Deal Hunters have their eyes set on a property in the right location and accept that repair work needs to be done. Buying a fixer-upper allows them to get into the area at a lower price, with extra budget available to carry out the necessary work.
- Remodellers are top-class buyers who are looking for a renovation project that they can stamp their personality on. They may have a clear idea of what their dream home should be and, once they find the right place, they have the budget to make it a reality.
Repair or declare property defects?
Preparing a run-down house for sale requires a different approach than if the property is presented in A1 condition. That said, decluttering and depersonalising the space is always a good idea as it helps prospective buyers to see the potential of the building. What’s more, the right kerb appeal can make a powerful first impression, too. With that in mind, it’s well worth carrying out minor repair jobs and spruce-ups in the house and garden that don’t cost a fortune.
However, if the house is to be marketed as a fixer-upper, major works should be left for the next buyer to worry about. Rather than spending large sums on roof repairs, damp or timber decay, window replacements and other big ticket items, it’s better to be upfront about the fact that the property requires refurbishment and let the buyer’s surveyor identify what the issues are. Sellers must be strongly advised against any temptation to cover up major defects or not declare building defects when asked – honesty is always the best policy.
Nor is it necessarily a good idea to revamp highly personal areas in the home such as kitchens and bathrooms. Time and again, sellers choose to replace their kitchens in the hope of achieving a better sale price, only to find that this doesn’t generate a great return on their investment. Worse still, they may see their new kitchen in the skip when they drive past the house post-sale, which will have made the endeavour a waste of time, money and resources all round.
What is a realistic asking price for a fixer-upper?
Clearly, a house that needs major repairs is going to have a lower market value than comparable properties in tip top condition. But how much less? This largely depends on the severity of the problem.
The seller should be advised to take stock of what the major defects are and compile a list of vital repairs that would be needed to restore the building to a good state of repair. This will inform the estate agent’s valuation of the property ‘as is’. Bear in mind that if the building is affected by subsidence issues, either past or present, the mortgageability of the property may be called into question, which in turn may limit the target audience to cash buyers only and depress the market price.
Location is a key factor for any property valuation, and fixer-uppers are no different. A run-down house in a prime residential location may prove to be a very attractive proposition for buyers actively looking for fixer-uppers, especially in a neighbourhood where demand outweighs the supply of homes for sale. The price discount compared to well-maintained homes in the locality may in fact be surprisingly small.
The agent’s market appraisal and asking price recommendation will also take into account the seller’s personal circumstances and preferred timescale for the property sale.
Is an estate agent the best way to sell a fixer-upper?
Despite the fact that properties in need of refurbishment are targeting a niche audience of buyers, the open market is still the best place to achieve a good sale outcome. Alternative sales channels such as house buying companies or sale by auction may generate a quicker disposal of the property but the net sale proceeds will be substantially lower.
The reality is that most interested buyers of fixer-uppers will be looking in all the usual places including local high street estate agents and online portals. With an experienced estate agent acting on the seller’s behalf, there is no reason whatsoever to doubt that a successful result can be obtained at a good price.