Key takeways:

• Expect to sell for about 10 – 20% below full market value when selling a house that needs repairs
• Selling without making repairs can save you time and effort if you need to get your house sold quickly
• Make strategic decisions about which repairs will provide you the best return on investment

Whether you live in a quiet town or a hot housing market like San Francisco or Boston, it’s critical to do your research before putting a houseon the market that needs repairs. Selling a fixer upper means marketing your property while acknowledging significant maintenance issues, structural problems, or outdated systems. It’s a great option for sellers who need to sell quickly or want to attract cash buyers. 

As a seller, you need to be aware that major structural problems and safety hazards can prevent buyers from accessing traditional financing, especially government-backed loans like VA or FHA loans which have specific property condition requirements. 

Selling with repairs needed vs making repairs before the sale: 

The decision depends on your specific financial situation, timeline, and risk tolerance. Calculate total costs including repairs, carrying expenses, and opportunity costs before choosing your strategy.

How much will you lose selling a house that needs repairs?

Data suggests that the financial impact varies by the severity and type of repairs needed when selling your house. 

You should expect an average price reduction of roughly 10 – 20% when selling your house with needed repairs. 

Many real estate agents recommend that sellers complete basic cosmetic renovations before selling their home, even if the house is in great shape. Painting the exterior of the home or at least one interior room are the most common repairs agents recommend. 

Should you make repairs or sell your house as it is?

With a little research, you should be able to make some educated guesses about whether or not it makes sense for you to spend money on repairs.

1. Calculate total repair costs including materials, labor, permits, and your time investment.
2. Compare this against the expected sale price increase and consider your available timeline. For example, if repairs cost $30,000 but only increase the sale price by $20,000, selling as-is makes financial sense.

Market timing affects this calculation. In hot markets, buyers may overlook repair issues. In slower markets, completed repairs might be necessary to attract offers.

Personal financial situation matters most. If you cannot afford repairs or need to relocate quickly, selling as-is eliminates stress and uncertainty.

Use this decision tree to determine your best strategy:

Make repairs if:

• Total repair cost is less than 80% of expected sale price increase
• You have 3+ months available for renovations
• Local market strongly favors move-in-ready properties
• Repairs address safety issues preventing loan approval

Sell it as it is if:

• Repair costs exceed expected sale price gains
• You need to relocate within 60 days
• You lack funds for quality renovations
• Market has strong investor activity

How to minimize financial losses when selling your fixer-upper

Here are some actionable steps to protect your investment before and during negotiations of sale price

Pre-listing preparation:

• Obtain a professional pre-listing inspection to identify all issues
• Get contractor estimates for major repairs
• Research comparable sales of similar-condition homes
• Consult an attorney about disclosure requirements

While marketing the house to sell:

• Price based on actual repair costs, not emotions
• Provide repair estimates to serious buyers
• Consider offering home warranties
• Be transparent about all known issues

During negotiations of the sale price:

• Set your minimum acceptable price before listing
• Understand buyer financing limitations
• Negotiate repair credits vs. price reductions
• Document all agreements in writing

Consider easy, high-impact repairs to attract buyers

Deep cleaning, decluttering, and basic landscaping improve first impressions without major expense. Focus on improvements under $5,000 that significantly improve buyer perception. These repairs often cost less than the price reduction you’d accept for leaving them undone:

Interior updates ($200-$2,000+):

• Fresh paint throughout (neutral colors) typically costs around $2,000
• Replacing outdated light fixtures usually costs around $200
• New hardware ($300 average) and faucets ($270 average) typically costs around $600
• Deep cleaning carpets or refinishing hardwood floors cost between $182  and $1,888 on average

Safety and functionality ($100-$2,000+):

• Replacing non-functioning smoke detectors around $115
• Repairing loose handrails and steps costs around $2,000 on average
• Fixing obvious plumbing leaks costs anywhere from $100 to $500
• Updating electrical outlets and switches can range in cost, depending on whether you need actual electrical work or are just replacing the plates. If you need to install a new outlet, you should expect to spend around $175/outlet

Curb appeal improvements ($150-$2,000+):

• Landscaping and lawn maintenance typically costs around $300
• Pressure washing exterior surfaces averages about $300 but can vary greatly depending on the size of your home
• Replacing your front door will usually cost about $1,500 for installation and the door itself averages about $300, though more decorative doors can cost thousands of dollars.
• Cleaning or repairing gutters and downspouts will cost anywhere from $167 to $385

Address safety issues that prevent loan approval, such as loose handrails, non-functioning smoke detectors, or obvious electrical hazards. These repairs can expand your buyer pool significantly.

How to finance repairs if you decide to renovate before selling

Home improvement loans offer fixed-rate financing for renovations, though they require good credit and sufficient equity. This is the most common method of financing repairs and renovations to your home. Cash-out refinancing can provide repair funds but extends your mortgage commitment.

Personal loans or credit cards should only be used as a last resort due to high interest rates. Consider whether taking on debt for repairs makes sense if you’re planning to sell immediately afterward.

Home improvement loans:

• Fixed interest rates (typically 6-15%)
• Loan amounts up to $100,000
• 2-7 year repayment terms
• Requires good credit (650+ score)

Cash-out refinancing:

• Access home equity for repairs
• Lower interest rates than personal loans
• Extends mortgage commitment
• Requires sufficient home equity

Avoid these financing options:

• Credit cards (high interest rates)
• Payday loans (predatory terms)
• Borrowing against retirement accounts

How to market your fixer-upper home

Make sure the price is right

Pricing your home competitively is one of the most important factors in successfully marketing a home that needs significant repairs. It’s crucial that you price competitively based on comparable sales of similar-condition properties, not renovated homes. You may be thinking that there’s no harm in trying to get the same price as a renovated home next door. Trust us, overpricing extends market time, ultimately reducing the final sale price. Prices that are too high can also kill buyer interest if the market is slow.

First, research comparable sales in your area:

• Find 3-5 similar homes sold in past 6 months
• Adjust for condition differences
• Consider days on market for each sale

Next, calculate the repair-adjusted price for your home:

• Start with comparable sales average
• Subtract estimated repair costs
• Add 10-20% buffer for negotiations
• Consider market conditions adjustment

Avoid these pricing mistakes:

• Overpricing hoping to “test the market”
• Using online estimates without local adjustments
• Ignoring seasonal market fluctuations
• Emotional pricing based on memories or improvements

Consider offering repair credits or a seller concession

Repair credits are another option to consider when marketing your home. Most buyers overestimate the actual cost of the repairs when shopping for a house. Offering them money back on the purchase or closing costs can help address a buyer’s concerns about the financing or hassle of doing renovations.

Hire a real esate agent or offer your house for sale by owner (FSBO)?

Selling a house that needs repairs is rarely a simple transaction so we do not recommend For Sale By Owner (FSBO) sales for these types of properties. Experienced real estate agents understand disclosure requirements, pricing strategies, and buyer negotiations for distressed properties. Agents also have access to investor networks and can market properties to cash buyers who specialize in fixer-uppers. Look for an agent with experience selling fixer-uppers and distressed properties if possible.

Legal requirements: What you must disclose when selling a house

Mandatory disclosure categories

There are local laws around what a seller must disclose when selling a house, regardless of condition or sale price. If you are selling a house that needs repairs, it’s imperative that you familiarize yourself with local regulations around mandatory disclosures. Most states require sellers to disclose known material defects such as:

Structural issues:

• Foundation cracks or settling
• Load-bearing wall damage
• Roof leaks or structural damage
• Floor sagging or support problems

Plumbing and electrical problems:

• Outdated or dangerous wiring
• Inadequate electrical panels
• Persistent plumbing failures
• Water pressure or drainage issues

Environmental hazards:

• Lead paint (mandatory for pre-1978 homes)
• Asbestos materials
• Underground storage tanks
• Radon gas presence

Water damage and pest issues:

• Previous flooding or water damage
• Mold presence or remediation history
• Termite or pest infestations
• Treatment records and warranties

Building codes and local regulations

Additional disclosure requirements include:

• Unpermitted work – Renovations completed without proper permits
• Code violations – Known safety or building code issues
• Special assessments – Pending municipal improvements
• Zoning restrictions – Property use limitations

Local regulations vary significantly, so consult with a real estate attorney or experienced agent to understand your specific disclosure obligations. Failure to disclose known issues can result in lawsuits and financial penalties after closing.

Frequently asked questions 

Can I sell a house with major foundation issues? 

Yes, but you must disclose known foundation problems and expect significant price reductions. Cash buyers and investors often purchase homes with foundation issues, but financing may be unavailable for buyers using traditional financing.

Do I need permits for repairs before selling? 

You don’t need permits to sell, but unpermitted work must be disclosed. Buyers may request proof of permits for major renovations or negotiate credits for permit acquisition costs.

How do I price a home that needs repairs? 

Obtain contractor estimates for major repairs and subtract these costs from comparable sales of renovated homes. Add a 10-20% buffer for buyer negotiations and unexpected issues.

Will buyers get financing for fixer-uppers? 

Conventional loans require properties to meet habitability standards. FHA 203(k) and VA renovation loans allow financing for repairs, but these programs have additional requirements and processing time.

What happens if I don’t disclose known problems? 

Failure to disclose material defects can result in lawsuits, financial damages, and contract cancellation. Most states have specific penalties for non-disclosure of known issues.

Should I get multiple repair estimates? 

Yes, obtain at least three estimates for major repairs. This provides accurate pricing for buyer negotiations and demonstrates due diligence in your disclosure process.

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