Should You Fix Up Your House or Sell It As Is?

What Does Selling a Home As Is Mean?

A typical home sale includes a home inspection to uncover any problems with the home's structure or systems. When an inspection uncovers something that needs repair, buyers may negotiate a lower selling price, ask the seller to make the repairs or request a credit to cover the cost.

Selling a home as is means you're not responsible for repairing any issues that pop up after buyers submit their offer. That could range from minor issues like a leak in the roof to major problems like a cracked foundation. As-is homes are often known as fixer-uppers.

Some sellers pay for a home inspection before listing an as-is home and include any problems in the listing so potential buyers know the risks upfront. In other cases, the home inspection might wait until the buyer makes an offer. Either way, when selling a home as is, the seller isn't on the hook for making repairs or providing a credit to the buyer as in a typical home sale.

Even if there's no home inspection, laws in most states require sellers to disclose any known problems with the home. Although laws vary from state to state, you typically have to disclose problems with roofs, foundations and major home systems, as well as the presence of water damage, pests or lead-based paint.

When Might You Sell Your Home As Is

There are several situations when it may make sense to sell a home as is.

• You don't have the budget to complete repairs. Home repairs are costly. A full HVAC replacement costs between $5,000 and $10,000, while replacing a roof runs from $5,000 to $12,000, according to HomeAdvisor.
• Your home is already in good condition. If the home's structure and major systems are in good shape, your only decision is whether to update it. A real estate agent can advise if this is likely to increase its value. Many buyers prefer to update a home to their own tastes.
• You need to sell the house quickly. Listing a home as is gets it on the market right away. Did you inherit a home from your parents? You may just want to move on rather than deal with the emotions of updating your childhood home. Are you transferring out of state? You might need to speed up your home sale to buy a new home.
• You want to take advantage of a seller's market. A seller's market means there are more buyers than homes for sale. When homes are at a premium, buyers are more willing to overlook problems with a property. If you take time to fix up the home, the market could cool off, decreasing your home's value. Despite rising interest rates, the U.S. remains a seller's market. In June 2022, 55% of homes sold for over the list price, according to Redfin.
• You want a cash offer. Most homebuyers need a mortgage loan to pay for a house, but some can pay cash. All-cash offers are on the rise: In the first half of 2021, almost one-third of home purchases were cash transactions, according to a survey by HomeLight. Mortgage approval and funding can take up to two months, while cash sales can be completed within days.
• You're willing to accept a lower price. As-is homes appeal to house flippers, investors or homebuyers on a budget. In return for accepting the home as is, however, buyers generally insist on a bargain price. Even in a seller's market, expect to get less for an as-is home than a traditional home sale.

When to Fix Up Your Home Before Selling It

Fixing up a home before selling it can boost the sale price, balancing out the cost of repairs. Here are some scenarios where you might want to make repairs or upgrades before selling.

• You want to maximize the purchase price. Eight in 10 Americans would choose a home that's move-in ready over one that needs updating, according to data from Coldwell Banker. Making repairs or replacing outdated systems can garner a higher price for your home. Enhancing your home's curb appeal can help too—and doesn't have to cost a lot. Keeping your lawn fertilized, trimmed and free of weeds costs about $340 and delivers a 539% return on investment (ROI), according to data from HomeLight. An exterior paint job, which costs an average of $3,061, can add more than $7,500 to your home's resale value; making your front porch more inviting can add $6,000 in resale value.
• Your home has major issues that could make it unappealing to buyers. Nearly half (44%) of recent homebuyers said they steered clear of homes needing renovations, plumbing repairs or electrical repairs. Fixing such problems can attract more potential buyers.
• Your home has safety or structural issues that could hinder getting a mortgage. Mortgage lenders typically require home inspections to make sure that a home meets minimum property requirements (MPRs) for livability. For example, FHA mortgage loans require the home to be structurally sound and safe for habitation. If your home doesn't meet MPRs, you may have to make repairs to sell it unless you can find a cash buyer.
• You're selling in a buyer's market. A buyer's market means there are more homes for sale than people who want to buy them. Buyers have the upper hand and can take their pick of homes. Move-in-ready homes with curb appeal attract more buyers, giving you more options for selling your home.
• You have the time and budget to complete repairs and think it will ultimately be cost-effective. An experienced real estate agent can advise you whether repairs make financial sense and what changes will deliver the biggest bang for your buck.

The Bottom Line

Only you can decide if repairing your home or selling it as is makes sense financially. If you choose to make repairs, you can pay for them using savings, credit cards or a personal loan. However, if you're planning to buy a new home, consider the effect a personal loan or high credit card balance may have on your credit.

As you prepare to move on to your next home, check your credit report and credit score and get your credit in good shape before you shop for a mortgage. Doing so can help you qualify for a lower-interest loan, saving tens of thousands of dollars.