Selling a property can be a minefield of tough decisions, lots of stress and a hope for the best price possible. For many considering listing their home for sale, the inevitable question of whether to renovate or sell “as is” is likely to arise.
Do you spend money on upgrading the property in the hope it drives up the value? Or do you sell it as is, leaving new owners to cultivate the home in their own vision?
Much depends on the level of renovations you are considering. A new bathroom may cost £15,000 or more but might only add £10,000 to the house value; likewise, failing to upgrade vital features could see you fail to get a price you deem fair for the property.
In short, whether you renovate or sell your house in its current condition is up to you and your aspirations. If you want to sell your house fast, you might be better off selling it as is. That way, you can approach a cash house buyer and have your property sold in a matter of days. If you have plenty of time on your hands and the budget to upgrade, it might be worth renovating the house.
In this blog, we look at when you should consider renovating your home or whether selling as is might be the best option.
What to consider before deciding to renovate
Before you commit to renovating the house, it’s worth considering a few things before you get started.
Overall property condition
When deciding to renovate before selling, assess the property’s condition. If there are just a few minor faults, you could probably leave it as is and still get close to your asking price. If the property is in complete disrepair, on the other hand, you may want to consider renovation, especially if you want to sell it for the same price or more than you paid for it.
Available funds
Another thing to consider pre-renovation is the budget. Moving house is not cheap, and if you plan to spend significant sums on upgrading this property to help fund the purchase of another one, you’ll need to see if your budget stretches far enough. Renovations can be expensive, and the funds being used to upgrade the home may be better spent on the move rather than the sale.
Think about how much you could spend on renovation and how much the moving process will cost. Then look at the potential uplift from the renovation. If you don’t stand to be in a positive position after these costs are taken into account, it might not be worth it.
Who are you selling to?
Your target market also plays a part in whether you should renovate or sell as is. If selling to a cash house buyer for a speedy sale, renovation isn’t necessary. These buyers are often sourcing properties to flip and have funds available to buy the home immediately. They will then conduct any renovations and sell the house for a profit.
If, though, you are looking to sell through a traditional estate agent, you might need your house to be ready for the new buyers to move right in. And this could mean renovations. You might still sell without making any improvements, but the chances of securing a sale or reaching your asking price are slim.
What are the advantages of renovating before a sale?
There are several advantages to renovating your house before selling it. These include:
Appealing to more buyers
With a house looking aesthetically pleasing, buyers are more likely to take an interest in it. With more interested parties, the chances of a bidding war increase, potentially seeing you earn more from the sale than expected.
Fast sale
Despite selling through a cash house buyer generating the quickest sale, it doesn’t always deliver the most value. Renovating your house, then choosing to sell via a traditional estate agent, may result in a much faster sale than if you sell with an agent and leave the house as is. This is because many looking to buy a home (especially first-time buyers) want something ready to go and that requires minimal work.
Higher selling price
Depending on the renovations you do, you could see significant value added to the home. It’s been reported that a new kitchen could add 10% to the value of your house, and that a new bathroom may see a 5% increase. If this price change exceeds the amount you spent on the renovations (which it should), then you’ve basically renovated for free and pocketed some cash at the same time.
Disadvantages of renovating before you sell
As with anything that has advantages, there are always disadvantages too. Renovating your house before selling has a few things to be wary of:
Slower sale
Deciding to renovate can significantly slow down the sales timeline. If a fast sale is your aim, renovation may not be ideal. Certain work can take weeks to complete, and if you have already listed your house for sale before any work has started, you could be wasting your time. Your stalling on the sale could break the chain and mean that you lose out on the property you had your eyes on. It’s best to renovate first and then list the home for sale afterwards. If you need a speedy sale, though, selling through a cash house buyer can still help you stick to your ideal timeline.
Expense
Renovations can be expensive, and whilst they may drive the value of the property upwards, that increase may not be enough to offset the money spent on renovating. Furthermore, if buyers are trying to haggle, and you can only get a sale by reducing your asking price, you could find yourself having spent all that cash for no financial benefit at all. You should also consider whether it is actually feasible. The cost of a new, mid-range kitchen, for example, is around £10,000-£25,000, and despite finance being available, the extra monthly cost could be eating into the budget for your next house purchase.
Putting too much of your mark on the home
Some renovations are generic, and some speak volumes about your character. If you put too much of your identity into the property through renovation, you may struggle to find buyers.
Reduced number of buyers
Renovating a home isn’t cheap, and to recoup some of that cash, you may have to raise the asking price of your home. This could see the number of potential buyers reduced, as not only will those looking to buy a “ready to go” property hold back from making an offer, but those who want to fix up the home and make it their own will step back too.
Advantages of selling as is
Selling “as is” also comes with plenty of advantages. We’ve listed a few below.
Quicker sale
By selling your property as is, you can secure a quick sale, especially if selling through a we buy any house company. You can even sell fast via traditional estate agents, as many people are happy to snap up a property and renovate it to their vision. Renovation takes time, and time in property sales is crucial. Deciding to renovate could mean that you miss a golden sales opportunity.
Money saving
There is no guarantee that your spending on renovations will deliver a significant return on investment. You could install a new bathroom, lay new carpets or build an extension, and neither may see the uptick in value you expected. Leaving the home as is may still achieve market value for your property type, without spending the cash to do so.
Stress-free sale
Renovations can cause delays, and in property sales, delays bring stress. They can reset the entire sales process, making your property spend longer on the market before you can proceed with a sale.
Disadvantages of selling as is
Selling as is may also have some disadvantages. These could include:
Limited buyers
Depending on the condition of your home, you could find that deciding not to renovate puts people off. This could mean that you are stuck with a very limited buyer pool.
Low sales price
Again, much depends on the condition of the property. If only a small number of renovations are required, the price may not be affected much. If, on the other hand, there are substantial issues that could have been improved, you may only secure a sale if you reduce your price.
Higher risk of sales falling through
Selling a home as is can be risky. Buyers may be enamoured by the property and make an offer on it. It’s only once a survey has been conducted that they realise the extent of the work at hand. This then leads them to withdraw their offer, leaving you back at square one.
