Upgrading and making necessary repairs before listing your home can sometimes mean the difference between selling your home at or above your asking price within a few days or selling at a discount after a long period on the market. It all depends on what is happening in your local real estate market and what buyers are looking for in a home. Typically, you will find that outdated homes that need repairs will attract buyers looking for a discount. According to a study by the National Association of Realtors, 25% of homes need severe repairs, and more than half of homeowners surveyed say they don’t have enough money to get items in the house fixed.1 The good news is, if you find yourself in a similar situation, there are solutions! These solutions include home equity loans or lines of credit, personal loans, or pre-home sale renovation companies.
Home Equity Loan or Line of Credit
Utilizing a Home Equity Loan or Line of Credit to update your home before selling can be a strategic financial move. Leveraging the equity you've built in your property allows you to access funds for renovations or repairs without depleting your savings. By strategically investing in renovations that boost curb appeal or address key areas needing improvement, you can enhance the attractiveness of your property to potential buyers. Qualifying for these products typically requires credit score checks, stable income and employment, a good debt-to-income ratio, and sufficient equity. If you decide to take this route, be sure to check with your current mortgage holder and at least two other companies before making a selection.
Personal Loans
Using a personal loan for home repairs or renovations offers certain advantages and drawbacks. On the positive side, personal loans typically provide quick access to funds without requiring collateral, making them convenient for immediate repairs or smaller renovation projects. They often have fixed interest rates and predictable repayment terms, simplifying budgeting. However, the downsides include potentially higher interest rates than secured loans like home equity products, which can increase overall costs. Personal loans also have borrowing limits based on creditworthiness, limiting the amount available for substantial renovations. Additionally, repayment periods are usually shorter than home equity products, potentially leading to higher monthly payments and less flexibility in managing cash flow.
Pre-Home Sale Renovation Companies
Pre-Home Sale Renovation Companies focus on helping homeowners prepare their properties for sale by executing the renovation project. These companies can potentially increase the value of homes through strategic renovations, allowing sellers to secure higher sale prices and sell their homes faster. Another benefit of working with these types of companies is that they typically manage the project from beginning to end and usually get paid when the house sells, making it an excellent option for sellers with limited time and funds. Be aware that this option may be costly. Be sure to work with your local Realtor to learn more about the services available and whether pursuing this route makes sense in your current market.
Prepping your home for sale is an essential first step before selling your home. Your local realtor can help you understand market dynamics and whether this will make sense for your home. If you decide to repair or renovate before selling, the options we discussed may work for you. Exploring options like Home Equity Loans or Lines of Credit offers a strategic advantage by leveraging your property's equity to enhance its appeal. While Personal Loans offer immediate access without collateral, they come with nuances like potentially higher rates and borrowing limitations. Alternatively, partnering with Pre-Home Sale Renovation Companies streamlines the process, aiming for increased home value, yet it's crucial to weigh costs against expected returns. Remember, with the right approach, upgrading your home can pave the way for a quicker sale at a desirable price. If you need more information on the ideas discussed in this article or more customized solutions for your situation, please be sure to reach out to TruSite Realty or set up a free online consultation via Zoom Here
1 Many Homeowners Delay Needed House Repairs. Realtor Magazine. May 9, 2022 Link to Article
After 10+ years of working for multiple Fortune 500 and 1000 companies across Logistics, Finance, and Marketing, Denise made the leap into the Real Estate Industry, hoping to help others achieve their homeownership desires. She can remember purchasing her first home at the age of 23, and it being both a time of joy and stress because she didn't fully understand the process and the implications of owning a home. Since then, she has purchased and sold multiple personal properties, including an investment home that turned from a Rehab to a New Construction project in 2020. She also recently helped her senior parent through the process of downsizing to a more suitable home where they can comfortably age in place. These experiences have inspired Denise's drive to generously impart her ever-growing knowledge to prospective clients, aiming to significantly enhance their journey toward joyful homeownership and a seamless home-selling experience.