How To Sell A House In Poor Condition Without Overspending

Overspending Pounds

Life… happens. The desire to move house may creep up on us as our goals and situations gradually evolve. But the need to move house may leap at us suddenly as circumstances dictate. It could mean that you have to relocate for work or to be closer to family; it could mean that you are holding an inherited property that is costing you more than you can bear; it could mean that you are facing repossession, need to pay for care, or your financial status has shifted significantly.

There are a million and one reasons to move. But when you are selling a house in poor condition, it seems like your options dwindle down to… between a rock and a hard place relatively quickly. This is especially true when you do not have a large budget with which to make upgrades, improvements and repairs that most traditional (i.e. mortgage-bearing) buyers need to see in order to make a purchase.

When you need to sell fast, you are all too well aware of the cost of making your house ready for conventional buyers. You also feel every creak in every floorboard, hear every drip from a leaking roof or faucet, and see every spot of discolouration and potential mould growth. You also acutely feel every pound as your costs tick up. How in the world can you sell without taking on new and onerous debt, without completely obliterating your savings, without putting your future in jeopardy – and how can you complete a transaction on an accelerated timeline?

First: It is possible.

You do have options. This guide is designed to help those who are concerned about selling a house that is in less than optimal shape and doing so sooner rather than later.

The Challenges of Selling a House in Poor Condition

Even in a ‘hot’ economy where the houses are all but flying off the market, selling a home that has seen better days can be challenging. There are a few key reasons why:

  • Buyers don’t want to purchase your ‘money pit.’ Unless your house catches the eye in just the right way – and the buyer has endless piles of money – chances are that they don’t want to inherit your leaky roof, faulty wiring or dilapidated bath. They will have to expend a great deal of funds in order to get the home up to par, far over and above the purchase price.
  • Your asking price may be unrealistic. But the house two doors down sold for £X; mine is in the same neighbourhood and is the same size. Yes, but that house two doors down may not need a new heating system or require a complete strip down to the studs. It is helpful to compare prices in your area, but remember: it may not be ‘apples to apples.’
  • Traditional buyers often cannot purchase your house. Even if a buyer did want to buy your house and was willing to take on the expense associated with repairs and upgrades, their lender may not be so keen. Homes must pass certain standards before traditional lenders (e.g. Mortgage brokers, banks) will take on the risk of funding the purchase. If the buyer should default, they certainly do not want to be left holding a property that is only going to cost them money.

There may be a score of other reasons why your house is not optimal for a conventional buyer or right for the conventional house sale process. But keep this in mind as you read this guide: you do have options. The key is seeking them out and determining which is right for you and your situation.

Identifying Possible Buyers

The first step to take when you are trying to sell a house that is in poor shape is to identify the types of buyers who are willing and able to make a purchase that is considered risky by traditional buyers and lenders. These include:

  • House Flippers. People who flip houses are looking for deals; the average person may see a falling-down structure while they see potential, possibility… and profit. They have the resources to renovate the home, top to bottom if necessary, and then sell it for as much as they can get.
  • Skilled Do-It-Yourselfers on a Budget. These people may have the funds to buy outright and they are looking for a bargain to stretch their purchasing power. Maybe they love the location or it is near family/work/school, for example, and they have the time and skills to get the house up to snuff. They want to buy into the location and don’t mind undertaking the improvement process in order to get it.
  • Developers. Developers may see the potential to either renovate and rent a property, transition it into a commercial property (if allowed by local regulations), tear it down and build a new structure, or hold it as an investment. They may be able to sit on a property for some time before taking action or re-selling.
  • Cash Buyers. Cash buyers have the financial resources to purchase properties on an accelerated timeline. As with developers, they may renovate and rent, renovate and sell, or hold on to the property to maximise profitability down the road. These are luxuries that the average buyer does not have.

Now, if your property is basically sound – it has ‘good bones,’ so to speak – and a little cosmetic and surface-level work can make it appealing to buyers, you may be able to take a more traditional route, such as listing it with an estate agent or trying a ‘For Sale By Owner’ (FSBO) approach. And you may be able to get a reasonable price.

The more problematic scenario is when your house has significant structural damage. Buyers, and their lenders, will require a survey to determine the extent of the damage and to work out whether or not they want to put their money into it.

But again, and we will keep emphasising this: you do have options, even if your house is in less-than-good shape. These include:

  • Listing with an Estate Agent.
  • FSBO.
  • Auction.
  • Quick Sale Company.

Let’s look at each of these in turn so you can make an informed decision that makes sense for your needs and goals.

Listing with an Estate Agent

Estate agents can be your best friend as you navigate the house sale process, especially if you do not have much experience in this area. Great agents have experience and with this an extensive network of contacts and connections, from potential buyers to contractors to surveyors to financial professionals. And lest you worry about judgment, they have literally seen everything when it comes to houses and properties. The good, the bad and the ugly, if you will.

If you decide to work with an estate agent, be sure to do your homework and select a professional with a sterling reputation and long track record of success. It is particularly helpful if they have a background in selling what other agents might consider ‘unsaleable.’

You will also need to think about estate agent fees. Confirm with them before agreeing to any arrangement and be sure you are comfortable with this. In many cases, the fees are well worth it in terms of the convenience, expertise and support the right agent can bring to the table.

FSBO

The ‘For Sale by Owner’ approach tends to appeal to those who do not want to pay estate agent fees and don’t feel as though they need this middle man involved. It does give you a bit more control over who views the house and allows you to highlight its strengths. There is the possibility of a bit more profit in your pocket, and you can streamline the process if you have a buyer in mind (e.g. A neighbour, a family member, etc.).

However, you face the same risks we’ve mentioned before: that people will not want to buy into a money pit. That lender will not approve financing. That your property will sit with a ‘For Sale’ sign in front of it month after month… after month.

Keep in mind, as well, that you will be solely responsible for every aspect of the process, from viewings to Conveyancing to legal contracts, etc. This can be challenging for those outside the real property industry.

Auction

People tend to think an auction is their only option when selling a house in poor condition. It is not, though it can be a viable one. The range of properties runs the gamut from old to run down to all-but falling down. House auctions tend to attract a wide array of cash buyers.

You can complete a sale within six weeks or so, which is a big improvement over the four to six months (or longer) it can take with a sale through an estate agent. However, you will have to pay auction house fees and you may be left in a position where you must accept the minimum bid.

Quick Sale Company

You may have heard of quick sale companies, also known as ‘We Buy Any House’ companies. But what are they? Typically, it is a group of investors with the funds on hand necessary to complete fast cash sales. When you work with a reputable company, they will extend an offer in principle, often within 24 hours. From there, they instruct surveyors to inspect the property. They will then make a final offer; this may be the same as the initial offer or it may be modified to accommodate for significant structural issues (e.g. a faulty roof, outdated plumbing, unsafe wiring, etc.).

If you decide to continue (you are under no obligation and can choose to walk away at any point), they will proceed towards completion. All in all, this process can take as little as 7 to 21 days. The quick sale company takes on the expense of surveying, solicitors and other essential aspects of the process.

So, while you will typically get an offer of about 80% – 85% of total market value, you do not have to pay for:

  • Estate agent and solicitors’ fees
  • Surveying and conveyancing
  • Energy Performance Certificate (EPC)
  • Staging and boosting kerb appeal
  • Extensive repairs, improvements and upgrades

Selling a house in poor condition is not optimal – but that does not mean you cannot complete a sale and walk away with the cash you need to fund a new down payment, rent a great flat, travel, relocate or otherwise achieve your financial and life goals.

What next?

Selling a house in poor condition without overspending is possible. Not only that, the process can be far more convenient and far less stressful than you ever hoped. To do it successfully:

  • Identify the types of buyers who invest in properties in poor condition
  • Investigate your selling options and choose the right fit for your needs
  • Work with a buyer who has the financial standing to complete a fast sale
  • Ensure that you understand all of your rights and all of the terms of any agreements before you ‘sign on the dotted line,’ so to speak.

The reality is that virtually every house has some value. With realistic expectations and a solid plan, you can stamp ‘Sold’ on this chapter of your life so you can move on – literally and figuratively!

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We are proud to be the most regulated property buyer operating in the ‘Quick House Sale’ industry. We are an active member of the NAPB (National Association Of Property Buyers) and are RICS regulated, which means you can have every confidence of selling your home with us quickly & easily.