What sort of repairs to real estate agents want you to make on a home before they agree to list it?

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Okay.. here goes. My husband and I bought our home about 3 years ago. I was pretty young (19 and he was 21) at the time and we sort of jumped into buying it without thinking about how much upkeep owning a home would be. We’re not behind on our payments or anything like that and the mortgage isn’t too much ($ 615/mo and apartment rent around here runs around $ 475). The home is an older one, so a lot of stuff is out dated, but I had a family friend who told me real estate agents generally require you to do a lot of fixing up before they’ll agree to list your home.
We would like to own a home again in about 5 years but our home is pretty big and we’d like a smaller one. We’re trying to have a baby and 5 years of not having to maintain a home would allow us to save quite a bit (not having to change air filters, putting rid-x in the septic tank every month, no paying for pest control, etc).
Since the market is still pretty rocky I don’t have unrealistic expectations going into this, and I’m only looking to make what I owe on the home plus closing costs. I just don’t want to spend thousands of dollars tweaking the house up to get it ready to sell.
For those of you who’ve sold your home, or are in the process of selling, what sort of demands were made by the realestate agents, and did you consider just putting the home up for sale by owner to bypass the 6% fee for the agent’s comission?
Also, the house doesnt have much “curb appeal” but not a lot can be done about that. I have a circular gravel driveway (I can not afford to pour concrete or cement). And in my part of AL it rains a lot so not a lot of grass grows in the front yard because my town is sort of a flood area. So the majority of the work to do is inside. Paint, crown molding, the hardwood floors need to be refinished, new fixtures, some areas need some caulking. The only thing we’ve done to the house was buy a brand new air unit (3 years ago) and blown in insulation throughout the entire 2200 square feet of the home). But these things add up and I don’t really have money to do it, and I don’t want to put it on my credit card!
I bought the home from my mother who had it listed at $ 99k three years ago and I bought it for $ 85k, still owe $ 80k on it today). Three years ago the propery appraised for $ 120k but today with the market, i’m not sure
I bought the home from my mother who had it listed at $ 99k three years ago and I bought it for $ 85k, still owe $ 80k on it today). Three years ago the propery appraised for $ 120k but today with the market, i’m not sure

5 Comments
  1. Reply
    My Take on It
    July 17, 2011 at 6:27 pm

    You will not be required to do anything, unless you want to. What your friend missed is that it is in your best interest to make the home presentable to buyers. If you do not want to update or do any major renovations a good idea is to definately paint the interior a neutral color, make sure you clean thoroughly, and do your best to have some curb appeal. If certain rooms or even closets are overflowing with *stuff*, get a storage unit and move that stuff out. Buyers do look in closets to see how much space there is as well as cabinets and such! The only other thing I would say is, price it aggressively so that you will sell quicker.

    I would bypass the FSBO way of doing things. A lot of agents will not even mention your house to their clients because of it.

  2. Reply
    Stacey M
    July 17, 2011 at 7:08 pm

    Repair what you want but be prepared to lower selling price if repairs need done

  3. Reply
    Mary P
    July 17, 2011 at 7:12 pm

    A real estate agent will not require you to make improvements to a home, but the home will have to meet the local building code. If your buyer wishes to have an FHA mortgage, then there will be common things required to make the home salable
    An agent will suggest a price for a home that needs work, and show you comparables for homes similar to yours that are on the market, or recently sold, or expired without being sold. He will have a higher set of figures for you for a home in good condition.
    If you rent a home, the owner will have to provide air filters for you to replace, rid-x for the septic tank, and pest control. It’s not free, so you will pay for it as part of your rent.
    You limit the number of buyers when you try to sell it yourself. If you look at the newspaper or on the internet for homes for sale by real estate companies, other buyers are doing the same. Few buyers have the time to search FSBO’s. A smart buyer knows that if you are not paying 5,6,or 7% commission to an agent, they deduct this amount from their offering price.

  4. Reply
    OldJimmy
    July 17, 2011 at 7:24 pm

    As long as it is clean and tidy no agent is going to refuse the listing. They may offer additional suggestions from their experience. There are some great resources on the web about how to “stage” your home while still living there; just do a search.

    I’ve done the FSBO route once; terrible experience. Next time, found a flat-fee listing agent who did no work other than load to MLS and the rest was on me. Much better, but still had to always be there because no lockbox, had to sit on the deck while it was being shown, and had to work hard to avoid making any verbal representations or guarantees that could come back and bite me.

    That ended up well, but from then on I have used a realtor. I do negotiate the commission rates; we currently have a home listed with a 1% listing commission and 3% sales commission (total 4%). I feel this accurately reflects the proper reward for effort balance since there is little done in the way of marketing these days. I’ve been turned down by some but always find one that will agree to this.

    Realtors also have deeper access to MLS to help with the market analysis and let you establish a reasonable asking price; many of the homes that are sitting on the market are there only because they are overpriced and the seller isn’t being realistic.

    Good luck.

  5. Reply
    bbbbbbbbbbbb
    July 17, 2011 at 7:50 pm

    First, I applaud you for buying a home at such a young age.

    If you bought your home 3 years ago you probably paid more than you will be able to sell it for today. Contact a couple real estate agents and have them do a Comparative Market Analysis and then have them prepare a Seller’s Estimated Costs which will show you how much you will “net” after the sale and paying commissions, mortgage, other closing costs. You may see that you will lose money and have to bring money to closing.

    A savings of $ 140 for renting vs owning does not seem like a big savings. By owning you are able to deduct interest on the loan against your taxes which may make owning much better than renting.

    I would suggest that you keep the home and address any issues in the home room-by-room. Take one weekend a buy a few materials at a time and fix up one room every couple weeks. If you can stick it out in this home for 3-5 more years the real estate market may turn around and you will be able to make a decent profit on the sale of your home.

    I am guessing that you purchased your home for around $ 80,000?
    Most likely you still owe around $ 76000, 5% commission at 80,000 is $ 4000,other closing costs $ 2000… You would need to sell for over $ 82,000 to come close to “breaking even” at closing.

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