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DEFERRED MAINTENANCE WILL COST YOU DEARLY

By
Real Estate Agent with CB Valley Broker

 

Deferred Maintenance will cost you dearly!

You want to sell your home. Your agent prices it according to the market. But she also probably tells you that there are a lot of things to fix. A few window seals have broken and the windows are fogged. Dry rot is visible. The roof needs repairs if not renewal.

Oh, that, you might think, that is nothing, I am living with it for so long, what could it be?

It will be a LOT, in lost value that is. All the repairs you have not done over the years, the deferred maintenance, the cost for the new roof you put off, all that severely diminishes the value of your home and a buyer will take a much bigger discount from you with a low offer than it would have cost to keep the house up over the years.

In a recent transaction the accepted offer was 12% under the asking price. The amount the seller had to give to sell the house in as is condition was (after the repairs were priced) 8% more than what the repairs actually amounted to.

In this case that was $20000 just because the work was not done.

I highly recommend to keep up the house. Inspect it yourself from time to time and before you sell have a professional inspection done.

The cost of performing repairs yourself or pay for them before listing will be much less than an offer according to current condition PLUS repairs.

 

Comments (8)

Larry Bettag
Cherry Creek Mortgage Illinois Residential Mortgage License LMB #0005759 Cherry Creek Mortgage NMLS #: 3001 - Saint Charles, IL
Vice-President of National Production

These are great words....the bottom line is a little here and there is so much better than taking a massive hit like this!  Great words!

May 25, 2012 08:35 AM
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

What I find so discouraging is the number of homes that are priced to market with no consideration of poor condition, which is of course, deferred maintenance.

So, the house is priced based on comps.  What's missing is that the comps represent what SOLD, not what didn't sell.  The homes that didn't sell were in the same condition as the home being listed.

Oh well.

May 25, 2012 08:50 AM
Annette Sievert
CB Valley Broker - Corvallis, OR
Corvallis, Oregon

Thanks Larry, spread it !

That is poor market analysis. When I do a CMA I adjust for condition, easy enough, after a while in this business one should know how much rougly the updates and repairs are... But I feel your pain, Lenn

May 25, 2012 09:10 AM
John Pusa
Glendale, CA

Annette - Thank you for sharing detailed quality information on deferred maintenance will cost you dearly.

May 25, 2012 10:53 AM
Annette Sievert
CB Valley Broker - Corvallis, OR
Corvallis, Oregon

John, welcome, I am happy to enable you to collect points ;-)

May 25, 2012 11:01 AM
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

Hi Annette,

Excellent post..Lenn has a valid point about the number of homes that are priced to market with no consideration of poor condition, which is of course, deferred maintenance.

Jul 12, 2012 11:56 AM
Patricia Kennedy
RLAH@Properties - Washington, DC
Home in the Capital

Annette, I really think that buyers always greatly overestimate what it will take to make repairs.  It's better for the seller just to step up.

Jul 12, 2012 12:07 PM
Annette Sievert
CB Valley Broker - Corvallis, OR
Corvallis, Oregon

yes Dorie, will come back to haunt the seller...

that is so true, Patricia, taking care of things upfront is often so much cheaper!

Jul 18, 2012 03:02 PM