After location, condition is the next really critical component of the equation. Buyers look at the details and make decisions based on how much they'll have to put into the house on top of their purchase price.
So, when they see aging HVAC equipment, an older roof, windows which need to be replaced, kitchens which need updating and carpet all over they start to add up $$. Often they'll double, triple or more the cost of those upgrades. And in reality for many there is no other source of cash outside their financing so they can't really buy the house and make all those changes themselves.
Some deferred maintenance can be priced for and some really needs to be addressed in order to safeguard the sale of the home. Once the house becomes a cash only sale, the buyer pool is significantly reduced and the degree to which the sellers can control their outcome is negligible.
A recent conversation with the five remaining heirs of an estate highlighted this issue well. They couldn't come to agreement on how to put the house on the market – whether to make major repairs or just sell As Is. They had holes in the roof, peeling paint, and water damage visible in the house. The misnomer with As Is sales is the family thinks they won't have to do anything so they just put the house on the market in the poor condition, without understanding the cascading effects of that decision.
If there are safefy issues which will cause an appraiser to rate the house condition as poor, then there is an automatic stop at underwriting, who won't approve the loan. Essentially until the conditions are corrected the house doesn't pass and a stalemate can ensue: should the buyer correct the seller's house in order to get the loan through or is that too much risk to assume? Did the buyers even have enough vision to understand what needed to be fixed? Is there enough cash on their side to correct the items?
In this case, the house sale became more of a fire sale to a builder because it could just be torn down. The shortsightedness of the family was that for $25,000 they could have made back 3 times that in the sale price and they would have widened their buyer pool to have families who wanted the school system. The sad part was it was a fine house which many families would be glad to own but it became a tear down to make way for another $2,000,000 home in the area.
Nothing against the larger homes but at some point there's not enough income to sustain whole neighborhoods full of $2,000,000 and above homes so their resale attempts are very difficult. The downstream effects are difficult to manage….
A careful evaluation of the house and what needs to be done with it to make it saleable and get to its widest market of potential buyers. Isn't that what you want as a seller anyway? To get the most money for your home?
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