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Repair or drop the asking price?

You have decided to sell your property but have found out that the roof needs to be replaced. Do you repair the roof or drop the asking price?
 
While it may not necessarily be the roof that needs repairing, many homeowners may find themselves in similar situations and need to decide between taking on the repairs themselves, or telling potential buyers and hoping they can still sell their home for a reasonable, market-related price, says Adrian Goslett, CEO of RE/MAX of Southern Africa.
 
“It goes without saying that it is far easier to sell a property that is in tip top condition and which is visually pleasing,” says Goslett. “When wanting to sell their home, sellers will generally need to spend a bit of time and money on preparing the home and ensuring that the cosmetics of the property are up to standard. These preparations will normally include a fresh coat of paint and perhaps some spring cleaning. Often it may also require that some easily fixed defects are repaired and that everything is in working order. However to what extent do sellers need to repair their home before placing it on the market?”
 
Goslett notes that structural defects that are costly to fix, such as replacing the roof, pose a challenge to homeowners when deciding to sell.  “Every home is likely to have its fair share of defects, some of which will be obvious to spot, while others could be hidden. Sellers are mistaken if they think that potential buyers will assume that the only defects in the home are the ones they can see. In fact, more often than not, serious buyers will have the property inspected by a professional company before signing on the bottom line,” he says. “There are very few buyers who will purchase a home with the assumption that everything that is not visible must be in working order.”
 
According to Goslett, ideally homeowners should have the home inspected before they put it on the market so that they are aware of any issues or structural defects that need to be addressed. Sellers are morally obliged to inform the estate agent marketing their property and/or the seller, of any known defects. Once the property has been inspected and a quote obtained for any necessary repairs, homeowners need to ask themselves whether they will come out better by repairing the defects or dropping their asking price.
 
He notes that if the defects cost R50 000 to repair, but it results in the seller getting their asking price rather than dropping it by R100 000 or more, the repair is well worth it. However, if the sale price of the property is not really affected by the repairs, then the homeowner will have to base their decision on that fact. The outcome will depend on the circumstances and the repairs that need to be undertaken.
Goslett says that a compelling circumstance for the seller to take on the repairs is where an interested buyer has the capacity to put down a small deposit, but will not be able to finance any major repairs to the home after purchase. “In this way, the seller will be securing the sale of the home,” says Goslett.
 
He points out that the downside for the seller to fix repairs is that often major repairs will take a lot of time, which will delay the whole process of selling the property. This may not be an issue for sellers who are not in any particular rush, but it may be a massive issue for sellers who have committed to another property and need their home sold as quickly as possible.
 
Another instance in which it may be better for the buyer to do the repairs or changes is when the fix could be a matter of taste, such as the colour of tiles used or design of the deck. If repairs or cosmetic enhancements could be done in a variety of different ways, the buyer may want the option to be able to do it the way they want it.
 
“Ideally both the seller and buyer should have the property inspected independently to ensure that they fully aware of all defects before entering into the negotiation process. Whether repairing defects before the sale or not, the crux of the matter is that all parties involved in the sale are happy and agree to the terms and conditions before any contracts are signed,” Goslett concludes.


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