How to sell a house that needs repairs in Georgia

Maybe the roof leaks and you don't have the money to replace it. Maybe the inspector's report ended your last deal, and you are back where you started with a longer list.

The worry is giving a buyer a big discount for work that would cost far less to do. What matters is knowing what the work is worth, so you give up no more than you have to.

If the house was a parent's and has sat empty for years, the repairs may not be the only thing in the way. A deed still in a parent's name has its own steps.

Most buyers need a loan, and the loan comes with rules about the house. On an FHA loan, the appraiser lists any repairs the house needs to be safe, secure and sound, and the loan can require them fixed. Many other lenders look for the same kinds of things.

So a house with a failing roof or a soft floor loses a big part of its buyers before anyone thinks about price. Who is left are buyers paying cash, and buyers using a loan that pays for repairs. That smaller group is why these houses sit, and why the price they bring is lower.

Some work costs little and changes how the house looks in the photos, which is where buyers see it first.

Some loans let a buyer borrow the price of the house and the cost of the work in one loan. That opens your house to buyers who could not pay for the repairs up front. These deals take longer to close, because the work has to be bid and checked.

A roof or a foundation is a different matter from paint. Doing it yourself can cost more than it adds to the price. These are the usual ways those houses sell.

If the house was built before 1978, federal law has its own rule on lead paint. You give the buyer a lead warning form and the EPA pamphlet, hand over any lead reports you have, and give the buyer 10 days to test for lead if they want.

For everything else, tell the truth about what you know. Don't paint over a water stain and say nothing. Buyers will have the house inspected, and a problem you hid can cost you far more later than it would have cost to name it. Ask your agent or a real estate lawyer what you need to put in writing.

A buyer who fixes houses works back from the end. Start with what the house would sell for once it is fixed. Take away the cost of the work, then the costs to hold it, sell it and close. What is left is the most the buyer can pay and still be paid for the risk.

Say the house would sell for $300,000 fixed up. The work costs $50,000, and the costs to hold and sell it run $30,000.

Ask each buyer to show you their numbers. Check the fixed-up price against what fixed-up houses near you sold for, and get a repair bid of your own if you can. If an offer is far below the math, ask the buyer to walk you through each number.

If the work is mostly looks, not bones, list it. Paint it, clean it and let the market bid. If you have time and the house is in a part of town buyers want, an agent will likely get you more than a direct buyer will.

A direct sale makes more sense when the repairs are big, the house can't pass a lender's check, or you can't keep paying to hold it while the work gets done.

We can buy a house that needs a new roof, new pipes or more, and do the work ourselves after closing. Before we name a price, we walk the house with you and write down what we see. Then we show you our repair numbers line by line, so you can hold them up against your own bid and the sales near you.