You’ve inherited a home, and it needs some work. The carpet is worn. The kitchen hasn’t changed in years. Someone in the family thinks you should remodel before selling. Someone else wants to sell it just as it is.
Before you start hiring contractors, ask one question: How much of that money are you likely to get back?
Fixing up a home can help it sell. But a higher selling price doesn’t automatically leave you with more money. You also have to account for the work, the time it takes, and the bills you’ll pay while you still own the property.
Start with what actually needs attention
An outdated kitchen and a leaking roof are different problems.
The kitchen may still work perfectly well. A buyer might be happy to use it for a few years or prefer to choose their own cabinets and countertops. A roof leak needs to be evaluated because waiting could cause more damage.
Before deciding what to spend, get a clear picture of the home’s condition. For expensive problems, written estimates are more useful than guesses.
Then look at nearby sales. How much did similar homes sell for in their existing condition? What did updated homes sell for? Compare homes with similar size, location, and features. A remodeled home across town may tell you very little about what improvements would be worth on your property.
A cleanout may be enough to get started
You don’t have to choose between doing nothing and remodeling the whole house.
Removing unwanted belongings, cleaning thoroughly, and tidying the yard can make the property easier to show. Once the rooms are clear, you can better judge whether painting or replacing worn flooring would be worthwhile.
Set aside family keepsakes and important documents before arranging a cleanout. If several relatives are involved, agree on what can go before anyone starts hauling things away.
The goal is to spend where it helps the sale. A long renovation list can wait until you’ve looked at the numbers.
Selling as-is is an option
Selling as-is may make sense if the home needs substantial work, you live far away, or you don’t want to manage contractors.
It also doesn’t mean you have to accept the first cash offer. You can compare an investor’s offer with what the home might bring if it were listed for sale in its current condition. Look at the likely expenses and terms of each option.
One point matters here: “as-is” does not eliminate applicable disclosure obligations or automatically take away the buyer’s inspection rights. The paperwork and contract terms still matter.
Compare what you would keep
Here’s a hypothetical example showing how a higher sale price can produce a smaller return. These are made-up figures to explain the calculation, not a valuation or contractor estimate for a San Diego home.
Sell as-is
Selling price: $800,000
Preparation and repairs: $0
Selling expenses: $48,000
Carrying costs: $3,000
Remaining before loan payoff and taxes: $749,000
Cleanout and basic preparation
Selling price: $825,000
Preparation and repairs: $8,000
Selling expenses: $49,500
Carrying costs: $6,000
Remaining before loan payoff and taxes: $761,500
More extensive repairs
Selling price: $860,000
Preparation and repairs: $45,000
Selling expenses: $51,600
Carrying costs: $12,000
Remaining before loan payoff and taxes: $751,400
For this illustration, selling expenses are estimated at 6% of the sale price. That is a calculation assumption, not a standard commission or fee. Actual expenses depend on the transaction and negotiated terms.
Carrying costs are assumed to be $3,000 a month for one, two, or four months. Your own estimate should include applicable mortgage interest, property taxes, insurance, utilities, HOA dues, and upkeep. Outstanding loan balances and any taxes arising from the sale are excluded from these examples.
In this example, basic preparation leaves you with the most money. The more extensive repairs bring a higher price, but most of the increase goes toward the work and the additional time.
Different assumptions could change the result. That’s why you want the comparison before committing to repairs.
Leave room for things to go wrong
A repair budget should include a cushion. Work can uncover additional problems, and delays can add another month of expenses.
Ask what happens if the repairs cost more than expected or the home sells for less than you hoped. If the project only makes sense at the highest possible selling price, it deserves a closer look.
Your time matters, too. Managing a renovation from another city or coordinating decisions among family members can make a modest potential gain less appealing.
Make a plan before spending
For an inherited home in San Diego, I’d start by comparing its likely selling price in its current condition with what a few specific improvements might add. From there, we can work through the costs and decide which approach fits your situation.
My guide, The First 90 Days After Inheriting a Home in California, also covers the decisions that come before putting the home on the market.
Before you spend money fixing an inherited home, let’s compare your options.