Repair big defects before selling

Three years ago, when the home-sale market peaked, buyers frequently bought "as is" regarding deferred maintenance, like wood-destroying pest or termite damage.

Home prices were rising in many areas, and buyers were flush with cash and could line up a mortgage even if they didn't qualify. Today, prices are still declining with a few exceptions; many buyers are cash-strapped and they need to put more cash down and go through a rigorous qualifying process to get a mortgage.

In the hot seller's market of several years ago, many sellers invested money to make their homes look pretty in order to attract multiple buyers and drive the sale price up. But they usually didn't spend much time curing deferred maintenance, because buyers bidding in competition often bought "as is." Sellers focused their fix-up-for-sale efforts on cosmetics.

HOUSE HUNTING TIP: A home still needs to look good to sell in today's market. However, a difference from the previous market is that a property that has deferred maintenance can be hard to sell unless the price is discounted significantly. And, it may be still impossible to sell if there is a lot of inventory of similar homes on the market that don't require as much work.

From the buyers' perspective, there is the hassle of getting the work done and paying for it.

The ideal way around this problem is to have defects that might impede the sale of your home corrected before you put your home on the market. This requires planning in advance.

Sellers who don't have cash available should look into using a home equity line of credit.

Sellers may object to paying to correct defects on a home they're leaving. However, home maintenance is an integral part of homeownership. Homes that are well maintained usually don't have a large deferred-maintenance bill when they sell.

It's wise to have presale wood-destroying pest and home inspections done months before you plan to sell. Ask the inspectors and your real estate agent to help you prioritize the work that needs to be done. Take the most cost-effective approach.

If all the wood-pest damage doesn't need immediate attention, do the work that's critical, like a deck that's deteriorated to the point that it's dangerous. The buyers can then save over time and budget for repairs.

THE CLOSING: Another argument in favor of correcting glaring defects before you sell is that even if the buyers accept the property in its present condition, the appraiser might not. Then you'd have to try to get the work done before closing or lose the deal.

Dian Hymer is a nationally syndicated real estate columnist and author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.