Rules of Thumb
Veteran Realtors know that $1 in deferred maintenance subtracts much more than that from a home’s sales price.
The ratio can be 3:1, 4:1 or even higher.
While the exact amount is house and buyer-specific, at least anecdotally, there seem to be two factors that widen the discount.
One. Price Point.
First-time Buyers are notoriously cash-poor.
So, the prospect of tackling $5k ” or $25k ” in immediate repairs might not just be a negative, it could very well be a deal breaker.
As a result, deferred maintenance on smaller, more modestly-priced homes can loom larger.
Conversely, many first-time Buyers seem especially willing to pay a premium for homes in mint or move-in condition.
Two. Absolute amount.
Plenty of Buyers are fine with a short list of deferred maintenance.
However, once the list grows from a few items to several major “Projects,” the pool of Buyers with the willingness and resources to tackle said items can shrink dramatically.
Fewer Buyers = weaker demand = lower price.
Which is why savvy Sellers are well-advised to whittle down the repairs list as best they can.
