Prepping a house before selling can easily run between $10,000 and $20,000. The enhancements can range from cosmetic, such as a fresh coat of paint, to necessary, such as repairing a roof so the house can pass inspection. This is a significant expense for most families, so consider these four sources for funding home improvements.
1. Estate assets
The first place to look for funding home improvements is in the estate itself. Are there liquid assets (insurance policies that could be cashed in, stocks, savings bonds, CDs) or personal property assets (cars, furniture, art, collectibles) that you could sell to finance the work? A word of warning, though: If the estate is still in probate, check with an attorney before touching any assets.
2. Home equity
Another option for funding home improvements is using a home equity loan. Again, though, check with an attorney to make sure you have proper signing authority to take a loan against any asset in the estate. This can be tricky because the estate will likely not qualify for a loan. Even with a living owner in transition, banks are reluctant, and usually charge penalties if a home equity loan is taken out right before a house is sold.
Does anyone in the family have cash on hand for funding home improvements? Does the estate have any checking or savings accounts, and does the estate attorney give the okay to dip into those? If there are multiple beneficiaries, perhaps you can pool resources to get the work done and pay yourselves back after the sale.
You could consider tackling the repairs or other work yourself if you are skilled in that area. Or, perhaps there is another family member with those skills who is willing to assist. However, just be careful in navigating this. Consider whether you or the family member should be paid for that work time or if not, will there be some form of compensation? Also, anyone working at the house should sign a waiver of liability for the estate, and/or provide proof of insurance that they are covering themselves when working on the property.
If financing is a problem, you can always sell the house “as-is.” Skipping the repairs can help you sell the house more quickly, but probably at a lower price than you would get if you invested a little money into funding a few key home improvements.