A Guide To Selling An Unfinished House Under Construction

Selling a home always comes with its challenges. The higher the cost, the more likely the home will be hard to sell. This becomes even harder if the home being sold isn’t finished. Luckily, with recent technology, the resources for making unfinished homes look more appealing are growing.

There are several reasons someone may be trying to sell an unfinished home. Maybe they have health problems, financial issues, time constraints, or have just lost interest. Whatever the reason, there are some key things to focus on to increase your likelihood of selling your unfinished home – most having to do with how you market it.

Key Takeaways

Challenges of Selling an Unfinished House

Many buyers are more hesitant to buy unfinished homes. While this may give the buyer more options for customizing their home to look the way they want it to, they also may have a hard time envisioning its full potential once the property is completed. Additionally, the buyer may have some concerns about how much extra money they are going to have to spend finishing the work on the house.

It is also important to keep in mind disclosure requirements vary by state and local law, but require the seller to disclose any negative information about the property. When selling an unfinished home, there are many challenges to overcome. These challenges include presentation during showings, price, having to go through a private lender with higher interest rates, time, and addressing buyers’ concerns about cost and completion.

Even when selling a home that will be unfinished regardless, it is best to have as much work done as possible before selling and an estimated timeline for how long completion will likely take.

Finding an Experienced Realtor

Finding an experienced realtor won’t just help you sell homes with unpermitted work. They may have experience with several parts of selling homes with unfinished construction. Real estate agents can have a huge impact on how well and how quickly the property is sold. They may also have additional suggestions for tools and techniques you can use.

You don’t have to go with the first real estate agent that you find. You can schedule interviews with multiple people before making a final decision. Make sure to ask important questions, such as how they display information to potential customers, what types of tools they use, and if any tools involve new technology.

Using Visual Projections Of What the House Will Look Like When Completed

One of the reasons many people may be hesitant to buy a home that isn’t completed is that they aren’t able to envision the final product themselves. Giving someone a walkthrough of a house that has unfinished construction and can’t be properly staged could be scary for them. The best way to market the property is to help potential buyers visualize the property’s potential.

With technology as advanced as it is now, one idea for creating that visual is to create a virtual 3D tour using a rendering to stage the house with a version of how the property could look once construction is completed and the home is furnished. This will enable potential buyers to see the possibilities of the property with their own eyes. Because construction isn’t completed yet, if the buyer sees something they don’t like, they could also make that change themself if they go through with the sale.

Taking this a step further, Niko Raptis, broker for Realogics Sotheby’s International Realty, says in addition to creating a virtual tour, he created a lifestyle video to show buyers how life in the new home could be. He then used the content to create social media campaigns and spread the visuals even further.

Online Marketing

As shown by the example of Raptis, marketing on social media can be highly effective for selling unfinished properties. According to a study done in 2022, around 99% of home buyers between the ages of 24 and 57 use the internet to find homes in their home-buying process. Older generations looked online too. The same data showed that 84% of 77 to 97-year-olds also used the internet during the homebuying process. This shows the importance of promoting homes online and being able to utilize recent technology to market the property.

According to SproutSocial, the majority of realtors are already using social media in some capacity to promote the homes they are selling. Using images and videos of 3D renderings of the home can be used to create content for social media campaigns to promote the property. This may increase the likelihood that this content is shared with other people.

In addition to posting content to help people view and envision the property’s potential, you can also purchase ads that will specifically target demographics for those interested in buying homes in the area. This way, even if someone isn’t following the account, they still might find related posts on their page.

Other Marketing

Marketing can be done through more than just online outlets. Depending on the property, you can also try hosting events. This can work like a private showing but with a little extra appeal. You can try adding food and refreshments for guests or have live music. If parts of the property are finished enough to have furniture, you could also borrow or buy furniture to help stage the property during the events. Even if there are only one or two rooms in the house, staging it can be beneficial.

This is another way to get people out and look at the property in a positive light.

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Turning the Unfinished House Into Opportunity

When selling a house that still needs construction done to be completed, you will have to come up with a list of what still needs to let the buyer know. Instead of presenting this information as the parts of the property that need to be started or completed, present it as an opportunity. This isn’t just online. This also goes for any other flyers you may be handing out or what you say to potential buyers asking questions.

For example, if walls or floors need to be done, let potential buyers know this means they have the opportunity to customize these parts of the property to whatever way they prefer them to be and they are receiving the property at a discounted rate to account for those spendings. You can be very specific about certain aspects of the property and what future you can envision for them. Present the incomplete parts of the home as a way for buyers to create their dream home.

Having Permits for Completed or Ongoing Work

Although permits can be expensive, make sure you have permits for any incomplete or ongoing work on the property. Permits are required to ensure the safety of those occupying the spaces not having permits can lead to even less profit. These permits also let the new property owners know that all work was done to code and has been done safely because there were inspectors and government oversight.

According to Justin Harve Real Estate Team, there are a few troubles you may experience later when selling a property with unpermitted work. This includes deterring buyers because they will then take on this responsibility and buyers potentially face a penalty for not pulling the permit. If the seller doesn’t disclose the fact there is unpermitted work done in the house, they may also experience legal trouble — such as being sued for misleading real estate practices or negligence — later on down the line when the homeowner discovers this was being hidden from them. You could also get in trouble if the unpermitted work causes any other damage.

It is not impossible if you do decide to sell the property with unpermitted work, but it is more difficult. If you do decide to go this route, make sure you find a realtor who has the experience to avoid any issues later.

Conclusion

There are many hurdles to overcome when selling a home with unfinished construction and it is important to be open about all of the work that needs to be done. With modern technology, however, there are still ways to help potential buyers not only become interested but become excited about the property.

The key to selling properties that still need a lot of work is to help the buyer envision the possibilities for the property after they finish the work that needs to be completed. Hiring a real estate agent who has experience in that area can help you go through the process much more smoothly.

It can be a lot of work buying an unfinished home and it doesn’t come without its challenges, but it can also be an opportunity to truly customize your home to look any way you want it to. Helping a buyer see that can make all of the difference.

1. How is an unfinished house valued?

An unfinished home is valued by the comps the realtor runs, minus the cost of finishing the home. This makes it a fair cost for buyers.

2. What does it mean when a house is under construction?

A home being under construction means it is actively being built.

3. Can a house be sold if it is not finished?

Yes, a house can be sold if it is not finished. It may not be the easiest option, as most buyers do want a completed home, but the right buyer will still buy.

4. Is it harder to sell an unfinished house?

This depends largely on the market, state of the home, and location. Generally yes, it can be harder to sell an unfinished home. However, with the right cost and marketing, a home will still sell, even if unfinished.