You’re pre-approved for a mortgage and excited to begin your home search with your real estate agent. As you look for single-family homes, a common pattern may emerge—many homes may need some level of repair. Maybe the roof needs replacing, the gutters are old, or perhaps the exterior paint is peeling. It could be as simple as updating the porch or front door. Whether it’s just one or two things or a handful of necessary repairs, most sellers tend to list their homes “as-is.”

When you find a house listed for, say, $600,000 and realize it needs about $50,000 worth of repairs based on your home inspection or advice from a trusted contractor, you may think, “I’ll just offer $550,000 to account for the repairs.” This approach can make sense in some cases, but there are key factors to consider.

Understanding Seller Motivations and Market Realities

Sellers are under no obligation to fix anything before selling the house. When listing a property for $600,000, a seller likely already factors the needed repairs into the price. If they were to invest $50,000 to fix the home, they’d aim to sell it for $650,000 to maintain their net proceeds of $600,000. From their perspective, it doesn’t make financial sense to make those repairs if the end result is the same.

So, when you find a home listed at $600,000 that needs $50,000 in repairs, it’s likely priced at that level because of the work it requires. Offering significantly less because of repair costs might not be realistic, especially if the home has only been on the market for less than 60 days. Sellers are typically less willing to negotiate significantly in the early stages of a listing, especially if the market is strong.

When Lower Offers Might Work

If the home has been on the market for over 60 days, or if properties in that area tend to sit unsold for longer periods, then there might be room for negotiation. However, expecting to lower your offer solely because of needed repairs and assuming the seller will accept might set you up for disappointment. The reality is, homes needing work are often priced with that factor in mind.

Financial Considerations for Buyers

A good rule of thumb: for every $50,000 you reduce from a home’s price, you’re saving about $300 per month in mortgage payments. If an extra $300 per month in payments for a $600,000 home is going to strain your budget, it may be a sign to reevaluate your home search. You should consider a lower-priced home, a different neighborhood, or make other concessions, such as fewer bedrooms or less square footage.

It’s wise to build in a buffer of $300 to $500 per month in your home buying budget to give yourself some financial flexibility. If you’re cutting it too close with payments, even a small unexpected expense could cause stress.

Conclusion: Offer Smart, Stay Realistic

Making a lower offer because a home needs work can sometimes be successful, but don’t expect to go into contract unless the house has been on the market for a long time or is in severe disrepair. Most homes, even those needing some updates, are not in “dire straits,” and the price is often reflective of the repairs needed. Ensure that you’re financially prepared for any additional costs, and remember that a flexible budget will serve you well in the home buying process.

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