[ossiblue]

It only makes sense to fix up a house if the cost of the rehab will be less than the new selling price, minus the costs. Investing 50k to sell it for 50K more doesn't make sense and carries the risk that the new asking price may not be met. Further, there is the time factor to rehab the house and keep it off the market. Prices may rise or they may fall during that time--is a gamble.

It would only make sense to the seller if rehabbing the house adds significantly to the equity he would get at the newer selling price, once the costs have been deducted.

Same goes with the buyer. If he's looking at rehabbing costs of 50K and will realize only a 50K increase in his equity, he'll pass or offer much lower than the 250K being asked. This will be the telling feature. If the house sits, unsold, then it is over priced as is. Having to lower the price to, say 200K, may bring offers. Now, the owner may think, "If I put in 50K I can get 300K for this house--50K more than my fixing costs." This may then inspire the owner to fix the house.