A half-finished construction project or stalled renovation can feel like a financial and emotional anchor. Whether you've run out of funds, experienced a life change, or inherited a property mid-renovation, the uncertainty of an incomplete house can be overwhelming. The good news is you can sell an unfinished house in Texas.

This guide covers the challenges, legalities, and practical aspects of selling a property that's still under construction or renovation. While traditional sales paths exist, they come with obstacles. There are more direct solutions to help you move forward without the stress and delays of selling an incomplete property.

What Qualifies as an "Unfinished House"?

Before exploring your options, it's important to understand what constitutes an unfinished house, as this can vary significantly between properties.

New Construction Halts

This category includes homes under construction that were halted before completion. This is a property with just the foundation, a framed house with no drywall, or a nearly-finished home missing final fixtures, flooring, or finishing touches. You started building your dream home but financing fell through, or costs escalated beyond your budget.

Incomplete Renovations or Additions

This category covers existing homes undergoing significant remodeling or expansion that isn't completed. Examples include a gutted kitchen, mid-renovation bathrooms, or an addition that's framed but lacks electrical, plumbing, or interior finishing. Many homeowners face this after discovering unexpected problems or life changes mid-project.

Both scenarios present similar challenges for potential buyers and lenders. Knowing your property's category helps you articulate its current state for a sale. Selling a partially built house requires clarity about its completion stage, as this impacts your options.

Is It Legal to Sell an Incomplete Home in Texas?

Texas law doesn’t prevent you from selling a home at any construction stage. Whether construction is 10% or 90% complete, the property is yours to sell.

The critical legal requirement is full disclosure. Texas law requires sellers to be transparent about the property's known condition, typically through a Seller's Disclosure Notice. For an unfinished home, this means being upfront about what's incomplete, permit status, and known structural or system issues. Honesty protects you from future legal complications.

The challenge isn't legality, but practicality. The challenge is finding a buyer who can and will purchase the property as-is. Most traditional buyers seek move-in ready homes, and most lenders won't finance properties that don't meet certain completion and safety standards.

In these situations, selling "as-is" becomes paramount. When you sell a property as-is, the buyer agrees to take the property in its current condition, and you as the seller will make no repairs or improvements before closing.

Why Selling an Unfinished House Is Challenging

The main obstacle to selling an unfinished house through traditional channels is buyer financing. Conventional lenders, including those offering FHA and VA loans, require a property to be complete, safe, and habitable before approving a mortgage. An unfinished home doesn't meet these criteria.

For a buyer to purchase your unfinished property using traditional financing, they need a construction loan. These loans are for incomplete properties, but they come with significant drawbacks. Construction loans typically have higher interest rates, require larger down payments (often 20-25%), and involve a complex approval process with detailed construction plans.

The buyer must act as project manager or hire someone to oversee the home’s completion. This eliminates 99% of typical homebuyers, leaving only those with specialized knowledge, substantial cash reserves, and a willingness to take on a project.

The Permit and Certificate of Occupancy (COO) Puzzle

A Certificate of Occupancy (COO) is an official document issued by local municipalities certifying that a building meets all codes and is safe for habitation. An unfinished home cannot obtain a COO, creating two major problems:

Most lenders require a valid COO before financing a property. Without it, traditional financing is impossible for potential buyers.

In many Texas municipalities, it's illegal to live in a structure without a COO. This means your buyer must complete the construction and navigate the inspection and permitting process to make the home legally habitable.

Open or expired building permits create complications. When construction stops, permits often expire, and unresolved permits can create title issues. A new owner must close out these permits, facing complications if the original work doesn't meet current code requirements. This adds uncertainty, cost, and risk for any potential buyer.

Marketability, Appraisals, and the "Vision" Gap

Determining a fair price for an unfinished property is a significant challenge. Professional appraisers struggle to value incomplete homes because standard comparables don't apply. Without a clear valuation, listing at the right price becomes guesswork, and lenders have little basis for determining safe lending amounts.

Selling mid-renovation Texas properties is challenging. Most MLS buyers lack the vision to see potential in a construction site. Typical buyers see only risk, work, and unknown costs where you see a 60% complete project. Even with excellent photography and descriptions, communicating the property's potential to the average buyer is difficult.

Selling An Unfinished House in Texas

Option 1: Traditional MLS Listing

It is possible to list an unfinished house on the Multiple Listing Service (MLS) with a real estate agent, but it is challenging. This targets a niche market of builders, investors, or rare buyers with construction knowledge and specialized financing.

Success with this option requires an agent experienced in selling distressed or incomplete properties. They need to craft marketing materials that clearly communicate the property's potential while being transparent about its current condition.

This approach has significant downsides:

• Extended market time (often 3-6 months or longer)
• Frequent lowball offers from opportunistic buyers
• Deals are likely to fall through when buyers can't secure financing.
• Continued carrying costs (mortgage, taxes, insurance) during the lengthy selling process
• Risk of further property deterioration while waiting for a buyer

Option 2: Selling Directly to a Builder or Investor

Another option is to proactively seek local builders, contractors, or real estate investors interested in your property. They can evaluate the property's potential and have the resources to complete the construction.

This approach can work; it requires significant effort to identify, vet, and negotiate with potential buyers. You'll need to:

• Research active builders in your area.
• Contact real estate investment groups.
• Network with contractors who know interested parties.
• Negotiate without the protection and guidance of a real estate agent.

This method can be time-consuming and risky, even though it bypasses some financing hurdles. Without proper vetting, you may deal with less-than-reputable individuals who make empty promises or offer unfavorable terms.

Option 3: A Direct Cash Home Buyer

For many sellers of unfinished Texas homes, working with a professional direct cash home buyer offers the most straightforward path to closing. These companies specialize in purchasing properties in any condition, using their own funds rather than traditional mortgage financing.

This approach sidesteps the financing, appraisal, and marketability hurdles of other selling methods. Professional cash buyers accurately assess the property's value and close quickly.

For sellers prioritizing speed, certainty, and simplicity, this is often the ideal path. Companies like GetHomeCash, which specialize in purchasing homes in any condition, including those with incomplete construction or renovation, lead this space.

FAQ

Can I sell a Texas house with open permits?

Yes. When you sell to a cash buyer like GetHomeCash, they take on the property’s responsibility, including resolving open permits after the sale. This is a significant advantage over traditional sales, where unresolved permits can delay or derail closings.

How do you value an unfinished house?

We assess the property's potential value once completed (After Repair Value or ARV), subtract the estimated construction costs, holding costs, and a small profit. This allows us to make a fair offer based on the property's current state and future potential.

Do I still need to fill out a Seller's Disclosure for an unfinished house?

In Texas, it's best practice to disclose known property facts, even when selling as-is to a cash buyer. Honesty is the best policy, and professional buyers expect a full picture of the property's condition.

What happens to my construction loan if I sell the house before it's finished?

The sale proceeds pay off your construction loan balance at closing, like a traditional mortgage.

Conclusion

It is possible to sell an unfinished home in Texas, though the traditional real estate path is filled with obstacles that can make the process lengthy, uncertain, and stressful. Financing limitations, permit complications, and marketability challenges create a perfect storm that can leave sellers feeling stuck.

A direct cash sale to a professional buyer like GetHomeCash offers a fast, certain, and simple alternative that many sellers find invaluable. By bypassing the conventional market's limitations, you can close this chapter and move forward.

You don't have to be stuck with an incomplete project. With the right partner, you can close this chapter and turn your unfinished property into cash and your construction headache into a resolved situation.