Sometimes a seller will list their home “as-is.” If you are considering doing so, it is important to understand just what this term means. Usually, a house for sale as-is needs either updating or repairs. However, you may have any one of a number of other very good reasons to sell your home as-is:
- You have an inherited home that you have not seen and, therefore, do not know its condition.
- You must sell a home in a hurry due to an unforeseen situation such as illness, a death in the family, or a job transfer.
- You do not want put the time and money into making needed repairs on an old home.
If you look at the list of the 10 minimum improvements experts say one should make before selling a home, you will see immediately if your home needs more work than you are willing to do:
- Change outdated ceiling fans and light fixtures.
- Fix building code violations.
- Fix or replace all old or broken appliances.
- Patch all holes and cracks in walls and ceilings and remove outdated wall paper and popcorn ceilings.
- Repaint dark, unusually colored, or marked walls with neutral paint.
- Repair or replace broken windows and doors and remove old window coverings.
- Repair or replace leaky faucets.
- Repair or replace the roof.
- Replace old heating and air conditioning systems.
- Replace worn carpeting, as well as old or cracked vinyl flooring.
The Perspective of a Home buyer
From the perspective of a home buyer or real estate professional, a house listed for sale as-is usually needs updating at the very least, and may even need major repairs. If you are not willing to put in the time and money upgrading your house prior to sale, then selling your home as-is may be a good option. If you are planning to sell your home “as-is” in Ocala, Orlando, or Clermont, Florida, you should contact a real estate professional to assist you. Before you decide to do so, however, let us look at the pros and cons of selling your home as-is.
The Cons of Selling Your Home As-is
As-is, as mentioned previously, implies there are faults, that, for one reason or another, you are not willing to address. A home buyer knows immediately that the home has some sort of conditional problem. Therefore, when you list your home as-is, you may encounter the following cons:
- Banks and finance companies may not be willing to lend money on a home that needs repairs.
- Listing your home as-is can negatively affect your home’s value, as a home that needs repairs sells at a lower price than one that does not.
- Many potential buyers are eliminated, as they want a home that is move-in ready.
- You may need to lower the price of your home.
- Your home may receive only offers from investors or those looking to flip a house quickly.
Although we must consider these negative aspects of selling your home as-is, you may still have a good reason for doing so. Selling an older home that requires a lot of repair takes time and money you either may not have or do not wish to spend. Some people actually look for an older home in need of repairs because either they like the location or they are interested in doing the necessary repair work as time and their budget allows.
The Pros of Selling Your House As-Is
It can be beneficial to sell your home as-is. Consider each of the following benefits of selling your home as-is and discuss them with your real estate professional:
- The sale of your home may be very quick, a necessary factor in some situations.
- You can avoid the expense and hassle of doing repairs and renovations.
- If you owe more than the house is worth, selling it as-is might be a good idea.
If the housing market is competitive, most buyers will choose not to purchase a home “as is” if they can find one comparable in move-in condition. Remember that most buyers considering an “as is” home are hoping for a good deal based on location, price, and condition.
Some Things to Consider When Selling Your Home As-Is
- Is it a buyer’s or a seller’s market? A buyer’s market (a slow market) means potential buyers might not even look at a home that needs work. However, if it is a seller’s market, buyers might be willing to have fewer repairs and renovations done.
- What is the condition of comparable homes? If your home is in an area of older homes with similar age and condition, listing your home as-is may bring in a good offer.
- What type of return are you hoping for on your investment? Remember that you will not get as much for a home needing major repairs and renovations as one in move-in condition. It might be better to pay for repairs and updating than accept a lower price.
The seller is not required to get the property inspected and you do not need to bring it up to code. However, if you decide to sell your home as-is, it might be a good idea to get inspections upfront and disclose needed repairs and updates to the seller. Doing so prevents misunderstandings, the violation of any of your state’s disclosure laws, and allows your agent to use the information to price the property.
Why You Should Have an Agent When Selling Your Home As-is
Talk to your real estate professional for advice about whether listing your home as-is is right for you. Your agent will probably help you with each of the following:
- Making sure the buyer knows the house is for sale “as is.” A buyer might be looking for a vintage house with the characteristics they desire, outweighing the problems that make it a ‘sale as is.’
- Even with an as-is listing, potential buyers may try to negotiate for repairs. Therefore, it is important to decide when you list the property how much you are willing to negotiate. Your agent will help you with this decision.
- You agent will ensure that the purchase contract states that your house is being sold as-is. A clause, referred to as an “as-is addendum,” will protect you in the event a buyer has remorse or encounters issues after purchasing the home.
- Your agent will note what is wrong with the house prior to the sale in advertising.
- Your agent will screen prospective buyers, since your prospects may be:
- An investor looking for a “fixer-upper” and planning to do some quick repairs and flip the house for a profit.
- An investor looking for a dwelling to repair and rent for a positive cash flow.
- A low-income buyer, wanting to get a house with low mortgage payments and planning to fix up the property over time.
After reviewing the cons and pros of selling your home as-is, you will be ready to talk to a real estate professional. They can find a buyer for your home, as well as assist with the required paper work, assuring the sale of your home, whether or not you decide to sell it as-is, goes as smoothly as possible.