Selling a home can take a lot of time, energy and money under even the best of circumstances. But what happens when you have a home that has repairs that need to be addressed, but you do not have the time or money to fix them?
In this type of real estate situation you can choose to sell your home as-is. There are many buyers out there that might be interested in a bit of a fixer-upper and your as-is opportunity may be just what they are looking for.
This as-is home selling guide will provide everything sellers need to know to sell a house as-is including the pros and cons of doing so.
What Does Selling A House As-Is Mean?
Selling a house as-is means that you’re selling a home without putting any additional work into it and that the buyer will accept the property in the current physical condition.
What potential buyers see is what they’re going to get. The home will be purchased without any expectation that any home improvements will be done prior to the real estate transaction being completed.
It’s important to note that selling a home as-is doesn’t change the rules about disclosing the issues your house may have. If there are any structural defects or major problems with the home, potential buyers must be made aware of them.
Pros Of Selling A House As-Is
Selling a home as-is allows you to quickly sell your home without spending time or money on repairs. While the sale price of the home may be less than what is standard for other homes in the area, you will not be investing any more money into the home on improvements.
It is very common for real estate investors and flippers to purchase homes that require repairs. They have expertise in this area and know how to improve them to maximize resale value. Selling to an investor or flipper can often result in a quick sale since many will make you a cash offer and having a cash buyer is a much easier process for selling your as-is home.
Below are a few other benefits of selling your home as-is.
If you’re a homeowner, you know how costly regular maintenance can get and sometimes you just do not have the money to do home repairs. Over time these lack of repairs can really affect the value of your home.
A new roof and gutters can easily cost you several thousand dollars. Replacing the carpeting in multiple rooms may set you back a couple hundred dollars. When you combine that with other costs associated with selling and moving, you can easily find yourself over budget.
It’s also important to note that sometimes the cost of repairs may not truly be worth it.
The whole point of investing in repairs before selling is to get a higher price for your home. If your house value has severely decreased and you have a lot of costly repairs to perform, the extra money you invest may not help you much.
This is when the option to sell a home as-is becomes a good option for a home seller.
Selling a home is a time consuming process. Depending on your circumstances, time may not be on your side. Maybe you have to relocate or maybe you need to help a family member.
Whatever the reason, if you have to move quickly, selling your home as-is may be the best option.
When selling as-is you may attract cash buyers which would be the best case scenario for sellers. Below are some of the reasons that as a seller you may want a cash buyer:
- Closing times are often much faster. When a buyer requires a mortgage or loan there is excessive time spent on financing paperwork and approvals. With a cash sale a seller can find a closing happening as quickly as in a few days – or weeks.
- Less chance of a sale falling through. In standard sales with loans there is a chance your listing may not close due to financing issues from lender. Many banks may not even finance an as-is property without repairs being done.
- These buyers will typically be an expert in their field and better understand the as-is process. Because many cash offers will come from investors the transactions are usually easy with less contingencies required for a home sale.
Cons Of Selling A Home As-Is
Selling a house as-is also has some cons you should consider before making your decision to sell your home as-is.
An as-is home sale that requires work on the part of the buyer typically results in very low price offers. Many buyers will over estimate the cost of repairs the property needs and reduce the asking sale price by that amount. This where real estate agents can be beneficial to help you negotiate a better deal.
There is normally much less interest in home sales that reflect the need for additional work to make it move-in ready. A typical home buyer will want to purchase a property that is ready for them to move in and make it their own. This leaves a smaller pool of home buyers for your property.
It can also sometimes be difficult to find a lender to approve a mortgage on a fixer-upper. The best hope for sellers is to find a cash buyer who will purchase the house to flip or work with agents who may have these kinds of buyers to bring to them. These transactions are often fast, but can also bring in a much lower price for the seller.
How to Sell A House As-Is: A Definitive Guide
Are you thinking about selling your house as-is for the first time?
Selling a house as-is will not be much different than selling any other piece of real estate. The good part is that there will be less work and stress on staging and cleaning before showing it to potential buyers.
Here are our tips on how to successfully sell a house as-is.
Figure Out Who Will Be Selling
There are some people that want to sell their house as-is and also want to manage the entire selling process. There are other homeowners that prefer to involve a real estate agent, which we highly recommend.
There’s no right or wrong way to sell real estate as-is; everything comes down to a matter of personal preference.
- Do you have enough time to manage posting your listings online?
- Are you confident in your abilities to talk about the property and negotiate price points?
- Are you familiar with the legalities of disclosure to potential buyers?
- Will you have the time to show the property to buyers?
If you answered yes to all of the questions, you may be ready to sell on your own without the use of agents. For sale by owner is not always the easiest option and you may be limiting yourself from finding the right buyer for your home which is why we do not recommend it. If there are a lot of properties for sale in your city, by not having a listing on your local MLS or listing service you may lose a lot of potential visibility.
If you answered no to any of the questions, then a real estate agent may be your best option to sell your house. Having an expert on hand during an as-is sale can make all the difference in regards to how fast your home is sold and how much you ultimately get for the sale of your property.
Know Your Limits
If you’re selling your house as-is, you may have a little more bargaining power than you’d think. Your goal is to invest as little time and money into the house before you sell it as possible.
However, in some circumstances, there may be some things you might want to consider to get a better sale price for the home. These items will of course depend on your need to sell, time you have and financial situation.
As an example, a potential buyer may ask for you to make repairs before they decide to make an offer. Would you be willing to make some small repairs if you know it will bring a lot more money?
- Would you be willing to replace the roof if it ups the selling price by 5%?
- Are you okay with replacing the water heater if it’ll help someone move in sooner?
- Will you redo the hardwood flooring for $5,000 if you know it may increase your sale price by $10,000?
All of these items may be common negotiations that a buyer may try to make. It is important for homeowners to be ready for these kinds of requests when they sell their home. They will need to know if repairs at all are negotiable or if the home is a true as-is sale.
Get Your Home Inspected
You should not skip the home inspection process in an as-is sale. Home inspections are an important part of any home selling process, and they become a lot more critical when you’re trying to sell property as-is.
Buyers need to be made aware of any property issues that exist.
Having your home inspected before you list it will provide you with the issues it has so you can decide if you want to make repairs or sell the home as-is.
If your house needs small repairs, they may be worth doing to get top dollar. If the home inspector brings attention to larger repairs that are needed, they should be disclosed to a prospective buyer. This will allow the buyer to decide if they want to do the work the home may need.
Yes, ultimately potential buyers may walk away from the sale, but that is part of the risk of selling as-is.
Take Plenty of Pictures
Thanks to the popularity of online listings and current health restrictions, pictures play an important role when you’re selling your home.
It isn’t uncommon for most real estate agents to invest in professional photographers when they sell homes, and it something you should do too if you can afford it. Having images when you list your home is the best way to show the property to a potential buyer. This allows them the chance to see the home in its as-is condition.
Then, if they want to see it, they can arrange for a tour. Don’t be afraid to show pictures of the damaged areas or areas of the home that need some extra love. If they see the home is selling as-is, these pictures will be expected.
Make sure to show different angles of the rooms and consider taking pictures during sunny days to get the best lighting. Don’t be afraid to set up an extra lamp or even use a mirror to help add light to your pictures.
In real estate honesty is everything! Potential buyers should know every issue the home may have. Whether they are items you as the seller are aware of or issues that were found in a home inspection.
- Is your home’s electrical system in need of repair?
- Are the carpets old and need replacing?
- Do you have any issues with mold?
Sellers are required to disclose every issue a home has to buyers, but being upfront about any issues your house may have in the listing phase could help you in the long run. Keep in mind that in many states there are legal requirements for sellers to disclose any home defects that exist.
This is another reason using a real estate agent is a good idea as they can assist you with these legal requirements you may not be aware of.
Focus on Small Things
If you have any extra time or money to invest in house improvement, don’t feel the need to focus on huge projects. Sometimes just focusing on small improvements can make a big difference when you’re trying to sell.
A real estate agent may suggest a fresh coat of neutral-colored paint in a room because it can make it much more inviting to a potential buyer. New caulk in the bathroom and kitchen can make fixtures look great and improve the look of the room.
These small fixes may require an hour or two of your time but they can make a big impression on potential buyers. Agents are big advocates for making small updates and changes because the aesthetic improvements can bring financial returns.
You may not be able to afford a professional cleaner, but your house could still use some extra cleaning attention. Trying to make your house as clean as possible when you’re selling can help you in the long run. Be sure to set aside some time to clean thoroughly before you take pictures and take people on tours.
You don’t need a professional service to deep clean on your own. As long as you focus on removing grim and making everything as clean as possible you’ll be on the right path.
Pay special attention to places that may not normally be regularly cleaned. Baseboards, windowsills, walls, and closest should be cleaned out as thoroughly as possible.
If you have the money you may want to consider renting a carpet shampooer to get everything extra clean. Your carpets will look fantastic and having extremely clean carpets can be a selling point for people with allergies and asthma.
Come Up With A Realistic List Price
Your house may be located in one of the hottest neighborhoods in your state, but if you are a seller listing it as-is, you cannot expect to get the same price as a house that is in great condition. Market value is dictated by many factors but condition of the house is one of the biggest.
As an example, selling a home that just needs a coat of paint and new carpeting can command a higher list price than a home that needs a new roof and HVAC system.
When you sell your house you need to really be aware of what your home needs so you can do a fair market value assessment. Buyers will be looking at homes that are going for a fair price so it is important to ensure you are realistic about the condition of the house as well as the location you are in when deciding on a price.
There are two options to list your home and get it sold, we will talk about both below.
Use A Real Estate Agent
Using a professional real estate agent is highly recommended, even if you are selling your home as-is. Agents will be able to provide you a competitive analysis of recently sold properties in your area which can help you create a fair price for your listing.
Agents can also help guide you during the home inspection and assist in the purchase contract negotiation process.
Sell On Your Own
If selling a house is something you really want to tackle on your own, then below are some thing to consider.
First, you should review what other home sellers are listing houses for in your area. When you sell a home you need to be realistic about the condition of your home compared to those in your neighborhood to come up with a fair selling price.
When you sell your house – to come up with a fair price you should consider the following:
- How many bedrooms and bathrooms do competing houses have?
- How many square feet is your house with the comparable houses on the market?
- How big is your property compare to the others?
- How old are the heating/cooling units, roof, exterior?
Once you understand the local market then you should note all the fixes your home needs and get a baseline for the cost of the repairs buyers would need to do and deduct that from the average home price in the area. Then when you sell your house as-is you will have a price that can attract buyers leading to a faster sale.
It’s okay if your price is a little lower or higher than other homes in the area, but you need to have the data to back it up. Remember, you’re going to have to convince a potential buyer why your more expensive home is worth more than the other listings they’ve seen.
Get Started Selling Your Home
Selling a house as-is doesn’t have to be difficult. When you focus on strategy, small repairs, and a little research selling your house as-is gets a lot less complicated.
While we covered a lot in this post, there are still plenty of other topics to cover when it comes to home selling.
- Do you know how to find a good real estate agent?
- Have you ever conducted market research on your own?
- Are you familiar with a listing service in your local area where you can list homes for sale?
- Have you considered selling your house as-is to a real estate investor or cash home buyer?
Regardless of the route you decide to take, be assured that you can sell your house as-is no matter how much work it needs and regardless of what the real estate market is doing.