There may be several good reasons you might consider selling a home “as-is.” A home is sold “as-is” when there is a reason to sell quickly. In such cases, there are financial or even emotional distress that prevent a seller from preparing a home. Often, an “as-is” home is in disrepair and the seller does just not have the means or energy to do any repairs.
What Does It Mean When You Sell Your House “As-is?”
On one hand, there is what selling your home “as-is” means to the buying public.
And then on the other hand, there is what a seller would like to think selling a home “as-is” means. At its core, "as-is" means the home is being sold exactly as it sits in that moment and a seller is not willing to make any concessions.
The “As-is” House And The Buyers Perception
For the buying public, the perception of selling a home “as-is" signals that the home is a fixer-upper. The home needs attention and the home seller has no means to do any of the necessary repairs. It is being sold in the manner it is presented and the buyer needs to do their due diligence.
Homes being sold “as-is” sends several messages to a buyer:
- Buyer Beware: You purchase at your own risk.
- Clearance: A buyer is potential taking on latent defects that can’t be foreseen.
- It is in physical disrepair: The house is in physical distress.
What A Seller Wants “As-is” To Mean
Often a home seller wants “as-is” to mean take the house or leave it: “I am not negotiating home inspection repairs. Don’t ask. I don’t want the hassle.”
But for many home sellers with perfectly good homes who are trying to get top dollar, that is the wrong message you want to send.
When Should You Sell A Home “As-is”?
You should consider selling a home “as-is” when you need to get out from underneath a home quickly or you do not have the time or resources to properly prepare your home for the marketplace.
The home could need significant repairs that you just can’t handle financially or have the time to deal with. You could be financially distressed and facing foreclosure. You could be emotionally distressed with an estate sale of a family member and don’t want to deal with a long drawn out process, etc.
The keyword is distressed: financially, emotionally or physically. That is the perfect time to sell your house “as-is.”
When You Shouldn’t Sell Your Home “As-is”
Selling a home in perfectly good condition with no real constraints and when you want top dollar for your home, is not the time to market your home “as-is.”
Your slapping a clearance sign on it and the bargain hunters will come out of the woodwork. Not the buyers who will pay top dollar for a good home.
What you mean is you don’t want to play cat and mouse with a buyer since you feel you have priced your home fairly for it’s condition. However, the way to handle this situation is to be firm on negotiations from the get-go. Don’t shut the door on a buyer before they even show up by advertising a “distress” situation.
Buyers looking for a turnkey home are not going to look at homes that are being marketed “as-is.”
The Pros Of Selling House “As-is”
Saves Time. You won’t have all the pre-listing preparation a traditional home seller will go through to prepare their home. When you list your home for sale “as-is” you can just slap the sign in the front yard and get to it.
Saves Out Of Pocket Money. When selling “as-is” you don’t have to upfront the cost of any repairs. You are telling the world they are buying your home in the condition it sits right now.
Con’s Of Selling A House "As-is"
A Different Type of Buyer. You will be attracting the investors, the bargain hunters and the dreamers, and they all want a bargain. By saying your house is “as-is” upfront, you have slapped a clearance sign on your home. You won’t be getting as many offers overall and you should expect to recieve some obnoxious offers.
You Will Be Selling For Less. By selling your home “as-is’ you will be leaving some money on the table. You are trading the time & hassle involved with selling a home in exchange for less money. Additionally, the type of buyer your attracting is going to negotiate hard.
When you sell your house “as-is” you cannot have your cake and eat it too.
You Still Have Legal Obligations That Selling A Home “As-is” Does Not Release You From
Property disclosure laws vary from state to state and it is important to know what the disclosure laws are for your state. By selling your home is “as-is” you are not absolved from state or federally mandated disclosure laws.
For example, Massachusetts disclosure laws do not require a seller from disclosing latent defects in a home. Whereas California requires extensive property disclosures by law. Federal law requires all residential properties to provide a lead paint disclosure and cannot be skipped by anyone.
How To Sell A Home “As-is”
Selling a home “as-is’ does not differ much from traditionally selling a home. The main exception being that you are stating upfront that the home is being sold exactly as it sits.
Have A Frank Discussion With Your Realtor
Start with a discussion with your real estate agent about whether a home should be sold “as-is” or if your better off putting some time into the home based on your level of effort you are willing to give and your financial circumstances.
Sometimes a little bit of preparation can net you some big dollars and may be worth a bit of effort.
Consider A Pre-Listing Home Inspection
A pre-listing home inspection can help save you some time and aggravation down the road. It will give potential buyers a good overview of what the home needs.
Having a pre-listing home inspection report available will help buyers structure realistic offers without leaving much unknown about the condition of the property. It may also prevent renegotiating after a home inspection when buyers are hit with repairs they weren’t expecting.
Disclose Known Defects
Deals fall apart when the unexpected pops up. If you disclose what you know about the property, it is more likely surprises won’t pop up that scare a buyer off.
Even in states that don’t require disclosure, it is in your best interest to disclose. It will ultimately save you time money and aggravation from the deal falling apart when an issue arises the buyer was not aware of.
Allow A Home Inspection
Allow a potential buyer to do a home inspection of the home. It will prevent them from spending money on costly unknown defects later on.
By allowing a buyer to hire a home inspector to do a thorough examination of the house, you will promote stronger offers up front. It allows the buyer the opportunity to re-examine their offer if some serious unknown issues arise.
If possible provide estimates of large ticket items. A buyer will always estimate more cash than is usually necessary to repair or replace an item in a home.
Roofs and furnaces are big-ticket items that usually have an urgency to being repaired. So your house may need a new roof now you can show an estimate to a potential buyer so they can have an accurate repair value when considering an offer.
Price Your “As-is” Home Accordingly
Base your home's price on the repairs that need to be done to bring it up to compete with homes in average condition.
You are not going to get the same price for a home that needs significant updating and repairs compared to a similar home that has been recently remodeled.
Before marketing your home in “as-is” conditions, make sure you fully understand what comes with selling your home “as-is. “ You are inadvertently sending a message to the buying public that you may or may not want to send. Selling your home “as-is” limits your buying pool and attracts a certain buyer.
If you want to stand firm on not doing home inspection repairs and your house is in average to good condition, telling buyers your house is being sold “as-is” may not be the way to go.
When it comes time to sell your home “as-is,” being transparent upfront will go a long way in buyers writing good offers on your “as-is” home.