Sell A House As-Is – What You Should Know
Selling a house as-is can be a great decision for people who don’t want to spend the time, money, or effort on renovations and repairs. It’s also a great option for those who just want to get the house sold quickly, without fanfare or hold up.
What Does It Mean To Sell A House “As-Is”?
When a home is listed as-is, or “move-in ready,” it means that the seller is selling the house in its current condition, without making any repairs or upgrades. Something to consider from the buyer’s perspective is that the seller is already disclosing that they are not willing to negotiate for any fix-it credits.
What Types Of Houses Are Sold “As-Is”?
Many homes that are sold as-is are in need of repair. By selling as is, the seller is making the decision to sell the home for a lower price than if they were to fix up the house before putting it on the market. This may be because they are unable to afford the cost of repairs or that they just don’t want to put in the effort to get it done.
Foreclosure or Inheritance
The house may also be sold as-is if it went through a foreclosure or if the owner died and the house was inherited by someone that doesn’t know its needs and just wants to sell it. Often, inheritors don’t want to take the time to learn about the house’s issues or to fix it up to be ready to sell.
Whatever the home seller’s reason, it is safe to assume that a house sold as-is will need some degree of reparation, but will also be sold at a price that is lower than the regular area’s market.
Keep in mind that the seller still has the legal obligation to disclose any problems that they know about, and in an “as is” home, that can be a very full list. It’s a good idea to get a home inspection done prior to the sale so that you as a seller have a factual basis for the value of the home.
Some sellers are confused about the logistics of an as-is sale, thinking that they can just sell the home without sharing information about known problems. On the contrary, with an as-is house sale, the seller must disclose any issues that they know about, including structural defects, termite damage, electrical or plumbing issues, mold, leaks, and more.
With the as-is sale, the seller is essentially saying, “These are the problems I know about. I am not fixing them. There may be more problems that I don’t know about. The sales price reflects these issues and they will not be factored into negotiations.”
However, each state has its own laws regarding disclosures, so be sure to double-check the specifics of yours. For example, in Massachusetts, sellers do not have to offer information about the home’s defects, but they must answer truthfully if asked about them. Their realtor, on the other hand, is legally bound to disclose any known defects.
Is An “As-Is” Sale Right For You?
When getting ready to sell their house, many people go back and forth between whether they should talk to a contractor and get going on repairs or whether they should just sell their house as-is. There are both positives and negatives of selling your house as-is, so it’s important that you determine beforehand which best suits your needs.
The Positives Of An As-Is Home Sale
There are a number of benefits for sellers of listing your home as-is. These benefits include:
Saving Money On Repairs
When you list your house “as is,” you won’t have to put all the money into prepping your home for the sale. The cost of home renovations and repairs adds up swiftly and can leave the seller strapped for cash. That can lead to a number of troubles and stressors while trying to sell the house.
Consider the fact that renovating an old home typically costs tens of thousands of dollars. For those who don’t have the money to dish out for these renovations or for those who don’t anticipate making that money back in the sale, selling the home as-is could be a great option.
Selling A House Quickly
With an as-is sale, your house can close fast. In fact, a fast sale is one of the greatest benefits of selling a home as-is. It takes about 6 months on average to renovate a home with the most basic renovations, and then another few months to get the home on the market and sold. If the house needs major renovations and repairs, the time frame jumps to a year or more!
However, when you are selling the home as-is, the time frame is greatly reduced because you’re saving yourself all the time that would be spent on the renovations. In fact, you have the potential to get your house sold in just a few weeks if you sell it as is.
For someone that doesn’t have the time to renovate before selling, or for someone who just wants to get the house sold fast, an as-is sale might be a great idea.
Less Stressful Sale
There is no doubt about it; selling a house is stressful. Add home renovations to that and you have the makings of one of the most stressful years of your life.
Consider these stress-inducing facts that are normal with home renovations:
- If your home is a fixer-upper and you have no idea where to start with your renovations. Too many choices lead to a lack of action. When you have a large renovation to get going, you’ll get stressed out trying to decide what to start on.
- Your home improvements and renovations are going to cost a lot of money. Spending money causes stress for just about anyone. Large expenses cause even more stress. Home renovations cost a lot of money and therefore equal a lot of stress.
- One renovation reveals another problem. It’s very true that as you’re dealing with one problem, another will be unveiled. The common saying, “Ignorance is bliss,” is oh so true.
- When you begin to discover new problem areas, the ignorance will fall away, and with it, the bliss. Stress is what will remain.
- Personal and family time is greatly reduced when your home is undergoing renovations. This is because you will need to be around to oversee the work that is occurring. Not only that, but your home is being uprooted, leaving you often with nowhere to go.
- Contractors. Let’s face it; contractors can be difficult to work with and can cause a lot of stress. Depending on your relationship with the contractor, they may end up causing more harm than good, as well as racking up a ton of not-factored in expenses that you’ll have to take care of.
Foregoing renovations and getting right to selling your home is likely to keep a lot of the usual stress of renovating and selling a home out of the way. By selling your home as-is, you are creating a much nicer and peaceful experience for yourself.
The Negatives Of An “As-Is” Home Sale
While the positives of selling your house as-is may look great, there are a number of things to consider when determining whether or not it is truly the best route for you to take.
Most people want a nice, move-in ready house when they’re buying a home. That means that if you sell your house as-is, you’re going to have a much smaller market to sell to.
Not only are you going to lose prospective buyers just because they’re not interested in a home that they’ll need to renovate, but you will also lose potential buyers that are unable to buy an as-is home.
If a home needs renovations, you are automatically eliminating certain types of buyers, including:
- Buyers with certain financing such as conventional financing. These loans require that the home they are lending money for doesn’t have any notable problems. Even simple things like broken window panes and an old roof can keep a home from receiving financing. If you’re selling the house as-is, you will probably have to undergo a cash-only sale.
- Buyers that need to move in immediately upon closing. Some buyers don’t have the time to renovate after closing, they need to move in right away. While some people won’t mind moving in and renovating at the same time, the majority will be looking for a move-in ready home.
- Buyers that just want to buy a nice home and have no desire to do repairs. They may be able to pay in cash, they may not need to move in right away, but these buyers still have no desire to do repairs. They are just looking for a nice home to buy. They won’t even give your as-is property a glance.
- Lower selling price
If you sell a house as-is, you might have to set a lower list price. Even if other homes in your neighborhood are going at a high rate, you will need to ask for a lower price. The new owner will have to spend plenty of money on repairs, so spending less on a house is definitely in the cards.
It is really the give and take of an as-is home sale. You don’t have to spend the money on repairs, however, you have to list your home at a lower selling price.
The Logistics of Selling A House As-Is
Depending on the type of property you own and the general condition it’s in, there may be a few different approaches you can take to an “as-is” sale.
Home Repairs & Cleaning
One of the biggest reasons that someone would be interested in selling a house as-is would be to avoid costly repairs and cleaning bills. For example, if you were to inherit a downtrodden property, it might just be easier to try and sell the property as opposed to putting time and money into repairs.
However, it’s important to understand that someone will need to make the repairs, so if you do not, those costs will be reflected in the sale price. Without making major repairs and renovations, you should expect to receive considerably less for the sale of the home.
While you may not realize it, a little work can go a long way in improving your home’s value. Mow the lawn, paint faded walls, and clean up the property! Put a little effort into making the home look presentable and you’ll almost certainly get a higher price than you would otherwise.
Find A Realtor Or Home Investor To Determine A Price
When selling your home, it’s good to get estimated values from a few sources. Interview local realtors and check out their stats online. Find someone that you mesh well with, who is skilled in selling as-is houses.
Look into your local market with your real estate agent and determine the best price point for your house. Realize ahead of time that your price will be lower than other similar houses in your area, but that was a decision you made in order to sell as-is. It’s also a good idea to understand the typical fees for selling a house and factor those into your profit margin.
If you have experience in real estate, you can always attempt a “for sale by owner” scenario. If this is your plan, it’s a good idea to hire a home inspector to give you an idea for the general costs for repairs and any damage you’re not aware of.
You can also schedule an inspection with a local home investor like SFL Partners. Local home investors will be cash buyers who will make a fair, no-obligation offer on your home in about 24 hours. In many cases, this will be a considerably faster and easier sales process than the traditional real estate route.
Selling A House As-Is To SFL Partners
If you currently own a property that may be a challenging sale and you’d like to try and sell it as-is, you always have the option of working with a cash home buyer like SFL Partners.
Whether you don’t have the money to make the needed repairs, or whether you are just looking for a quick sale, an as-is sale can be a great decision.
If you’d like SFL Partners to make a fair, all-cash offer on your home, contact us today. We buy houses all over South Florida in any condition. Simply fill out our quick form and one of our team members will be in touch in about a day.