How Selling A Home “As Is” Can Be Beneficial And Financially Rewarding
Eric Stewart ● July 6, 2016
Do you want less hassle when it comes time to sell your home? If so, you may want to think about selling your home “as is.” Selling “as is” simply means putting the property on the market in its current condition, with few or no improvements. Our NEW As Is Guide provides invaluable tips and suggestions on how to effectively sell your home “as is” while still getting an optimal price. Read on to learn the benefits of selling your home “as is” and how a correct pricing strategy could get you more money than you even anticipated.
There are four primary reasons or benefits as to why sellers decide to sell “as is”:
Low Upfront Expense
“As is” sellers are not expected to spend money on pricey improvements, like updating the kitchen or bathroom, or replacing the windows. Instead, an “as is” seller may choose to not make any repairs or opt to make minor upgrades, such as freshly painting a room or replacing a light fixture. Deciding on some inexpensive repairs may be a good idea and could sell your home faster, depending on your situation and the home’s condition.
Little Upfront Work
As an “as is” seller, you also don’t have to go to the trouble of clearing out your belongings, going into an organizing frenzy, or taking the time for a deep cleaning. With the proper disclosures concerning the state of the house, your marketing will not be any less effective, and the buyers may let you leave some or all of your unwanted stuff behind.
When deceased parents leave their homes to their children, the best way to divide the value of the property is by selling it and distributing the proceeds among the siblings. In such cases, when no one has the time or money to prepare the house, it is best to sell “as is” in order to acquire and disperse the money quickly.
Selling A “Tear Down”
When the land on which your house sits is more valuable than the structure itself, it is typically best to sell the property “as is.” It makes no sense to improve a house that will be torn down for a new structure.
While selling “as is” may be in your best interest, there are a few important things to keep in mind.
Material Defects Have To Be Disclosed
All sellers, even if they plan to sell their home “as is,” are required to disclose known defects about the property and to provide information on any issues that a buyer may ask about, such as termite damage, a wet basement, non-working appliances, plumbing leaks, etc. (for more information on material latent defects, read my previous blog on this topic). Any defects discovered after the sale are the responsibility of the buyer unless the seller had previous knowledge. The exceptions to disclosure law are usually the sale of the decedent’s estate, a foreclosure or a sheriff’s sale.
Buyers Can Negotiate For Repairs
Moreover, an “as is” sale doesn’t mean buyers won’t try to negotiate repairs. Home repairs are subject to negotiation regardless of how the property is advertised. A seller can opt to not make any repairs, but then the buyer has the right to void the contract, assuming there is a home inspection contingency in the purchase agreement and it is done within the timeline reflected in the contract.
The Home Needs To Be Priced Appropriately
If you want to avoid investing money on improvements, your asking price should typically be reduced by the amount it would cost for the future buyers to make their own changes. If the home is in poor condition or has not been updated, most buyers interested in the home will be investors or builders who will look to fix up the home and flip it or tear it down and build a new structure. Real estate investors and builders will want to purchase an “as is” home at below the property’s current market value to ensure they make a profit on their investment. Low-ball offers are not uncommon, but if you have a good pricing strategy, you should not have to sell your home for less than what it is worth in “as is” condition.
So, how can you make selling an “as is” home both efficient and financially rewarding? You need to hire a good Realtor® who has experience selling “as is” homes! A Realtor® can help you decides what repairs/improvements, if any, are merited, walk you through the required disclosure paperwork, negotiate on your behalf regarding any repair requests, and get you the best price possible for your home.
I recently sold an “as is” home in Fairfax Station, VA. The home was originally built in 1976. The owner was a very sweet elderly woman who had lived in the home for almost 25 years. The house, for the most part, had not been updated and still had original cabinetry and fixtures from when the house was first built. Similarly sized, but updated, homes in the area sell for around $600,000.
I advised my client to put the home on the market for $450,000, which was slightly below its market value in hopes that we would attract multiple buyers. The strategy worked! We had over 50 showings the first weekend the home was put on the market, and eventually received 10 offers. The winning offer was for $50,000 over list price with no home inspection contingency (thus, there could be no repair requests from the buyer). My client could not have been any happier. Her home was sold in less than a week (5 days to be exact) for more money than she had expected.
Want To Learn More? Download Your FREE As Is Guide!
If you would like to learn more about selling your home “as is,” download a complimentary copy of our NEW As Is Guide. It provides invaluable insights regarding selling a home “as is,” including how to best market “as is” homes to builders and investors, how to create an annual gift annuity by donating a home to charity, and 10 questions to ask a Realtor® if you are thinking about selling your home “as is.”
If you want to get an idea of what your home may be worth if you sell it “as is” contact the real estate professionals at the Eric Stewart Group of Long & Foster who have deep experience selling “as is” homes and a comprehensive network of builders and investors who are always in the market for “as is” homes.