Sell Your House AS-IS and FAST!by Hailey M. We Buy Houses that are Ugly or Old. Sell your hous
Most sellers just love the idea of selling a house as-is. Indeed, this kind of deal relieves them of the obligation to fix what is broken or malfunctioning around their property. This does not mean that a homebuyer cannot use or live in the house unless they make the needed repairs.
However, not fixing the place up and listing a property with the term “as-is” does raise a red flag for some people. Others, though, see it as a great opportunity to get some money out of buying a house as-is, renovating it, and reselling it at a much higher price.
Here are all the details about what exactly “as-is” truly means, how to sell a house as-is, why even bother getting into this kind of deal, what are the drawbacks of selling a house as-is, and many more.
What Does It Mean to Sell a House As-Is?
Technically speaking, this means that you, the homeowner, are selling the house in the condition it is at this given moment. It also means that you will make no improvements or repairs before the sale. Plus, that you are NOT open to negotiations that have to do with lowering the asking price, so the buyer can make the needed fixes themselves.
In simpler terms, when potential buyers see a property-for-sale listed with “as-is” in the description, they know that the house is not move-in ready and probably far from perfect.
Why would a seller want to sell their house as-is? For a number of reasons:
They may be at a tough spot financially and cannot afford to fix any flaws before putting their property up for sale.
The house has been through foreclosure, and now the bank owns it.
The seller has died, and the inheritors are now trying to get the house off their hands and just move on.
A real estate agent desperately needs to sell the property.
Note: Listing a home “as-is” does NOT alter the buyer’s legal rights in any way. The listing agent is obliged to disclose any issues with the house that they are aware of. More on that below.
How to Sell A House As-Is
The process of selling a house as-is does not differ much from the one involved in selling a standard home that needs no repairs. The only thing you don’t need to worry about is staging your home to make it more attractive to prospective buyers. Now, when it comes to selling your home, you should consider these tips:
Work with a local real estate agent. Remember that realtors live and breathe real estate, so they know everything there is to selling and buying properties. They will help you set a realistic price, do a CMA (comparative market analysis) to figure out how much similar homes in your area are sold (so your property does not sit on the market longer than necessary), and also give you access to an MLS (multiple listing service). An MLS is an exclusive real estate pros-operated database with homes up for sale. Having access to it means that you can get connected to the right buyers – the ones solely interested in buying a home as-is.
Be honest. There is no point in hiding defects. Potential buyers will want to (and should) know where they will be getting themselves into after purchasing your house. Therefore, ensure you provide them with a disclosure report that lists the problems, according to your state’s regulations. To make sure you comply with the applicable laws, consult your real estate agent, who will tell you what details you need to disclose. Note that some states let the buyer beware (the so-called Caveat Emptor rule), which means that the buyer performs due diligence prior to making a purchase. Some of the issues you could be asked to state are mold, water intrusion, electrical problems, plumbing issues, and foundation damage.
Get a home inspection. Before you list your property, do get a home inspection done to avoid being sued for violating your state’s disclosure regulations. This usually costs around $300. On top of that, providing prospective buyers with both a home inspection report and a disclosure report based on the home inspection shows that you have nothing to hide. This, in turn, boosts your chances of selling your house faster.
Get cost estimates. Get local contractors to give you accurate cost estimates of the fixes and repairs your house needs. Although you are not obligated to fix anything, cost estimates increase your negotiating power in case the potential buyer tries to make a real low or otherwise unfair offer. At the same time, knowing how much some repairs will cost gives you the chance to see which ones (if any) fit within your budget. Addressing a problem, indeed, raises your chances of walking away with a more profitable deal.
Be realistic about the asking price. There is no need to start your listing with the house defects, which will most likely scare potential buyers off. Instead, it is time to market the selling points of your property (the positive features of your home), such as the floor plan, size, and location. That way, you will be able to price your property with confidence while sending further away the possibility of earning an unfair share of the deal.
How to Get the Most Money When Selling a House As-Is
Either because you need to sell your house fast or don’t have the money (or time) to make extensive repairs at this moment, you can still get some good cash from selling your house as-is.
Now, you have two options here: (1) complete some home improvements or (2) sell the house without making any repairs, even those that can be done on a short timeline.
So, you could:
Choose your battles – Problems like a furnace replacement, leaks, mold, and foundation damage are some of the most common deal-killers that put off buyers. You could make working on getting these serious issues fixed a priority if your time or budget is limited. Or, you could decide to spruce up your home and address minor cosmetic repairs, which will improve your curb appeal greatly (and are usually the most cost-effective renovation ideas). Some easy upgrades are having the carpets professionally cleaned, replacing bulbs, caulking in the kitchen and bathroom, applying a neutral fresh coat of paint, and improving lighting.
Reject low ball offers – If repairs are out of the question, it is paramount to understand your market and not feel that you have to accept an offer from a buyer that will try to lowball you. Establish a floor price that you feel comfortable with and ensure that your numbers are reasonable (you can confirm with your local real estate professional).
Set your asking price low – This will encourage several different bids, and more interest, come your way. Although this may sound bizarre, it actually works. Most of the time, a bidding war starts when a seller sets their price slightly low, which can help you net more money in the long run. Just ensure that the local market is ready for such a “war” before you set the price low (again, you may confirm with a local realtor).
Skip renovations – There are plenty of investors and cash buyers out there who will pay cash and buy your house directly. This allows you to bypass the whole listing process while also enabling you to skip the renovations. Most of the time, you will be called to have a home evaluation arranged by these types of buyers (no cost passed on to you) before they close the deal with you.
Note: Undeniably, the value of your property increases if you are able to tackle the big-ticket items – you will be able to ask a higher price for it, which will cover the money you spent on the upgrades. This will also help you avoid price reductions during a post-inspection. Some of the home improvement worth doing are:
Installing a new water heater.
Updating the HVAC system and/or the electrical panel.
Repairing the septic system/sewer connection/pipes.
Replacing the roof.
Addressing water damage, mold, or termite issues.
The Pros and Cons of Selling a House As-Is
You may want to consider to sell your house as-is if you really cannot afford to make any repairs needed yourself. So, if your financial situation does not allow you to fix defects in the house, yet still need some (relatively) fast cash, putting up your property for sale as-is is a choice you could think about.
Nevertheless, do speak with your realtor, as they may suggest alternative options and creative solutions to avoid putting “as-is” in the listing from the start or even avoid selling your house as-is.
Selling your house as-is enables you to skip the stress of a home sale. You don’t have to deal with things like showings and the other tasks involved in the selling process. Not to mention the fact that you can always contact an investment company, which will buy your house and save you from the serious financial distress you are experiencing. Such companies will even buy your house with cash if they consider it to be a good deal.
Of course, selling your house as-is also means that you should be prepared for some negative thinking about the condition of the property. Buyers may assume that there is something considerably wrong with the house – even something not fixable or too costly to repair. They can’t help wondering and losing their sleep on whether they will be throwing their hard-earned money into a black hole, even though this may appear as a killer deal to them.
Also, expect some low ball offers from buyers that will try to purchase your house at an unfair (for you) price. And, let’s not forget that you cannot expect as many buyers as if you listed your house without the “as-is” term.
What Do You Need to Disclose When Selling a House As-Is?
Latent property defects are a must-include when selling a house as-is. This becomes particularly critical when your house is in need of work due to hidden problems (i.e., foundation issues). Trying to conceal such issues intentionally to get more money into your pockets will probably put you into a tight spot as you may be called to pay for the repairs and all other costs for damages done due to undisclosed defects.
Overall, anything that might affect the value of your home should be disclosed. On top of that, many states consider it illegal to hide major property issues deliberately while others (see Florida) have already started making real estate disclosures in writing a requirement for property owners. That being said, you do NOT need to hire an inspector to list any potential flaws – just list the defects you personally know.
It is best to have everything out in the open, from problems involving appliances, systems, structures, and sinkholes to flooding, drainage, pests, and pools. Remember that written disclosures provide stronger legal protection. Nevertheless, do contact a local attorney to find out the applicable state laws.
Some recommended disclosures are:
Deaths on property
Disruptive or noisy neighbors
Infestation (i.e., termites)
Should You Repair or Update Anything Before Selling Your House As-Is?
To decide which option is best for you, we suggest weighing the cost of the proposed fixes or improvements against the market value of your property after these (the repairs) are completed. If the upgrade is expected to return the investment, then you could probably consider making it. At this point, let’s pinpoint that you will get the highest returns from projects like bathroom or kitchen remodeling rather than, say, installing skylights. Most of the time, simple tasks such as replacing outdated hardware and painting your cabinets a darker shade will do the job just fine.
Then, consider that irrespective of what homebuyers say they really want (fixed up properties or fixer-uppers), in reality, they are all looking for homes in need of cosmetic or minor repairs (i.e., replace light fixtures or put in new carpeting; not move walls) unless they are pros that buy properties, fix them up and resell them for a profit. Also, remember that fixer-upper buyers tend to discount the price of the property so they can have room to pay for repair costs. Then, they discount it a tad more just to save some more money, especially when the competition is fierce in the area (lots of similar houses on sale).
Generally speaking, a few fix-ups will help increase the asking price if your real estate market is steamy hot. In slow markets, buyers may not even bother looking at properties in need of upgrades or repairs. You can ask your real estate for advice on the market pulse.
Bottom line, you could work on things like repainting marred walls with an off-white hue, fixing broken appliances, patching cracks in the walls, repairing leaky faucets, changing dated ceiling fans, and replacing a stained carpet, old drapes, or battered furniture. Make a list of what is worn out, broken, or defective and do consider making minimum improvements before selling your property. Have code violations? Address them immediately. Any decent buyer serious about purchasing your property will have it inspected.
How to Market Your As-Is House for Sale
Knowing how to help prospective buyers to find your property-for-sale is key here. So, your first marketing steps would be to hire a pro photographer to showcase the most attractive features of your home (you may use your own skills if you trust your talent in photography). A video walk-through is another great and highly effective way to attract the desired audience’s attention (and lead magnet). Finish these first steps by creating an engaging home description.
Get your property listed on your local Multiple Listing Service (MLS). Although it is provided to realtors and brokers, you can still get your property listed without a full-service agent. You may also consider utilizing the Flat Fee MLS service that enables you to list your website on the MLS, along with your details and name for prospective buyers to contact with. Or you may have a discount broker get you on the MLS while also handling some admin and marketing tasks on your behalf (i.e., schedule showings) with low commission charges.
Leverage the power of social media and get your property in front of hundreds, if not thousands, of highly targeted buyers that live near you (or are interested in relocating to where you are and are looking to buy a home like yours). Facebook (Marketplace, organic posts, and ads), LinkedIn, and YouTube (for, say, photo slideshows and video walkthroughs) are some of the platforms you can use to spread the word out. You may need to use the proper local keywords, though, to attract the right buyer persona.
Online real estate portals are a superb means to sell your home “as-is” without a realtor. Some websites worth checking out are Zillow and Trulia.
Selling Your House As-Is to a Cash Buyer
House flipping is a common practice among homebuyers that look into purchasing a house as a business opportunity to make money. This particular type of investor is interested in buying bargain properties, making all necessary repairs, and reselling them at a much higher price to make a good profit. Besides house flippers, though, we see the rise of a new trend, called online direct homebuying. In this case, companies and industry giants purchase properties directly from sellers, which allows them to speed up the process and make the sale easier than any other time.
As with every decision you make, there are some pros and cons. Therefore, selling your house in “as-is” condition for cash is a good idea because:
It is much faster than going down the traditional road with For Sale By Owner (FSBO) or with the MLS and an agent, where you may get some pretty good offers if you have priced your home right. Whether they are the kind of deals you wish is something entirely different, though, as it may take months before any decent offers come your way. On average, homes for sale sit on the market for around 30-40 days. When selling a house in as-is condition, the process is conducted within a few days (from start to finish), which is perfect if you want to sell and close on your home very quickly. Online direct homebuyers will make an offer worth considering in just a matter of hours.
You don’t need to do any fix-ups, which is excellent if you lack the required cash to make the repairs to boost your property value or are in a hurry. You will still have to disclose any problems or defects you are aware of, though. Getting them fixed, however, will be the next owner’s concern.
Your sale is not tied to contingencies, such as a mortgage contingency, a home inspection contingency, and an appraisal contingency unlike a traditional property sale. Prospective buyers may even ask for a home sale contingency, especially if it is a buyer’s market. This means that you won’t be able to go through with the sale of your home until they sell their own property, which causes a great deal of delays.
On the other side, selling your home “as-is” for cash will not get you top dollar for your property. Both online and traditional investors purchase properties to make a profit by reselling them, which means that they want to buy low and sell high. So, you may expect a cash offer that is below the market value of your property. Now, if you factor in all the relevant costs of repairing your home and selling it via a realtor while paying commission fees, this may not be a bad option.
As a final notice, always ensure you work with reputable house buyers that make cash offers to avoid being scammed. You need to be certain that the cash buyer, indeed, has the money they are offering. This could be achieved by asking for a proof of funds letter from their bank or a bank statement. If you decide to go down that road, perhaps it would be wise to negotiate a lease-back. That way, you will have your time to organize your moving out of the home.
Should You Buy a House That’s Selling As-Is?
It depends on several things. For instance, are you willing to spend some money to make the needed repairs? Do you also have the funds for an appraisal and an inspection? Are you prepared to deal with a major system or structural damage? Can somebody provide shelter if your place is uninhabitable? Do you know an individual with experience in “as-is” sales (a professional realtor, preferably)? Are you buying this property as an investment, a second home, or a first property? Providing positive replies to these questions (or most of them, at least), probably means that an “as-is” house is perhaps a good choice for your case. However, do consult a realtor or financial advisors before you make any move toward purchasing the home.
Also note that a house that is sold “as-is” does not necessarily need to have a defect. The trained eye of a professional inspector will help determine that. And if you’re in California for example, be sure you get a detailed Real Estate Transfer Disclosure Statement (part of the California Civil Code 1102), which addresses nearly every single defect with the home, including lawsuits against the property and the presence of contaminants (the seller is required to provide you with it). In general, everything from loud neighbors to roof leaks should be disclosed from the seller when selling a house “as-is”, which absolves the seller of any liability. If you find out about a problem with the house that the seller has intentionally hidden from you in the Disclosure Statement, you may file a claim against the seller.
Who can I sell my house As-Is and fast too?
Do some research. Cash home buyers buy for cash all the time and in doing so help homeowners who need to sell their house fast.
Created on Dec 2nd 2020 16:49. Viewed 155 times.
No comment, be the first to comment.