BY ANNA & MICHELLE
A person’s decision to sell their home comes with a lot of other decisions causing an owner to stress or procrastinate. Early in the process, the owner will consider selling the home “as is” to avoid the looming issues that accompany selling a home.
From a seller’s standpoint, “as is” means the buyer will purchase the home in its current condition without asking for any repairs. While it is convenient for the seller to take this approach, the normal trade-out is the property will not result in the highest possible sales price.
Regardless of how the home is sold, the seller is required to disclose all defects, which include repair history, condition of systems and appliances, water damage, pest infestation, radon, and other things that affect the value and livability of the home.
From a buyer’s point of view, they may think there is something wrong with the home, which could result in them avoiding the home completely or making a substantially lower offer to cover not only the known issues but also the unknown ones.
It would be reasonable for a seller to allow a buyer to make inspections to determine what the condition of the home is and what kind of expenses they might be faced with. In some situations, based on provisions in the sales contract, the buyer, after making inspections, may decide not to continue with the contract, which could extend the marketing time for the seller by having to find another buyer.
Selling a home “as is” is like wholesaling the property. A comparison could be trading your car to a dealer when buying a new one. The dealer will usually give you the best price for the new car but won’t offer you a retail price for the trade-in. If the dealer were to give you a “retail” price for the trade-in, they would probably expect a “retail” price for the new purchase.
Even if the seller doesn’t want to go through the effort to make major improvements, they still need to consider things that will ease the buyers’ concerns about the home. These include a thorough cleaning, decluttering, yard cleanup, and repairs on known issues like leaking faucets, lighting, doors, and appliances, to name a few examples.
If this path is taken, the cost to the seller will be not realizing the maximum sales price compared to comparable homes that have sold recently in the area that have been updated.
Sellers Pros & Cons
- Not spend money to prepare the home
- Won’t maximize proceeds from the sale
- Could sell quickly if priced properly
- May take longer to sell
- Effort finding/negotiating with contractors
- Investors looking to make a profit
- Making decisions on what the public wants
Buyer Pros & Cons
- Lower purchase price
- Less competition from other buyers
- Financing could be challenging
- Looking for an opportunity to build sweat equity
- Improve the property to your preferences
- There may be hidden problems
There are companies who will buy your home for cash. Their ads are very appealing to sellers because it solves their concerns about putting the home on the market. Realize these companies are not charities but “for profit” who expect to be able to recoup the money paid to you, pay all repairs, renovations, and sales expenses plus make a profit for the risk taken.
As a homeowner, you will always realize more of your equity by approaching it with a risk/reward analysis to determine how to sell it for the highest price with the least expenses. Your real estate professional will act as a fiduciary to put your best interests ahead of their own. It is worth the effort before embarking on an “as is” scenario.
