2 Things to consider when selling your home “AS IS”
By Beth Flynn
You may have heard of homes being listed and sold in “as-is” condition. Sellers will often put their homes on the market in as-is condition when they lack time or simply don’t want to do repairs prior to closing. It means that the seller doesn’t need to make sure everything is in working condition, and they’re not required to provide a Seller’s Disclosure.
So, as a seller, “as is” can be a solution when you have a lack of funds for repairs and if you need to move quickly for reasons such as job relocation or other urgent issues. Be aware, however, that “as-is” condition mentioned in a listing can raise red flags with both buyers and their agents. Here are two important things to think about when considering selling your home “as is:”
An as-is home depletes your buyer pool.
In today’s real estate market, buyers are often drawn to clean, move-in-ready, no-major-repairs-needed homes. With construction and material costs being extremely high, sweat equity doesn’t get you as far as it did 20 or 30 years ago. So, when people buy a fixer-upper, the amount they will have to invest is much greater than it once was.
From a lender’s perspective, FHA mortgages will often require buyers to have certain work done and brought up to code before approving a loan. This can often be a large sum of money upfront to make these fixes and improvements. Even buyers using conventional loans may be turned off from looking at the house because of the repair requirements. This is more likely if the repair is a major item like plumbing, electrical, or a roof, for example.
All of these issues can be scary to buyers, and can lessen the number of buyers seriously interested in your home.
An as-is home may not fetch your asking price.
Many would agree that buying fixer-upper homes that need a lot of TLC are a good investment, because you can often pick them up under market value. And if you’re planning on selling your home “as is,” this is something for which you should be prepared.
It probably makes sense that a home listed for sale that needs a ton of work most likely won’t get market value in a sale. In the last point, I mentioned that your buyer pool is now smaller. The remaining people who are interested in your home are aware of the work it needs, and probably hoping for a bargain. This group includes those willing to put in the sweat equity, as long as they can get a good deal and have money left over for improvements, and investors. So, when selling “as is,” be prepared to sell your home for less than you may have hoped to receive.
Before making the decision on whether or not to list your home “as is,” let’s talk. I have over a decade of experience as a Realtor and can help you navigate the entire real estate transaction process from start to finish.