Friday, March 29, 2019 / by Harvey Rosenberg
Should You Sell Your Home "As Is"?
Selling a home as-is may seem like a viable option to get out of repairs or other general obligations, but is it the right thing to do? It may seem like the easier choice, but there are some drawbacks to selling a home as-is.
First, selling a home as-is means that you are selling the property in its current state. It's usually defined in the purchase agreement what the current faults and issues are. Additionally, an as-is sale usually means the owners are not responsible for any repairs or faults found in the home by a home inspection.
However, that does not mean the owner can fail to list any known issues with the home. For example, if the roof leaks and you know about it, you must be honest when asked.
Plus, a licensed realtor will need to disclose any defects or structural damage to the home.
There are pros to selling as-is. While it's not the most desirable way to sell a home, there are some benefits to an as-is listing.
Financial Hardship - if you need to get out of home ownership and you can't afford to make the repairs, selling as-is may help you sell the home faster, albeit at a lower asking price. It will be below market value, but you won't need to fork over the extra cash to fix a roof, for example.
Quick Sale - Investment companies looking to flip your home will be interested in the quick sale. If you are in a situation or unable to deal with the drawn-out sales process, this may be the way to go.
It's all about perception, and if a buyer sees an as-is, they see a fixer-upper. They know there will be additional dollar signs behind the repairs and updates and will attempt to drive down the price. Again, if you're in a situation that you need to get out of quickly, this could be the right choice.
This also means more work for you and your realtor. Combating those perceptions from a buyer means you have to prove the home is worth paying for. Fewer buyers want the work that a fixer-upper requires, so offers will not be as plentiful either.
Additionally, situations may arise after the inspection that could lead to more negotiations. That leaky roof may not be discovered until the offer has been made. Buyers and sellers could go back and forth, with a seller stating that no further negotiations will happen.
Finding a realtor that can help you price a home correctly, determine as-is concessions, and negotiate when there's little wiggle room in the budget will help determine a property as-is or not. A realtor knows the market value and can suggest solutions that will help you avoid as-is.
What does Selling As-is Mean?
First, selling a home as-is means that you are selling the property in its current state. It's usually defined in the purchase agreement what the current faults and issues are. Additionally, an as-is sale usually means the owners are not responsible for any repairs or faults found in the home by a home inspection.
However, that does not mean the owner can fail to list any known issues with the home. For example, if the roof leaks and you know about it, you must be honest when asked.
Plus, a licensed realtor will need to disclose any defects or structural damage to the home.
Is it worth it to Sell As-Is?
There are pros to selling as-is. While it's not the most desirable way to sell a home, there are some benefits to an as-is listing.
Financial Hardship - if you need to get out of home ownership and you can't afford to make the repairs, selling as-is may help you sell the home faster, albeit at a lower asking price. It will be below market value, but you won't need to fork over the extra cash to fix a roof, for example.
Quick Sale - Investment companies looking to flip your home will be interested in the quick sale. If you are in a situation or unable to deal with the drawn-out sales process, this may be the way to go.
Why You Shouldn't Sell As-is
It's all about perception, and if a buyer sees an as-is, they see a fixer-upper. They know there will be additional dollar signs behind the repairs and updates and will attempt to drive down the price. Again, if you're in a situation that you need to get out of quickly, this could be the right choice.
This also means more work for you and your realtor. Combating those perceptions from a buyer means you have to prove the home is worth paying for. Fewer buyers want the work that a fixer-upper requires, so offers will not be as plentiful either.
The Home Inspection
Additionally, situations may arise after the inspection that could lead to more negotiations. That leaky roof may not be discovered until the offer has been made. Buyers and sellers could go back and forth, with a seller stating that no further negotiations will happen.
Trusting a Realtor
Finding a realtor that can help you price a home correctly, determine as-is concessions, and negotiate when there's little wiggle room in the budget will help determine a property as-is or not. A realtor knows the market value and can suggest solutions that will help you avoid as-is.
