Submitted by HomeLight
After tallying up the cost of updates and repairs, you’re thinking about selling a house as is. If you have to lower your price, so be it. An old electrical panel, stained carpeting, and kitchen straight out of the ‘90s mean buyers won’t consider the house move-in ready or necessarily pay top dollar. But you don’t have enough money or time to perform a bunch of work, and you’d rather just collect a decent sum and move on.
Together with the help of real estate experts, including agents in the field and investors who regularly buy homes as is, we bring you the inside track on this type of sale, including multiple ways to sell quickly and how to find buyers willing to take on homes that might need a little TLC.
Provided by Selling a House As-Is: How to Skip Repairs and Move On!
Follow along as we cover:
- What “as is” means in real estate
- Must-dos when you sell a house as is
- Your options to sell “as is”
- Pros and cons of selling a house as is
- The final word on selling as is
What “As Is” Means in Real Estate
When you put “as is” on your home listing, what exactly are you conveying to potential buyers? We asked Jena Bebleh, a top San Jose, California, real estate agent at Oldham Group for clarification:
“In an as-is sale, a buyer is purchasing a home in its current condition,” she says. “That may mean the seller won’t do any repairs, even if they come up on an inspection report. The buyer is willingly purchasing the home in its current state with full knowledge of its condition.”
That last bit of her comment is critical to grasp; by selling as is, you aren’t absolved of the duty to share what you know about the home to buyers — and an “as is” label, particularly on an open market sale, is not a fail-safe to avoid all negotiations. You’ll need to temper your expectations a bit.
That said, selling “as is” can still be a viable strategy if you go about it the right way.
“If you own a home that needs several repairs and don’t have the finances, or simply don’t have the time or desire to undergo the stress of home remodeling, selling as-is could be for you,” shares Jeff Shipwash of Shipwash Properties in Knoxville, Tennessee, who flips multiple houses per year and routinely buys properties as-is.
Must-Dos When You Sell a House As Is
In a minute we’ll explore a couple of different ways you can sell your home as is. But before we get to them, we wanted to go over a few things you’ll need to do during any type of “as is” sale.
Selling as-is isn’t a loophole to avoid telling buyers your roof is leaking or the home needs all new plumbing. Most states have mandatory disclosures, and failing to disclose information potentially opens you up to legal liability.
“A lot of sellers say, ‘I’m selling it as-is — I don’t even want to talk about what I got going on here,’” says Edward Kaminsky, a top real estate agent in Los Angeles. “That can come back to bite the seller because if it’s proven that they did not disclose something they were fully aware of, they can be held liable after the close of escrow.”
Every state has its own legal requirements for disclosures, so check with your agent. They’ll be familiar with your state’s disclosure laws and can help to highlight your home’s positives, such as a large yard or great location, to attract your target buyer.
Label your listing “as is”
Unless a listing specifically has the language of being sold as is, buyers are going to assume it’s a regular sale.
“Including ‘as is’ helps your agent connect with the right buying agents in our networks to find the best prospective buyers,” Bebleh says. “The client knows right away the seller won’t be doing any repairs.”
Consider a Pre-Listing Inspection
A pre-listing inspection offers transparency into your home’s condition and is often central to the process of selling as-is. “You’ll receive more non-contingent offers if it’s all disclosed from the start,” Bebleh adds. “Buyers will know exactly what’s wrong with the house and submit an offer based on that.”
Your Options To Sell As Is
You may assume that selling “as is” always works the same way. But you actually have two main avenues to explore: #1) Request a cash offer or #2) Sell as is with an agent. Let’s review both.
#1 – Request a Cash Offer
One option to consider is going immediately to a pool of buyers who aren’t as worried about your home’s condition and asking them: Would you buy my house? Seriously, that is a possibility! Here’s how it works.
Let’s say your house has some pretty major flaws such as a defective roof, leaky plumbing, or foundation cracks. You need a buyer with serious capital who can afford to make repairs and salvage the place.
Or perhaps you’re a seller who relocated for a job so time is of the essence; you can’t afford to risk a drawn-out closing. In that event, requesting a cash offer is going to be the quickest way to sell without all the fuss.
Cash buyers, which can be house-buying companies, rental investors, or house flippers, are well accustomed to buying homes as is — at least compared to traditional buyers. According to a 2020 survey of over 2,000 adults from Coldwell Banker, 80% of Americans say they would prefer to buy a move-in ready home over one that requires renovations.
Approach a cash buyer
Most cash buyers prefer to purchase homes off-market, so you’ll need to go to them rather than the other way around. We’d recommend our Simple Sale platform as a good starting point.
With Simple Sale, you tell us a bit about your home, such as whether it’s a single family or condo and how much work it needs. From there we’ll provide you with a full cash offer within 48 hours.
Skip repairs entirely
No need to call the roof inspector or drain your savings to replace the HVAC. HomeLight will provide an offer for homes in almost any condition.
Sell when it’s convenient
Want to get out right away? Or need a little more time to pack? Either way, we’re flexible. Pick a move date that works for your schedule within 30 days of closing.
Close with certainty
Cash buyers don’t need a lender’s involvement to purchase a home, meaning they can move nimbly and quickly compared to someone who needs financing. In addition, financing issues account for 19% of closing delays as of summer 2021 while processing a loan takes nearly 50 days on average.
Curious to know more about the Simple Sale experience? Hear it first hand from one of our valued clients in the video below.
#2 – Sell As Is on the Open Market
Perhaps your home isn’t a total teardown and you’re willing to see what kind of deal you could strike on the open market. In that event, you can list your home for sale — ideally with a pre-listing inspection and prepared disclosures — at a fair price and try to keep your work on the home to a minimum. In some cases you may want to determine if there are any projects worth tackling, even if it’s a pared-down version than what might be typical for a regular sale.
Hire an agent with ‘as is’ experience
To avoid a bad experience selling a house as is, it’s critical that you partner with an experienced real estate agent who can protect you from unscrupulous buyers and take a hard stance on negotiations.
“In these situations, agents need to do a lot of homework, checking out the buyers’ reputations, looking for ways buyers might try to renegotiate and squashing those efforts, and they need to help their sellers make the right decision,” shares Elizabeth Weintraub, a top real estate agent in Sacramento.
“‘As Is’ to many buyers means only until they squeeze for a bigger discount after a home inspection,” Weintraub warns. “I built my reputation for being tough and for being willing to sell a home a second or third time, if necessary, to weed out the unwanted buyers who were not ethical.”
Factor ‘as is’ into your pricing, but don’t get lowballed
When you market a home “as is,” you can’t expect to price it the same way you would if you’d planned to make targeted upgrades and repairs. However, this scenario also doesn’t require that you accept just any offer or sacrifice a huge portion of value that your house fairly commands.
“The problem is pricing it correctly to reflect the repairs required without leaving any money on the table to maximize seller profit,” Weintraub adds. “We also tend to look for buyers who want to live in the property as the value is typically higher for them, plus we have the feel-good-joy that we helped a buyer get into a home they otherwise could probably not afford.”
According to Weintraub, fixer buyers often try to take advantage of sellers, either through scare tactics like “nobody will buy your house in this condition but me” or pressure along the lines of “this is the best offer and only offer you will get and it expires in 6 hours.” But sellers should enjoy the voice of reason inherent in a good agent, she advises.
Consider high-ROI projects that aren’t much work
Robert Taylor is a real estate investor and rehabber in the greater Sacramento area with over 15 years of experience. He says that you should avoid repairs that will only marginally increase your home’s value.
“I look at repair costs and the home’s future value as a one-to-one relationship,” he explains. “If I spend ten dollars on repairs, I want to see the home’s value increase by the cost of repairs, plus ten dollars. If I spend $20,000 on repairs, I expect to be able to increase my home’s value by $40,000.:
Here are a few smaller projects that would meet Taylor’s benchmark as being worth the investment, even if you’re selling a house as is:
- Spruce up your curb appeal: Top real estate agents estimate that investing $300 in lawn care can add $1,211 in resale value, while the simple act of installing fresh mulch adds an additional $800 in value. Plus, 76% of agents say the top project a homeowner can do to boost the marketability of their home is to improve curb appeal.
- Deep clean and declutter: HomeLight research has shown that deep cleaning, hauling out old junk and furniture, and removing clutter can add over $4,000 in resale value for a few hundred-dollar investment in a cleaning service and dumpster rental.
- Add a fresh coat of neutral paint: Painting your home in beiges or grays depersonalizes your space to attract more offers, and the effort also increases your sale price by an estimated 1%-3%. For a home worth $500,000, that’s $5,000-$15,000 in added value. Remember that 98% of agents recommend you go with a neutral color, so pick a hue like “Agreeable Grey” by Sherwin Williams.
“Small fixes mean a higher price tag for your home,” Bebleh says.
Skip pricey cosmetic updates
Anyone considering making repairs to their home should balance their cost and time requirements against their return on investment, Taylor says. He points out that time is an often-underappreciated factor here.
“If a homeowner is already living in a different home, they need to consider the extra cost of insurance, possibly two mortgages, plus utilities,” Taylor adds. “Sellers often forget that these carrying costs reduce the return they’ll get on their home.”
On Taylor’s list of repairs to avoid are these three notoriously poor ROI projects:
- A massive kitchen remodel will cost you approximately $65,000, according to the National Association of Realtors, and return only $40,000 at sale.
- A complete bathroom renovation will cost around $30,000 and won’t bring a return of more than $15,000 when you sell.
- Finishing the basement will cost about $40,0000 and return only $25,000 on average.
Address ‘deal killers’ if possible
While a buyer may be willing to overlook some cosmetic issues, many won’t be able to look past these big-ticket repairs. If you have the funds, you may want to prioritize these items:
- Structural issues: According to HomeAdvisor, a sinking or settling foundation will cost $2,022 – $7,107 to repair. “It’s a huge can of worms,” Bebleh says. “It’ll really scare off some buyers.”
- Pest infestation: The damaging effects of termite infestations cost an average of $3,000 to resolve. Because the extent of the damage can be hard to see and treating the infestation early is key to mitigating damage, buyers tend to be wary of pest infestations.
- Ancient roof: Replacing a roof will cost $7,000 – $12,000. “While not always a deal killer, I’d say it’s a very large expense that really scares some people — especially first-time buyers.” With a 94% ROI, according to HomeLight’s data, you’re often better off taking this on yourself.
Pros and Cons of Selling a House As Is
Maybe you’ve sold a home in the past and vowed never to negotiate with a picky buyer again. Or maybe you need to move fast and don’t have time to renovate. Whatever your motivation, consider the positive and negative aspects of an as-is sale before you make a final decision.
Pros To Selling Your Home As Is
- Leave the big repairs to well-funded buyers. A fix and flip investor will have the time, expertise, and funds to knock down a kitchen wall and install marble counters in an attempt to resell your home for more, so you don’t have to worry about it.
- Increase your chance of a quick sale. As-is buyers are often cash investors. Without the financing requirements of lenders or the hassle of last-minute repairs pre-closing, you can shorten your closing timeline to as few as 10 days.
- Reduce inspection haggling. On average, buyers negotiate $14,000 in savings based on inspection findings. With an as-is sale, you can try to set an appropriate price discount and communicate to the buyer that you’re not planning to offer further credits or repairs on the home, saving stress during closing.
Cons To Selling Your Home As Is
- Risk of turning off buyers. Some buyers see “as-is” and read “red flag.” According to Kaminsky, the top real estate agent in Los Angeles, buyers tend to feel more comfortable offering a higher price knowing they can ask for necessary repairs during the inspection phase (and you’re not saying upfront that you’re unwilling to work with them).
- Repairs aren’t off the table. Just because you list as-is doesn’t necessarily mean a buyer won’t attempt to negotiate the costs of repairs. Of course, it’s at your discretion to determine whether accepting an offer with a request for repairs is advantageous to your bottom line. If a buyer makes a good offer and asks you to cover the cost of repairing a damaged window, for example, you might do the math and decide it’s a good deal.
- Expect lower offers. This is a major con of selling as-is. “You may not always get the full value of your home,” Bebleh says. “If it’s a quick repair you’re neglecting to make, you could be leaving money on the table by allowing a buyer to devalue your home over minimal cost cosmetic defects.”
The Final Word on Selling As Is
When you’re looking for an easy, low-hassle sale and don’t have a stash of funds in the bank to put toward repairs, you might choose to sell a house as is.
Remember these key takeaways for the sale:
- You’ll likely receive a discounted price. To maximize value, work with an agent who can help you reject lowball offers.
- Explicitly include “as is” in the listing; otherwise, buyers won’t get the memo.
- Order a pre-listing inspection to help with accurately pricing the home.
- Understand that even if you list “as is,” some buyers will try to negotiate on the inspection. Again, a great agent can help you navigate through it.
- Avoid pricey cosmetic upgrades, but know that tidying up and improving curb appeal can go a long way.
- When your house needs a lot of work, most regular buyers won’t be interested as they’re looking to move into the house and start living in it right away. To cut to the chase, you can always reach out to a house-buying company through a platform like Simple Sale and reach your target buyer faster.