How To Sell Your House As Is?
Selling a home is a significant decision for most homeowners. Due to the immense effort and disruption to your life that it takes to put your house on the market, homeowners want to close a deal as fast as possible and at the highest closing price. Getting your house in order, however, is not the most appealing task and your home also may have some significant repairs needed.
That’s where selling your house as-is comes into play. By selling your home in the current condition it is in, you avoid the hassles of haggling over every imperfection to your home scheduling contractors to make necessary repairs (if you have the available funds).
In this article, you will learn some of the most important things to keep in mind to sell your house as-is.
Misunderstandings about Selling Your Home ‘As Is’
First, selling your home “as is” immediately suggests to buyers that something is wrong with the house. This immediately signals that buyers will need to do work to bring the home up to a liveable condition - especially if they plan to flip the property to new buyers or inhabit it.
Not all homes need to be sold as-is. Most buyers who purchase homes realize that they will have to put in repairs after the previous occupants move out. Unless your home has significant repairs, you can wait until the negotiation phase of closing the sale to drop the price and make concessions to arrive at a final closing price.
As-is homes are usually sold to prospective buyers with an inspection contingency, which gives buyers a built-in window to walk away if they discover a previously-unknown issue with the home. This can create delays if the buyer finds something during a home inspection, forcing you to relist the home (and inviting low-ball clients to believe that your home isn’t worth as much after a price-drop).
Find an Experienced Real Estate Agent or Go the FSBO Route
When selling your home as-is, there are two options to choose from:
- Hiring a real estate agent to sell the property
- Selling the home as a “FSBO” (For Sale By Owner)
As-is homes can be difficult to sell, so real estate agents are able to connect buyers that you may not have the ability to reach. They handle the marketing of the property, including taking pictures, hosting open houses, placing the listing on an MLS, and so forth.
Real estate agents have a fiduciary duty to their clients, which means that they are contractually- and ethically-bound to act in your own best interest. Having a trusted 3rd party to seek advice from can be a great advantage, especially if they can point to repairs that need to be performed for a higher closing price or ways to attract more buyers. In return, real estate agents take a commission percentage of the sale home sale - usually between 3 - 6%
On the other hand, selling an as-is home as a FSBO circumvents commission charges and gives you more control over the home-selling process. Still, you will be tasked with everything you need to do to reach buyers for your home. Depending on the amount of energy and free time you have, this can either be a money-saving endeavor or a disaster.
Find a cash buyer who purchases homes in “as-is” condition
One way to expedite your home sale is to find a cash buyer. Cash buyers typically run contracting and real estate businesses, using as-is homes as a way to turn a profit. They can quickly evaluate your home’s value and provide a check in a matter of days, reducing the time your home is on the market. Cash buyers also don’t have to wait for approval from a lender, which cuts out another potential delay if their loan isn’t approved.
To find cash buyers, it can be as simple as putting your home on all of the advertising channels you can. Even a sign at major intersections or in your front yard can attract a buyer. However, if you want to find a direct real estate buyer, consider signing up with a platform like Simple Sale. Through Simple Sale, those looking to sell their home gain access to the largest network of cash buyers in the United States.
Provide Full Disclosure to Potential Buyers
If you’re choosing to sell as is because of significant issues with the house, you must disclose that information to buyers. Most states have mandatory disclosures that need to be followed - failing to disclose information is a big risk, potentially holding the seller liable after the close of escrow. Being honest about your home’s issues is a better strategy than hoping that a homebuyer doesn’t discover a problem with the house and may help you avoid going to court for these costs.
Determining an “As-Is” Price
If you’re selling an as-is property, you can already assume that it will go for less than comparable properties on the market due to repairs and features of the properties that may turn off buyers. Lower-priced homes generally sell for less over time
To arrive at a price once you’ve found comparable properties, make an assessment of your home and itemize each repair. For instance, you may need a new flooring in your basement, costing $5000. Subtract this amount from the basic home price and repeat the process for any other repairs.
Also, expect buyers to factor these repairs into the final asking price, so it doesn’t hurt to underestimate costs and allow the buyer to negotiate the home to feel like they are getting a deal. Depending on the expertise of the buyer, they may accurately assess the cost or feel that they can reduce the cost by putting some “sweat equity” into the home to improve its value down the line.