What Does It Mean To Sell A House As Is?
When an agent lists a house ‘as is,’ this means the vendor or homeowner is selling the home in its current condition–with no renovations, repairs, or improvements prior to the sale. Most people list their property ‘as is’ because they can’t afford to do the work and they need to sell the house as soon as possible. In other cases, the property might be owned by the bank or the owner may have passed away, leaving the house in the estate agents’ hands.
Selling ‘as is’ doesn’t actually change the rights of the buyer though. The seller still has to legally disclose any problems or issues with the property and the buyer can still opt to negotiate the price down, which is dependent on a real estate inspection.
Furthermore, selling ‘as is’ can mean a lot of things to different people. For many, ‘as is’ sale is stress-free and implies an easy transfer of property–you move your stuff out, leave the key on the front mat, and then you’re done.
For others, however, this might conjure up an image of a creaky old shack that a desperate vendor is hoping to cheat out an innocent buyer with. So, how do you sell a house in poor condition? You can do so by getting in touch with a local real estate agent and getting as much advice as possible.
At the end of the day, the truth lies somewhere between the two, and each situation is going to be different.
Pros and Cons
There are pros and cons to the sale of a house ‘as is.’ The big thing is that it all comes down to its cash value.
If the house is listed at a low price, this might mean it’s a possible fixer-upper, which means there’s a chance for a return investment. The buyer could purchase the house, fix it up, and sell it again to make a profit.
Selling ‘as is’ can also save you time and money. This is because you don’t have to put any effort into fixing things up or even staging your house for sale. You can leave all that worry behind. To illustrate, the average renovation cost for a 2,500 square-foot-home ranges between USD$150,000 to USD$200,00. That’s a lot of saving you could have, especially if the market is unsteady as it has been before. This could be money wasted if you then have to lower the price because no one is buying.
The cons to selling or buying a house ‘as is’ are the obvious ones–no one might want it and the work is just too much. Any number of things could be wrong with a house if it’s not properly inspected and, sometimes, they still arise even when it’s inspected. A buyer might think they’re getting an awesome deal, but, in reality, they could be throwing away their savings.
It can also be hard to sell a house that needs a lot of work, too. Some people will throw in low-ball offers that you might not be able to accept due to your own financial needs. Also, the work that needs to be done can scare some buyers away, but the trick to selling an ‘as is’ property is all about the right buyer.
These properties can be quite desirable for people looking for a renovation or a DIY project. Some young families these days prefer to buy the worst house in the best street and fix it up themselves. These older houses that need a bit of work done tend to be placed on bigger lots, hence they have more scope for potential than new builds do.
Developers could also be interested in buying a home ‘as is’ because they’re not really interested in the house or its condition, but they want the land. Regular buyers could be thinking this, too, especially if they have the means to renovate; they might also consider tearing the house down and starting over.
Hence, if you do have a great block of land, this might be the focus or the selling point and the price should reflect this.
Wanting To Sell “As Is”
If you’re interested in selling your house ‘as is,’ here’s a list of things you could do:
- Seek advice from a real estate agent as they’ll know how the market is moving and will be able to evaluate your home based on its current condition. When it comes to selling tricky properties, sometimes, it’s all in the agents’ hands. This is because it’s less about the actual property and more about convincing a buyer why the property is right for them.
- Have your home inspected before you list it. You want to know everything that’s wrong with the property and have an estimate of all the costs that may be needed to fix it. This will help you deflect any curveballs a buyer might throw your way. It can help you determine the price, too.
- Disclose any defects the house/property has. Be up-front about the condition of your house, if you want to sell it to someone who wants to do it up, they are going to benefit from knowing all the problems. You also don’t want to get into any legal trouble by not disclosing everything to your real estate agent and buyer.
- Set a realistic price. Don’t stick your head in the sand and price too low and don’t get lost up in the clouds and price it too high. Take the advice of your real estate agent and calculate the price to fix up the place before settling on a figure.
Selling or buying an ‘as is’ home can be a tricky business. The seller usually wants to get rid of the property fast and the buyer usually wants to have all bases covered before they make any decision. If done right, the process can be made easier for both sides.
Ensure you understand the value of the property, the climate of the market, and what you’re willing to compromise on, both as a seller and a buyer. You want to go in with your eyes open; knowing all the facts before you settle or make your purchase.