If your home has some problems that might put off buyers, selling a house ‘as is’ can look appealing. However, choosing this approach may not prove as successful as you hope.
Let’s look at the essential things to know when you sell a house as is.
What does selling as is mean?
When you decide to sell a house as is, you won’t be responsible for making repairs found during the home inspection. The buyer accepts they are purchasing your home in its current condition.
However, this doesn’t mean you can choose not to disclose faults and problems with the property in the disclosure statement.
While the rules differ between states, failing to disclose known issues with the home could result in legal problems.
The pros of selling as is
When you sell a house as is, some advantages can make the process easier.
Repairs
If you know your home needs repairs and you can’t cover the cost, it might seem like selling a home as is will be the best option. However, if you discuss this with your real estate agent, they should have some other options you might not have considered.
Financial difficulty
You might need to sell your home fast if your finances have taken a hit. This will allow you to avoid the cost of repairs and should help you raise the funds you need sooner.
Often investors are looking to buy homes that need renovation, and they will typically pay cash. However, if you sell to an investor, they will likely be looking for a good deal.
A home you haven’t lived in
If the house is part of an estate sale, or you haven’t lived in the property, you won’t fully be aware of its condition. As-is means you don’t have to worry about a nasty surprise in the home inspection report.
However, you will still need to fill out a disclosure statement. If you know about problems in the home, you have to reveal them to the buyer.
Less stressful sales
If you don’t want the stress and hassle involved in selling for whatever reason, an as-is sale can help. While this should remove many of the stresses of a typical sale, it might not remove everything.
Instead, you could ask a trusted friend or relative to deal with the process or get your realtor’s assistance.
Speeding up negotiations
If negotiating the sale takes longer than you want, switching to an as-is sale could help. It will mean you won’t get a list of required repairs from the buyer that you need to address. The inspection will always find some things wrong; removing this issue will make the sale faster.
The cons of selling as is
The choice to sell a house as is does have some negatives you need to consider before you take this option.
Low offers
Whether you are desperate to sell or not, the perception will be that you will take a lower offer. Buyers will try to lowball you with bids below the market value. If this isn’t acceptable, you could wait longer than you expect to find a buyer.
Is the price right?
Pricing a home isn’t easy with any home sale, but it can be trickier with as-is sales. You won’t attract buyers if your price is too high or too low.
With lower prices, buyers could be left wondering what is wrong with the home and decide it isn’t worth the risk. Despite this, you could still find a buyer, though they may feel they can push the price even lower.
Buyers walking away
Usually, an as-is offer means the buyer isn’t locked into the purchase as they are with standard contracts. The buyer could have time to walk away from the purchase if they find a problem.
The buyer might cancel the purchase if the home inspection shows more issues than expected. They will get their earnest money back and might have avoided expensive repairs on the home.
Other options
Choosing not to sell your home using an as-is contract will be better if you have some flexibility. If you have the time to deal with minor repairs or give the home a fresh coat of paint, it could significantly affect how quickly your home sells.
If the repairs are more extensive, you might find a contractor willing to wait for closing before being paid. Your real estate agent might also be able to offer you some options that will sell your home fast and for more.
Bill Gassett is a nationally recognized real estate leader who has been helping people buy and sell MetroWest Massachusetts real estate for the past 35 years.
