Do you fix your home up or sell it as-is? That can be a tough question to answer. There are some things to consider before making this decision. This week I welcome back guest blogger Betty White who shares some pros and cons of selling a home in its as-is condition. I hope you find her article to be helpful!
For some homeowners, extensive renovations can present a challenge in terms of time and finances, particularly if you plan to move out of your home soon. However, sometimes properties may have specific problems that are too serious and can’t go unnoticed at an open house. Before you decide to sell your home, it pays to weigh out the pros and cons of selling your home as-is. The following considerations should help you make the right decision when it comes to investing in a remodel or not.
Selling your house as-is has the apparent advantage of relinquishing the need to deal with your old place when you prepare to move to your new home. For some homeowners, this might be a completely legitimate option. Talking to your real estate agent or appraiser is also helpful to get a professional’s point of view. But before that, evaluate the pros and cons to grasp the general picture.
What does it mean to sell your home as-is?
Essentially, this term means you can sell your home without investing in structural and aesthetical repairs. In that case, potential buyers will lay down an ‘as-is’ offer, which means they will acquire the home in its current condition. Therefore, you don’t have to fix or account for any issues that might be discovered in a professional home inspection issued by the buyer.
Going for an as-is home sale eliminates the need for a lengthy renovation process.
However, note that this doesn’t imply you are not obliged to reveal the property’s general condition. So, you still have to make a disclosure that will take note of everything you know about your home. The type and range of information you have to provide in the seller’s property disclosure will, of course, depend on the legal regulations of the state where you have the property.
In some cases, any attempt to avoid disclosing the problems your home has might result in legal action on the buyer’s part. However, some states only require you to note whether toxic substances such as lead are present in your home. In sum, you are better off if you keep it clear and transparent since you might have problems with the law otherwise.
Now that you know more about the general procedure surrounding ‘as-is’ sales, we turn to the advantages of listing your home for sale ‘as-is.’
The Pros of an As-Is Home Sale
No repairs, no costs
Some people do not have enough resources to invest in comprehensive remodels. Moreover, buyers sometimes prefer to renovate the home according to their taste. In addition, selling as-is is the norm in some real estate markets. Hence, buyers do not expect to buy a home that is in perfect condition. So, the primary benefit of selling as-is lies in the financial advantage of not having to invest money in repairs.
No need to spend money on repairs
It is quicker to sell your home as-is
If you do not have a lot of time on your hands to organize open houses, this might be the solution for you. The same goes if you need the money fast. Real estate investors also prefer homes that require repairs because they can renovate the property themselves and flip it afterward.
Hence, selling your property as-is allows you to get a cash offer soon after you decide to sell. Sometimes, you can even sell your home in a matter of days or weeks. Although you probably won’t be able to sell your home at its actual market value, you will also save a lot of time and money.
It is easier to move out of your home
Sometimes, homeowners are pressed to sell their homes ‘as-is’ because they have to move out as soon as possible. And since moving to a new home at the last minute can be stressful, some people cannot spend time and money on fixing their old house. When it comes to moving, you can handle it in a hurry by hiring professional movers. However, lengthy renovations alongside the process of packing all of your belongings might make the whole process unnecessarily expensive and complicated.
The Cons of an As-Is Home Sale
Buyers may walk away from the purchase
One of the downsides of selling as-is lies in the unfortunate possibility that the buyer gives up on the purchase. In most states, placing an as-is offer on a home does not necessarily mean the investor has to buy it. Most states prescribe a certain amount of time when the homebuyer can walk away from signing the purchase contract.
So, the potential buyer may issue a home inspection within this period, assess that the home repairs are too expensive or advanced for them to invest, and cancel the contract. It can also happen that they get the escrow deposit back. So, if you plan to list your home for sale as-is, be sure to take this possibility into account.
Low Offers
Another caveat to going for an as-is sale lies in the amount of money you can expect to earn. Buyers might assume you are in a hurry to sell, resulting in low offers. Moreover, an as-is home might attract only buyers who have enough money to finance extensive remodels. So, you might have to accept subpar offers for your home, even if it is not in bad condition.
The buyer might not make such a good offer when selling your home as-is.
Not a good marketing strategy
Some buyers might be reluctant to invest in a home that needs further investing and repairs. In fact, most people looking for a house prefer to move in immediately after purchase. Even if your home doesn’t need repairs, selling your home as-is might be interpreted as a sign that there is something wrong with the house. In that sense, you might consider introducing low-grade repairs to attract buyers.
There is a lot to consider when deciding whether to sell your home as-is or try and improve it. I think Betty made some excellent points here. I hope her article gave you some things to think about if you find yourself in this situation.
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Such a good post – thank you for sharing. ‘As-is’ homes are less expensive, indeed. And some things can affect it more than others. If you sell a home with old plumbing, the buyer may ask to lower the price of your home even more. Plumbing is quite costly to repair and replace, and such houses have less demand on the market.
Great point!