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8 min read Feb 23, 2024

Selling A House As Is Without Losing Money

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Reviewed By

Jason Joshi

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Reviewer
Reviewed By

Jason Joshi

Reviewer, Houzeo
About

Jason is a passionate content editor working at Houzeo. He has an eye for detail and keeps himself updated with the recent trends in the real estate market. He also likes to travel and explore places.

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Home sellers spend approximately $14,163 on home improvements. They undertake repairs like roof and foundation fixes to secure a favorable sale price. So, imagine their shock when these fixes don’t deliver the expected Return on Investment (ROI).

You can skip this expensive rigmarole by selling your house as is. Without spending a dime on repairs, you can get cash offers of up to 100% of your home’s Fair Market Value.

On cash buyer marketplaces like Houzeo, you can get multiple cash offers and MLS exposure simultaneously. Houzeo offers a convenient way to list on the MLS for a flat fee, helping you to skip the 3% agent commission.

What Does Selling a House As Is Mean?

Selling a house “as is” refers to selling a property in its existing condition without any upgrades or improvements. You don’t need to fix any defects, even if they are mentioned in the home inspection report.

When you sell as is, being upfront about all property issues is important. You have to disclose every material defect that affects the property’s value in the seller’s disclosure. A buyer can drop out of the deal if you have falsified the disclosure.

We recommend selling your house as is. This is because “fixer-upper homes” sell for less than turnkey homes. Moreover, 68% of millennials prefer to buy an ‘as is’ home.

How to Sell a House As Is?

A fair listing price is vital to attract competitive offers for your ‘as is’ home sale. With these 5 steps, your as-is house sale can be a breeze:

1. Know Your Home Selling Options

You have four options when selling your house as-is:

  1. List on a Cash Marketplace: Cash marketplaces offer maximum exposure for your home – typically via the MLS. This includes exposure to We Buy Houses for Cash companies.
  2. Sell Your Home As Is By Owner: Selling a house by owner is a DIY approach to getting your home sold. A flat fee listing service can help you get your home on the MLS and sell your house without Realtor commissions.
  3. Sell a House As Is for Cash: Cash home buyers make all-cash offers within 24 to 48 hours. However, they offer only 30% to 70% of your home’s FMV. On the other hand, iBuyers can extend an offer as high as 80% with stricter eligibility criteria.
  4. Sell Your House to House Flippers: House flippers are always on the lookout to purchase properties. You can offload your home as-is to a flipper. The home flipper will renovate it and re-sell the house for a profit.

2. Make Minor Repairs/Upgrades

The number of repairs your home requires is inversely proportional to the property’s fair market value. So, you can try to make high-ROI repairs to enhance its value. Homes with solar panels sell for 4.1% more than homes without solar energy.

» Things Not to Fix When Selling a House: Save yourself from loss-making upgrades to sell your house.

3. Conduct a Pre-listing Inspection

Pre-listing inspections will help you avoid violating your seller disclosure laws. Hire a professional home inspector to determine the unknown defects present in your house. On average, home inspection costs range between $300 to $500.

4. Fill Out the Seller Disclosures as Accurately as Possible

The seller disclosure statement has several sections related to property condition. Each section contains questions based on the property’s defects and features. If you hide any defect knowingly or unknowingly, you might end up in lawsuits, lose money, and damage your reputation.

Local laws require sellers to maintain the property till closing as it was on the contract signing date. If found guilty of a violation, the buyer can walk away from the sale without any legal obligations.

5. Be Thorough With the Real Estate Contract

You need to fill out the “AS IS” Residential Contract for Sale and Purchase to sell your house as is. Remember, home shoppers will be thorough with the real estate contract and will:

  • Inspect the property
  • Negotiate repairs or treatments in future amendments
  • Terminate the contract during the option period

Seller Liability When Selling a House As-Is

To reiterate “as-is” doesn’t mean you’re free from liability for undisclosed issues. The scope of your liability relies on several other factors such as fraudulent concealment, material damage, and disclosures.

If you actively try to hide a known defect by covering it up you can be liable for fraud. Additionally, each state has different regulations regarding seller disclosure and liability in as-is sales.

Here are instances of situations where you could be held liable for undisclosed issues in an as-is sale:

  1. Structural Defects: Like rotting floor joists, and rusty I beams.
  2. Mold or Fungus: It is common near places with water damage.
  3. Unsafe Electrical Wiring: Outdated and unsafe electrical systems are a fire hazard.
  4. Failed Foundation: Foundations with cracks can be considered as a failed foundation.
  5. Leaky Roof: No amount of leakage is acceptable.
  6. Failed Septic System: If the septic systems overflow shortly after the sale you’re liable.
  7. Flood-prone Location: If you don’t mention your house is in a flood-prone location.
  8. Lead Paint or Asbestos: If your home was built before 1978 it might have lead paint.

How Much Do I Lose Selling My Home As Is?

If your property needs significant repairs, and you’re selling “as is”, you will limit your buyer pool to investors. Investors typically pay between 30% to 70% of the property’s FMV. This is standard industry practice.

If your property is in good condition, you can sell it at or just below its Fair Market Value. In this case, most home buyers can finance the purchase through a mortgage.

» How Much Do You Lose Selling a House As Is: Discover how much you lose selling a house for cash.

Can I Cancel an As Is Real Estate Contract?

Yes, you can terminate the contract if the buyer fails to get the mortgage pre-approved within the specified number of days. Typically, there’s no lawful duty to meet specific minimum property requirements (MPRs) when selling an as-is home.

You can disclose any known defects and let the buyer decide if they’re acceptable.

Can Home Buyers Back Out of an As-Is Contract?

There’s a 15-day inspection period for the buyer to inspect the property. The buyer may choose to back out of an as-is offer without any penalty or losing the deposit money.

If you withhold or under-report costs, you are required to fulfill the repair requirements as mentioned in Section 9. If not fulfilled the buyer can exit the contract.

Pros and Cons

If you’re still hesitant about selling, here are some pros and cons to help you decide.

✅ Pros

  • No Haggling Over Repairs: Water-damaged kitchen countertops, dripping faucets, or broken roofs – repairs are not your concern. The flipper or investor buying your house as-is will take care of such repairs.
  • No Inspection Contingency: On average, home sellers shell out $14,000 in seller concessions related to home inspection. In an as-is sale, you can pre-set a discount and tell buyers you are unwilling to negotiate further.
  • Hit the Market Quickly and Sell Fast: Since you save time in repairs, you can list your property directly for sale. You can close the sale in 7 to 30 days if you find a buyer who has a mortgage pre-approved for distressed properties.

❌ Cons

  • Below Fair Market Value: As stated earlier, you will most likely sell to a cash buyer. Cash home buyers offer only 50% to 70% (or even less) of the FMV.
  • Negative Buyer Assumptions: Buyers may assume that your property has serious defects, which may not necessarily be true. This assumption negatively affects the offers your house attracts.
  • Mortgage Challenges for Buyers: Mortgage lenders typically do not finance properties with structural or safety issues. FHA loans, VA loans, and many conventional mortgages usually do not allow financing for fixer-uppers.

Selling a Home As Is Near You 🔍

Bottom Line

Selling your house as is can help you save thousands of dollars in repairs. We recommend selling as is if your property is in a distressed condition. It can also help you save a lot of time if you’re selling your home for cash.

If your property is in good condition you will still receive lowball cash offers of up to 30% to 70% of your home’s FMV.

Cash-buyer marketplaces may get you up to 100% of your home’s FMV. Moreover, major cash buyers, including Opendoor and HomeVestors, have submitted offers on Houzeo’s platform. Sell your home as is with Houzeo and save on the 3% listing agent commission.

» Houzeo Reviews: See how Houzeo home sellers save thousands with Houzeo technology and MLS exposure.

Frequently Asked Questions

Can I sell my home as is for cash?

Yes, you can sell your house as is for cash. You can list on a cash buyer marketplaces like Houzeo and Sundae. You can also sell your home to institutional cash buyers like HomeVestors or We Buy Houses.

How to sell a house as-is by owner?

You can do the following for selling a house as is by owner:

1. Price your home competitively
2. List on local MLS
3. List your property on the best FSBO sites
4. Request cash offers for your home

» How to Sell a House By Owner: Discover ways to sell your home by owner.

Should I sell my house as is or fix it up?

It depends on housing market conditions. In a seller's market, buyers are willing to overlook problems of the property, making as-is an attractive option. Sell your house as is mainly if its distressed and repairs are very expensive.

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