Editor’s Note: Houzeo is America’s most advanced For Sale By Owner (FSBO) and Flat Fee MLS platform. Almost $3.5 billion worth of properties were listed by homeowners on Houzeo.com in 2021. This guide summarizes the steps involved in selling a house as is.
One way to sell your property, without scampering to fix the place up, is to sell it in its existing condition. While it’s tempting to sell a house in its existing condition, there are major drawbacks that can raise concerns. Here is a handful of information that you need to know beforehand.
» In this guide, we’ll cover:
- What does Selling As Is Mean in Real Estate?
- Pros and Cons of Selling As Is
- Options To Sell As Is
- How To Sell As Is?
- Selling a House As Is In The US: State-Wise Details
- Should You Sell Your House in its Existing Condition?
What Does Selling a House As Is Mean in Real Estate?
“As is” in real estate transactions means that the buyer gets the property in the existing condition. This entails that the buyer is ready to accept a house that needs a work-worn carpet, a leaky roof, faded paint, and more. However, in some states, “as is” entails a legal term, a complete agreement of disclosing information of the property’s current condition. Sometimes it is also referred to as “as is where is” in a real estate contract.
In such cases, the homeowner should honestly divulge defects about the condition of the home – also known as “Caveat Emptor”, or in layman’s terms “let the buyer beware.” Also, to avoid abusive business practices, real estate agents are in secrecy to honestly speak of the defects or they could be punishable under the Consumer Protection Act which is known as Chapter 93.
Benefits and Risks of Selling My Home As Is
Key Benefits of Selling a Home As Is:
|Save Huge Fortune||Most of the sellers opt to sell as is aims to save a huge amount of money. For instance, a complete bathroom recovery worth $35,000 can be avoided by selling your home in its existing condition.|
|Property Is Sold Quickly||Other than the expenses needed, renovations can take much time before you can market your home. You can skip these steps. Plus, you don’t need to stage the home for showings.|
|Reduce Inspection Bargains||While putting a property for sale as is, you can beforehand inform buyers of the threshold amount you are ready to spend on the repairs. This will cause less stress while handling the closing.|
|Avoid stress and hassles of the process||In case you sell your home as it is to cash companies, you can avoid a lot of legal paperwork. In other words, you don’t have to transact with a real estate agent or negotiate on some other fees.|
Key Drawbacks of Selling Your Home As Is:
|Negative assumptions of the property||Selling as is may generate a negative image of the property in buyers’ minds. They assume your property has some serious defects, which may not always be true. This in turn affects the price it attracts.|
|Most potential buyers offer less||Since buyers assume you’re desperate and think your property has serious defects they’ll probably offer a price that’s below what your property is worth.|
|Difficult to find buyers||In this kind of option, you mostly get to attract flippers and sellers who don’t find it troublesome to do some renovations on your house—a fixer-upper opportunity. Finding such buyers can be difficult as their numbers are small.|
|Repairs cannot be avoided completely||Just because you opt to sell a property as is you are not necessarily free from making repairs. Buyers will try to negotiate the cost involved in repairs. It will be for you to decide how to go about it. If a buyer offers a good price in return for some minor repairs, you may as well consider the offer.|
Options for Selling a Home As Is
Home sellers very often feel that there is only one way to sell their homes as it is. But on the contrary, you can sell real estate in the existing condition via two routes: #1. Getting a cash offer or #2. Selling as is through an agent
1. Getting a Cash Offer
If the property has various problems such as leaky plumbing, defective roofs, etc. you might need a buyer who will buy your home as is and has good capital to fix these defects.
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🔍 Explore more: iBuyers Reviews: Selling Your House for Cash in 2022
2. Selling A House As Is Through an Agent
Perhaps your house is not in very bad condition, so you might want to put it on the market. This will help you understand what all price options are available to you. For this, you can list it for sale through an experienced real estate agent. Make sure you carry out a pre-listing inspection beforehand and are ready with all the disclosures.
The Average Realtor Commission is approximately 5.5% of the sale price, which means if you choose to sell with the help of a Realtor you will have to shell out this much amount as his commission. To save this amount you can list it on Flat Fee MLS Listing companies such as Houzeo. Such Flat Fee MLS Listing platforms make the job easier for home sellers who are otherwise looking to sell FSBO.
3. Sell Your Home To A Real Estate Developer
Real estate developers are always on the lookout for land. Thus, one of the ways to put your house for sale in the existing condition is by offering it to these developers.
There is no need for repairs when opting for this pathway, as they are not interested in the house. This can help you save thousands of dollars!
How To Sell A House As Is?
The most important and first step of the as is process is a complete pre-inspection. As mentioned above, the seller needs to disclose certain information so the buyers know what they are getting into.
On the other hand, you can find real estate investors or cash buyers who can directly buy your house for cash after answering some questions and a scheduled home evaluation for proper closing.
Your main goal in selling “as is” is not to overprice or underprice the deal. Estimate the necessary repairs or do minor improvements if possible. The best way to get the most out of the deal is to talk to a Professional Realtor. In this way, you know how to increase the market value of your home.
Identify and Fix “Deal Killers”
Even when putting your house for sale as is it is important to fix certain issues. These include some glaring issues that the buyers may not overlook. Some of the problems that you need to identify and fix are:
|Repairing Foundation||A weak foundation can act as a major deal-breaker. Repairing a foundation costs $2,100 – $7,400 in the US.|
|Pest Infestation||A house infested by pests can be a major turn-off to buyers. You need to shell out $3,000 to fix the damages caused due to termite infestation.|
|Ancient Roof||It may not be a major deal killer, but the expense to fix an old roof can drive the buyers away. It takes $14,000 on average to install a new roof.|
Here are the best practices you should note when selling a home as is:
|Disclose all the details||Disclose all the details to the buyers as it will help them make an informed decision and will also reflect your honesty as a seller. Remember, you’re offering your house to the buyers in its existing condition, and that means you have to make an assurance that it is still structurally livable and sound.|
|Provide Disclosures||Every state has its disclosure requirements that need to be met when selling a house. This is applicable even when selling as is.|
|Lable your listing as “As Is”||Mentioning “As Is” in your listing will help buyers understand that you are selling your home in the existing condition and it is different from the regular sale.|
|Pre-listing Inspection||Conducting a pre-listing home inspection when selling as is will ensure that the overall process is transparent. This will also help in building trust with the buyers.|
|Make minor improvements||You can carry out the high return on investment repairs which can enhance the look of the property. This includes installing fresh mulch on the lawn, deep cleaning and decluttering, adding a fresh layer of paint, etc.|
|Keep your intentions clear||It’s necessary to be clear in your marketing intentions. Buyers may back out after they figure out there are too many repairs to handle. It will not just waste time but put a bad reputation on your future negotiation.|
|Demand a fair price||Never ask for above the estimated price. Some buyers will ask their contractors for estimates or do their home inspection just to make sure you’re not playing coy. If you want to double your property’s worth, make time to prepare your home—or spend bucks for improvements.|
» More: How to Price Your Home For Sale in 6 Steps
Market a Fixer-Upper
Even when selling real estate as is, marketing it correctly as a fixer-upper can help you attract more prospective buyers. Here are a few marketing techniques that you can use:
- ✍️ In real estate, fixer-uppers are properties that require repair and are therefore sold as is. The lower purchase price, lesser competition, and quality control are a few of the reasons behind their popularity.
Selling a House As Is In The US: State-Wise Details
|Northeast||Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont|
|Midwest||Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin|
|South||Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, Washington, D.C., West Virginia|
|West||Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming|
Should I Fix Up My House Or Sell As Is?
Selling a shabby, worn house can be a challenge. However, doing minor repairs and highlighting the best features of your property can help compete for these drawbacks.
But to avail of the Realtor’s advice, you have to shell out a heavy real estate commission. THIS IS WHERE HOUZEO CAN HELP!
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Houzeo can help skip some of the manual processes involved here. With Houzeo, you can list your property as an owner and facilitate a hassle-free closing process with the help of an attorney. You do not have to worry about complex processes as the platform is 100% online. It will also help in listing your property on the MLS at a flat fee rate, taking care of tasks that otherwise would require manual intervention.
Check out some of the Houzeo reviews and how it has helped customers around the US.
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Frequently Asked Questions
What does a house sold as is mean in real estate?
Selling as is means selling a home in its current condition. Whether it needs a minor repair or is already in good shape, the buyer should expect to get the property offered as it is. That also means no agent commission and closing costs included (if you are directly approaching a cash buyer), and the transaction can be a lot faster than the traditional one. However, as is doesn’t exempt you from disclosing defects. The home seller has to comply with the purchase agreement disclosing any known defects of the property’s condition.
Is it hard to sell a house as is?
Selling a home as is can be a little difficult. Sellers try to sell their houses quickly whereas buyers want to ensure that all the basic requirements are met. At times, this can cause a tussle between both parties. But, if the negotiations are carried out efficiently then it can be a very profitable deal for the sellers.
Why sell your home as is?
Houses sold as is can fetch you the following benefits:
1. It is sold quickly
2. You save a lot of money by by-passing repairs
3. Selling process is comparatively easier
4. You can reduce bargain during negotiations
What should you not fix when selling a home as is?
You can skip repairs of the following:
1, Complete renovations of kitchen, bathroom, etc.
2. Removable Items
3. Major cosmetic flaws
4. Old Appliances, etc.
Is selling a home as is a good idea?
Yes and No. If you’re truly desperate and want cash for some reason, then selling your home as is can be a good idea. To top it all off, you get a faster closing, zero agent commission charge, and a fuss-free process. However, these benefits come with a price, a big chunk of the price. You’ll likely get a lower than the property’s fair market value.
How much do you lose selling a house as is?
Most of the cash companies offer 20-50% lower than your home's market value. A significant amount to lose!
Is house flipping same as selling a home as is?
Selling as is in real estate means the buyer gets the property in the existing condition. This entails that the buyer is ready to move into a house that needs a work-worn carpet, a leaky roof, faded paint, and more.
Whereas, house flipping in real estate means that a buyer purchases a house in the existing condition, repairs and fixes defects present and resells it for profits at a higher price.
Can I sell my house as is?
Yes, sellers can sell their houses in as is condition. You need to include the "as is" clause in the real estate contract.
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