If you think selling your home as-is only works if your home is in tip-top shape, think again. With the demand for homes higher than ever, many sellers are seeing record-breaking sales, cash offers, and even as-is deals.
Whether your home is a fixer-upper or brand-new construction, selling your home as-is has benefits and drawbacks. From how it works to the advantages and disadvantages, we'll go over everything you need to know about selling your home as-is.
Think of this as your home selling guide to as-is sales. Let's jump in and see if an as-is sale is the right move for you.
1. How an As-Is Sale Works
An as-is home sale says to potential buyers and agents that the seller isn't making any repairs or changes to the home to sell it. What you see is what you get when it comes to selling a home as-is. There's no touching up paint, repairing that back stairway, or finally fixing a leaking sink.
With new homes or hot real estate markets, as-is home sales are simply removing some of the negotiation steps from the deal. This differs from a traditional home sale in that sellers don't improve their homes or agree to make repairs in order to get the deal closed.
When you sell your home traditionally, a seller will often freshen up their home, make small improvements, and even stage their home to help it appeal to more buyers. A traditional home sale will include a little more homework before listing your house on the market.
2. The Difference Between Selling Your Home As-Is and a Traditional Sale
During an as-is home sale, it's important to note that buyers will still come to tour your home. Buyers still have the right to know about anything dangerous or hazardous in a home.
Buyers looking at an as-is home understand that any repairs and renovations come out of their own pocket. On newer homes in high-demand markets, this may not affect offer prices at all.
In an as-is home sale, both parties understand that there won't be any negotiations regarding improvements or repairs as there would be in a traditional sale. With a traditional sale, if a buyer found lead paint was used in the home, for example, they could request this area be re-painted or ask for a credit to cover the cost to re-paint at closing.
If repairs get completed or estimated with a traditional sale, you'll show professional receipts before the closing. Credits for repairs get included in the final figures at closing and will go to the buyers to cover or to make the repairs.
3. Knowing How to Price Your Home As-Is
Knowing how to price your home as-is can be difficult. Consulting a professional real estate agent is key to getting top dollar. With an older or outdated home, buyers are expecting that there are repairs needed or work to do. They often go in with a preconceived notion that something is wrong in the house.
Potential buyers will typically expect a slight discount to leave room for improvements in their budget. The condition of your home will have a big impact on the offers you receive.
4. Selling a New Home As-Is
In newer homes, however, sellers may sell as-is to simply remove negotiations regarding credits or repairs as these are often minimal. A real estate agent knows it’s important to understand the market conditions, the demand for homes, and the prices in the area.
A newly updated home in a high-priced market may not receive any discounts for selling as-is. A home that's sold to cash investors or developers to get knocked down, on the other hand, will sell as-is at a much lower price.
It's also important to note that if a buyer needs financing, an appraisal is also required. If a home appraises for less than the offer price, the buyers will need to pay the difference out of pocket.
In today's real estate market, homes are going for an average of 1-3% over the asking price. Areas with a low housing supply will see even higher prices.
5. Utilize Digital Marketing Tools to Find Serious Buyers
Whether you're selling a home as-is that needs repairs or that has been beautifully updated, a virtual tour is a must. A virtual tour is a great way to vet serious buyers.
Potential buyers are often scrolling for homes on their phones. If someone sees the option for a virtual tour, they will take a tour from the comfort of their own home.
Taking tours online allows buyers to tour homes as often as they'd like. Homeowners aren't inconvenienced and potential buyers can take their time.
After a virtual tour, window shoppers and casual buyers will likely keep scrolling. Serious buyers are the ones who make the call and come take an in-person tour.
Digital marketing tools such as 3D tours allow buyers to zoom in if they wish, see the floor plan on every level of the house, and more. Buyers today expect this level of technology. You only have a few seconds to grab the attention of someone looking for a home on their phone or online: if buyers see dark, grainy, poorly lit iPhone photos, they will keep on scrolling.
Make the most of your time and a potential buyer's time by showing your home or portfolio of homes in the best light possible. Digital marketing will drum up more interest which could lead to a higher sales price. Bad photos and no 3D tour could cost you a buyer.
6. You Still Need to Have Real Estate Disclosures
During an as-is home sale, buyers will still need all the pertinent disclosures. If a roof is leaking, for example, or mold has been found in the home, potential buyers are alerted. This is done for everyone's safety and peace of mind.
Common real estate disclosures include past flooding, environmental issues, zoning problems, lead paint usage, and product defects. Living in a floodplain, for example, will often require proper water control measures. This gives the buyers a chance to know about the flooding before they buy the home.
With a disclosure, a buyer still can’t ask a seller for money towards the repair. This is more for their knowledge of what will need to be taken care of after the sale. This may also factor into the sales price.
7. Understand That Buyers Can Walk Away
It's important to understand that buyers can still walk away from an as-is sale. Just like a traditional home sale, if a buyer becomes uncomfortable, financing falls through, or something unexpected comes up in an inspection, the buyers still have an out.
Inspections take place quickly after the offer is accepted to give everyone plenty of time if something comes up. Some home sellers find it helpful to have a home inspection done before the home is listed as-is.
This will help make the seller aware of potential issues that may come up with buyers. It will also help the seller and their real estate agent come up with the correct sales price. A pre-listing home inspection will greatly help reduce the chances of a buyer walking away.
As a seller or their agent, you can disclose right away any issues the home has. The disclosures can be included in the MLS listing information. While a buyer can still do their own inspection as well, the big issues are laid out upfront.
8. The As-Is Appraisal Process
After a home appraisal, a mortgage lender may say a home is worth far less than the offer price. If a home appraises for too low, a buyer may not have enough to cover the difference.
This process reduces the chances of someone having a mortgage for more than their house is worth. This is known as an upside-down mortgage.
Let's say you get an offer on your home for $500,000 but the home only appraises for $450,000. If a buyer can't pay their down payment plus the additional $50,000, they may have to walk away from the deal.
When this happens, it's also a chance to open negotiations again. The seller may accept a lower offer to get the deal done at a price that's more comfortable for the buyer and their lender.
Should I Sell My Home As-Is? Ask an Expert Today
Is selling your home as-is the right decision for you? There's no universal right or wrong answer when it comes to selling your home. This is where consulting the right real estate professional is key. A professional real estate agent will know how to price your home and if an as-is sale will get your home sold faster.
If you're considering selling your home as-is, we're here to help. We can help you determine if this is the best strategy to get you the most for your home. We understand the local markets and what will get your home sold quickly. Let us help you find the right real estate professional.