When is it OK to sell a home in As Is Condition?
Selling a house is a lot of work!
You need to make sure systems are all working properly, any glaring defects are corrected, and outdated cosmetics are addressed. Oh and then you have to pack up the entire house, deep clean the entire house, and juggle the stress that comes with moving!
I get why many just want to skip over the home prep and sell a home AS IS.
BUT… is this really the best option for you?
When is it ok to sell ‘as is’?
There are certain situations where listing the home in ‘as is’ condition is advised.
When a property is in significant disrepair and the most likely buyer will be an investor or someone who intends to do a full rehab. There is no point for a seller to put any funds into a property that requires a major rehab. Any smaller projects you address may end up being torn out anyway!
In this situation, Sellers need to be realistic as to the price of the property. Anyone who needs to come in and invest a significant amount of money to make a home livable will be factoring the renovation costs (and investors will also factor future selling costs along with the need for a profit) into their offer price.
When a Seller is in a financial situation where there are no available funds for repairs OR there is not enough equity in the home to cover the cost for repairs during inspection negotiations.
Remember to be transparent and disclose any known defects. It is not only the right thing to do, but hiding material defects could set you up for potential legal issues down the road. Again, when selling ‘as is’ a Seller needs to set their expectations accordingly when it comes to pricing the home.
When you inherit a property, it could make sense to sell the home As-Is. Someone who is left a home from a family member may not in the position to evaluate the home’s condition, may be unable to financially make repairs, or may not live in the proximity to be able to oversee any work.
You may want to disclose the ‘estate sale’ situation in the MLS so prospective buyers understand the reason for the ‘as is’ sale. The listing price should reflect the unknown conditions being sold.
You could also consider utilizing services such as my team’s HomePrep! We have a service available for or South NJ Sellers where we will manage all the necessary home preparation projects in order to maximize your profits and minimize your stress. LEARN MORE HERE.
A Buyer’s reaction to ‘as is’ listings
In my experience, when a buyer sees ‘As Is’, their first reaction is ‘what’s wrong with the house?’. They immediately assume that there is the possibility of a major defect that the Seller is either hiding or is unable to address. This scares them!
Even though they are still entitled to their home inspections, they often will balk at the idea of spending money and time on due diligence costs if they know that the seller will not assist with any major defects discovered.
If they feel this home is worth the exploration, they will tour with an EXTRA critical eye. They are searching for any and all items that could be an added cost to them and will then go down a ‘google rabbit hole’ to determine what they feel could be a worst case scenario.
If they present an offer, it will include a reduction to cover the costs of the potential repairs. This additional analysis is actually ADVISABLE as a Buyers Agent because it is important for a buyer to protect themselves from unknown expenses.
“But why should i have to fix it?”
I’ve heard Sellers say things like “We’ve been living here, so why should I have to fix something that we live with just fine?” or “That was how the house was when we bought it. If our sellers didn’t correct it, why should we?” or “They are buying a HOUSE! They need to expect certain defects.”
Ooof!
Please pause and think about how those statements actually sound. For sellers who feel this way, then I advise that they reduce their asking price and remind them of their obligation to fully disclose the defects.
IF you are hoping for maximum proceeds and full market value for your property, then these statements are unacceptable. Would you ever pay top market value for ANY product that was not in top condition? A home is a product on the real estate marketplace. If you want the maximum price, then you have to put in the work to present maximum quality.
MOST Buyers are OK taking on minor defects as they do expect imperfections, but they should not be expected to inherit major burdens without a concession on the price.
I just don’t have time to manage the projects
This is a VERY valid concern and one I hear often. It’s a full time job to identify defects, gather estimates, coordinate the work, and organize all the documentation. It’s an added stress on top of preparing for a move, or organizing the affairs of an estate.
I also know that you DO have PRIDE IN YOUR HOME and your DO want to present your property in its BEST CONDITION.
We have heard the call for help and now offer a service that takes the home preparation project management OFF your plate. Our team will come in to professionally identify which projects will help bring the maximum value and then we will coordinate all the work. Allow us to manage the projects so you can focus on your move!
Our homes are our PRIDE AND JOY! We put so much time, money, blood, sweat, and tears into protecting our investment. We spend years maintaining and updating the property. When the time comes to sell, you want to capitalize on all that hard work! Maximize your proceeds by offering a property that Buyers feel confident paying top dollar for!