Selling a home is an important decision with many factors. Sellers want the best possible price and a quick exit. However, not every seller can have both. Some people opt for selling a house as-is. This selling strategy has several advantages, but it also carries some downside. We will discuss all you need to know about selling a home as-is.
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What “As Is” Means In Real Estate
“As is” refers to the current condition of the home. What you see is what you get. The buyer is responsible for repairing the house, and the seller gets to walk away.
Prospective buyers can still hire an inspector for an “as is” real estate transaction. However, “as is” implies sellers won’t lower their prices if the home inspection reveals additional problems.
Pros Of Selling A House As Is
Selling a house as is comes with many advantages. We discuss the key perks below.
No Repairs Needed
When you sell a home in its current condition, you don’t need to make any home improvements. Depending on your home’s condition, you may need to invest over $10,000 in major repairs. Not everyone has those funds available. People with the funds may not want to get involved in that work. When you sell a house as-is, you avoid these hassles.
Quicker Sale
Since you’re not making repairs, you can list your home sooner. You can start marketing your home and pitch your home to potential buyers. Promoting your property sooner gives you a head start to attract prospects. However, you can get a sale without marketing your property if you sell it as is.
Simpler Process
An “as-is” property has a greater chance of receiving an all-cash offer. These offers let you skip the mortgage approval process and speed through a closing.
You’ll also have less to negotiate after agreeing to an offer. Buyers may negotiate savings based on what an inspector finds. Being upfront about your home’s “as is” status will reduce friction in the negotiation process.
Fewer Contingencies
Contingencies increase a seller’s risk. Contingent deals must fulfill specific requirements before becoming final. Some contracts come with several contingencies, and a single violation can void the entire agreement.
Selling a home as-is will reduce contingencies. According to federal agencies, a home appraisal is not required for any property listed under $400,000. This rule can help you skip appraisal contingencies. A lower price can also result in an all-cash offer which would get you out of a loan contingency. Deadline with fewer contingencies lowers your stress and increases the likelihood of a deal going through.
Fewer Costs
Selling as-is will lower closing costs and save you from the cost of ownership. You’ll stop paying for property taxes, home maintenance, and other expenses. Selling without repairs also keeps you from costly renovations. Some people plunge into debt to restore their homes before listing them. Getting into debt is a risky strategy that you can avoid by selling your home in its current condition.
Submit an online application form to inquire about Angel Oak Mortgage Solutions financing options.
Buy a home or refinance your existing mortgage with Zero Mortgage.
Older homeowners can get peace of mind and added financial security with a reverse mortgage from AAG.
Cons Of Selling A House As Is
Selling a house as-is provides many benefits, but it’s not perfect. We’ll discuss the cons of selling a home in its current condition.
Low Price
You can’t command market value for a home that needs work. You’ll have to reduce your price to compensate for necessary repairs. Your house will sell lower for what’s on the market, but you get out of it sooner. Some sellers are happy to move on from their old homes. Others don’t like the idea of a lower price and will invest over $10,000 into renovations before listing the property.
Less Available Buyers
Not every buyer wants a project. Some want a move-in ready home, but your property may not fit the criteria. Asking for a cash offer will further reduce your buyer pool. Cash buyers gain leverage since competition is lower. You’ll have to charge lower prices, but make sure you still get a fair price.
How To Sell Your House As Is
For many sellers in need of cash and ready to move on to the next chapter, the pros of selling a home as-is outweigh the cons. If you’re in that group, explore these approaches for selling your house in its current condition.
Use an iBuyer
iBuyers are tech companies that rely on analytics to purchase homes. They buy houses hoping to sell them at higher prices in the future. You can buy your next home from an iBuyer after selling your current one.
Pros
- Quicker sale
- Cash offers
- No listing or marketing
- No realtor fees
- Not having to prepare your home for a showing
- Deals go through without the risk of mortgage financing issues
- Some iBuyers provide free moving services for qualifying sellers
Cons
- You have to qualify based on the iBuyer’s criteria
- Assessment of repairs can reduce the final offer price. You can do repairs yourself to maintain the initial offer.
Use A Local House Buying Company
These companies function like iBuyer companies, but on a smaller scale. Several investors pool their money to buy properties in the local area. Some will rent the property to break even, while others sell properties after fixing them up.
Pros
- Quicker sales
- Cash offers
- No listing or marketing
- No realtor fees
Cons
- You’re limited to your local choices
- You have to qualify based on the company’s criteria
- Assessment of repairs can reduce the final offer price. You can do repairs yourself to maintain the initial offer.
Hire An Agent To List On MLS
Some people hire a real estate agent to list their home on MLS. Agents have years of experience with selling homes. You can even find an agent who specializes in selling as-is homes.
Pros
- You know the person who’s promoting your property
- The possibility of higher offers
- Potential bidding wars
- The marketing gets done for you
Cons
- Realtor fees
- Longer process
- You may not receive a cash offer
- You may have to prepare your home for a showing
List On FSBO Sites
FSBO (for sale by owner) sites let you list your property. Buyers may find your listing after browsing the site and searching for properties in your location.
Pros
- No realtor fees
- Full focus on selling your home (realtors work with several clients, not just you)
- You get the most say in-home price and other details
Cons
- Longer process
- It takes up significant time since you don’t have a realtor
- You have to do the marketing yourself
- You may not receive a cash offer
- You may have to prepare your home for a showing
