When you should sell your home as-is, and when you should invest in repairs
If your home needs substantial repairs, but you don’t have the time, money, or desire to complete them, selling your home as-is could be the right choice. But an as-is home tends to attract less interest and lower offers from buyers who expect to pay to make repairs later.
In this article, we’ll cover what an as-is sale really means, the pros and cons, and how to sell your home as-is and get a fair price. Get in touch with our listing agents to find out how Flyhomes can help you sell your home in less time.
What to know before you sell your home as-is:
- Selling your home as-is can lead to a faster sale, but it can also mean a lower purchase price
- You can list all or part of the home as-is depending on what you’re willing to do to the home
- While you may save money in upfront repair costs, you may lose money on the overall sale, so it’s crucial to run the numbers
- Even if you decide to sell as-is, there are ways to maximize the profits from your home sale
What does it mean to sell as-is?
When it’s time to sell your home, you can choose to list it in as-is condition. “As-is” condition essentially means that what you see is what you get, and you will sell the home in its current state. This tells buyers two things:
- There are likely some issues with the home and/or the property
- You will not negotiate repairs or a lower price to accommodate some or all of those issues
This means that as-is homes are usually listed and sold for lower prices than if they were repaired or updated.
Selling as-is can mean the entire home or be focused on specific areas in the home. For instance, if you’re not willing to fix specifically foundation issues, you can state in the listing description that the foundation will remain in as-is condition. In this example, you wouldn’t pay to have the foundation fixed, but you may be willing to update something like the roof or appliances instead. This way, the buyer knows that there is an issue that you’re not willing to fix, but they could request repairs or credits for other areas of the home.
Even if you sell the home as-is, you still have to disclose any issues you’re aware of. Each state has its own rules for property disclosures, so make sure you work with your real estate agent to understand your state’s disclosures and make sure you’ve disclosed the required information yourself.
Why would you want to sell as-is?
Since as-is homes tend to sell for lower than their fully repaired or updated neighbors, it may seem like a bad deal all around. But there are reasons some buyers choose to sell as-is instead of making repairs and holding out for a higher sale price.
Repairs take time. Between identifying the repairs that need to be made, scheduling contractors, waiting for materials, and actually completing the work, repairs can take days, weeks, or even months to complete.
In some situations, you may need to sell the home quickly. Skipping repairs and selling the house as-is can get you to the closing table faster, so you can be on your way.
While some sellers are willing to add features that will increase their home value, others can’t—or don’t want to—fork over the cash to make that happen. Repairs can get expensive. So if you don’t have the money to pay for repairs up front, selling as-in may be the best choice. But keep in mind that what you save on repairs may cost you in the form of a lower sales price.
Deciding what repairs or home improvements need to be made can be stressful because it’s not always easy to tell what buyers will want. True, buyers can request certain repairs during negotiations which you can agree to, but the cost and extent of these repairs are unknown until you actually get into negotiations. Selling as-is removes the stress of determining which repairs or updates to complete.
Pros and cons of selling a home as-is
As with any decision, there are pros and cons related to selling a home as-is. Let’s take a look at both sides, so you can weigh your options with confidence.
Pros to selling as-is
- You could sell your home faster. Selling as-is allows you to get your house on the market faster than if you took time to identify issues, hire contractors, and complete repairs.
- You could save money. Repairs cost money, and there’s no guarantee you’ll get a return on your investment in the sale after you’ve dropped a bunch of cash on new appliances, floors, or a roof. When you sell as-is, you don’t spend money up front, and if you’ve paid off a large chunk of your mortgage, you’ll be able to keep more of the proceeds as profit.
- You could avoid repairing or updating the wrong things. Many buyers want to put their personal touch on a home after they move in. If you spend time and money replacing broken cabinets with new cabinets or switching out leaky faucets with new ones, there’s no guarantee that the buyer will like them. In fact, they may prefer to pay a lower purchase price and complete repairs on their own.
- You could attract a cash offer. As-is homes often attract the attention of cash buyers who don’t have to rely on money from a lender.
Cons to selling as-is
- Buyer financing could be an issue. Some loans require the home to be in a certain condition in order for the buyer to secure financing. In many cases, structural issues or health and safety concerns could prohibit a lender from approving a loan.
- You could lose money. Selling a home as-is typically results in a lower sale price than a turnkey home. But you also have to factor in the cost of those updates and repairs, so doing some math will help you decide if you’ll be losing too much money selling as-is or if you’re willing to deal with a lower purchase price to offset the headache of dealing with repairs.
- Fewer interested buyers. An as-is home typically attracts a certain type of buyer who is looking for a deal and is willing to do the repairs themselves. This can shrink the buyer pool and keep the house on the market longer or result in a lower purchase price.
Tips for selling your home as-is
Even if you don’t plan on doing repairs before you list the home or plan to agree to repairs during negotiations, there are still some things you can do to help your home sell for as much as possible.
- Declutter – It’s amazing what good decluttering can do for a home. And less clutter and personal belongings can help potential buyers see themselves living in the space. You can remove and store personal pictures, kids’ toys, and the random things that end up on the countertop. And don’t just throw everything into a closet because potential buyers will probably look in them when they tour the home.
- Tidy up – When it’s time to show your home, make sure it’s as tidy as possible. Do a quick vacuum, do the dishes, wipe down surfaces, etc…, to get the house looking as clean as possible.
- Spruce up the curb appeal – First impressions make a big difference, so make the exterior of the home as nice as possible. Mow the lawn, weed the gardens, sweep the porch, and wipe any dirt off of the siding.
- Be honest – If you’re selling as-is, the buyer will likely know there may be some issues with the property. Be as honest as possible on the seller’s disclosure and with your agent to save time and hassle. Prospective buyers will be going through the home with a fine-tooth comb to make sure they’re willing to take on the necessary repairs and updates, so the more information you can give them right away, the better.
- Know your bottom line – Just because you’re selling as-is doesn’t mean you’ll have to accept a particularly low offer. Decide how low you’ll go before you look at offers or enter negotiations so you can make sure you’re not caving to pressure to go lower than you’re comfortable with.
- Decide what improvements, if any, you would be willing to compromise on – Even if you listed the home as-is, buyers could still request improvements in the hopes that you’ll agree. If there are improvements you’d be willing to make, have them in mind as you start to review offers.
Should I sell my house as-is?
Selling as-is is a personal decision that will be different with every house. The first thing you should do is choose an agent who has experience in as-is real estate transactions and then work out how much to list the house for. Decide on your bottom line and do as much as you can to make the home as appealing as possible in its current state.
Even if you decide to list the home as-is, there is still some wiggle room on your part. The goal of an as-is sale is typically to save time and money, so if the buyer has smaller requests, like a credit to change out cabinet hardware or light fixtures, you may be able to agree to a few concessions to get the house sold.
About the author: Stephanie Mickelson is a freelance writer based in Northwest Wisconsin who specializes in real estate, building materials, and design. When she’s not writing, she can be found juggling kids and coffee.