Selling A House As-Is: 4 Pros And 3 Cons

 

 

 

 

When it's time to sell your home, there are a lot of things you need to consider, the first of which is how to prepare your home. Traditionally, most people think about getting their home into a pristine, show-ready look and condition that can entice homebuyers. However, prepping your home can be quite overwhelming and daunting.   

So, instead of investing more money and effort before listing your home, you can consider selling it 'as-is.' This article explains what it means to sell your home as-is, as well as the pros and cons associated with this option.

As-Is Home Listing: What Is It?

When a house is put up as an as-is listing on the market, it means that it's being sold in its current condition—flaws and all. The seller won't make any improvements or upgrades, so the buyer will take responsibility for any modifications or repairs, including issues that may not be visible at the time of the sale.

That said, both the seller and their real estate agent will still need to follow state disclosure laws and list all known problems of the house. While state and local disclosure regulations vary, sellers are generally obligated to disclose the following to a buyer:

∙ Home structural issues

∙ History of damage, infestation, and flooding

∙ Defects in key systems, including roof, plumbing, and HVAC systems

∙ The presence of lead paint

While it can attract regular buyers looking for a cheap home of their own, as-is home listing often attracts individual home investors, as well as house-buying firms like Problem Property Pals that purchase your property as-is in cash.

 

 

Pros Of Selling A House As-Is

1. No Costly Repairs
The traditional listing will require you to make improvements. And depending on your home's current condition, you may need to invest over USD$10,000 in major repairs.

Unfortunately, not everyone has the funds available to do those repairs. By selling your home as-is, you don't have to make any of these home improvements or costly repairs since you're selling your home in its current condition.

2. Save Times
When selling your home as-is, you don't have to wait weeks or even months for repairs to be done. And since you're not making any repairs, you can list the house sooner. You can start marketing your house and pitching it to potential buyers, giving you a head start in attracting prospects.

As mentioned before, there's also a chance that your home as-is listing will attract cash buyers. Since these buyers are willing to pay in cash, it eliminates most of the time-consuming steps in the closing process, helping the transaction to move faster.

3. Fewer Contingencies
Traditional home buying contracts come with numerous contingencies that can increase your risk as a seller. Contingent deals must fulfill specific requirements before finalizing, and a single violation can instantly void the entire agreement.

If you sell your home as-is, you can reduce these contingency clauses in your contract. Most as-is listings have a lower selling price which can result in fewer contingencies. For instance, a home appraisal isn't required for any property listed under USD$400,000. This allows you to skip the appraisal contingency. In addition, if you get an all-cash offer, you don't have to worry about loan contingencies.

With fewer contingencies in your contract, the less stressful the process is and increases the likelihood of a deal going through.

4. Lower Cost And Expenses
Aside from removing the cost of repairs and improvements, selling your home as-is also helps lower the closing cost. It also saves you from hefty ownership fees. This means you'll stop paying for home maintenance, property taxes, and other expenses.  

Cons Of Selling A House As-Is

1. Negative Perception
If you're selling your home as-is, it's common for most buyers to view your home negatively. They may assume that something is seriously wrong with your home, something bad enough that's not fixable or you can't afford to fix it.

2. Haggling And Low Price
With a negative perception, a buyer may start to lowball your selling price. Seasoned home investors, buyers, and flippers build a business out of selling fixer-uppers. Thus, you'll need to bring sharp negotiating skills to keep your buyers interested and get a good price.  

Despite that, you shouldn't expect to command a higher market value for your home that needs repair work. In general, you'll have to reduce your price to attract potential buyers and compensate for the necessary repairs.  

3. Less Available Buyers
Having an as-is listing can drive away a lot of potential buyers right away. Some buyers are looking for a move-in-ready home and don't want to stress out in fixing a property or finding new issues once they move in.  

Takeaway

It's no secret that selling a house is a long, stressful process. From hiring a realtor to closing, most components that go into a traditional home sale can take too much time. However, if you want to cut down the time and effort it takes to sell your home, you also have the option to sell your house as is.

That said, while as-is sale offers several benefits for home sellers, it also comes with various drawbacks and may not be the right move for everyone. So, make sure to weigh the above pros and cons of the as-is home sales to help you make a well-informed decision.