“Typically, when a property has made note that it is being sold ‘as-is,’ there are issues the seller knows about, and they want the buyers to work those issues into their offer prices rather than expect the seller to make any repairs,” says Mark McDonough, president of Better Homes and Gardens Real Estate Winans in Dallas, Texas. Selling a home as-is isn’t as simple as telling buyers that they’ll need to handle any repairs themselves, though. Read on for a look at how listing a property as-is works and what special considerations you need to make if you choose to go that route.
What Selling a Home As-Is Means
In a typical scenario, homeowners do a little sprucing up of their properties before listing them for sale and soliciting offers. “These projects include small updates like painting and staging or larger projects a homeowner knows will be an issue at the time of inspection,” says Mallory Micetich, a home care expert at Angi. “As-is homes do not take on this work ahead of listing.” In many cases, a buyer will opt to list as-is a home needs extensive repairs or work, and the owner is not willing or able to take it on, for whatever reason. The trade-off is usually that those projects are made known to the buyer in advance. “We see a lot of home improvement projects around the buying and selling of homes. As-is homes often have an implicit amount of work, but that is known to the buyer,” Micetich says. When it comes to the legalese, keep in mind that nothing about your legal obligations changes in these scenarios. “It’s important to note that just saying ‘as-is’ does not provide the seller any extra protection in a legal sense,” McDonough says. “Sellers still must fill out a complete seller’s disclosure form that includes anything and everything about issues, needed repairs, or broken/non-functional items throughout the house. ‘As-is’ simply means they don’t want to have to fix those issues before selling.” Your buyer will also be allowed to perform an inspection for their own information, even if you don’t plan to make repairs based on the results.
Advantages of Selling a House As-Is
Buyers can often negotiate the price on an as-is home more successfully than they might with properties where buyers are willing to make repairs. That’s a major perk if you’re willing to do the work to fix up a house, but on a budget. It’s also a good way to make a property your own. “For someone who wants their home to be exactly how they want it and take on a lot of personalization projects, this might not be a bad option,” Micetich says. Selling as-is is also a quicker route for those looking to offload a property in a hurry, as long as they find the right buyer. While a buyer still gets time to do inspections, the process for meeting selling contingencies is usually much quicker than it is when there’s a list of repairs. “If ‘as-is’ homes are priced appropriately for their condition, then they typically move at a similar speed to homes listed without that tag,” McDonough says. “That said, because the buyer pool is smaller for ‘as-is’ properties, it is likely that they will tend to have a longer days-on-market time than other properties.”
Disadvantages of Buying or Selling a House As-Is
As a seller, listing your property as-is will likely limit the pool of potential buyers: Not many people will be willing to tackle a home in need of extensive repairs. That said, certain home buyers will still be interested. “Some buyers and plenty of investors are looking for homes that may require some TLC so that they can purchase the property at reduced rates and do the work themselves, saving money in the long run,” McDonough says. “Selling a home as-is can decrease the size of your buyer pool, but there are still plenty of fish in the sea.” When you do find a buyer (or many), you can expect that any offers on your as-is home will be lower than they would be if you were willing to do any needed repairs as part of the sale. “Listing your home as-is can be the quickest and easiest way to sell, but you’ll likely end up selling far below the market value,” Micetich says. “If you want to sell your home for its full value, you’ll be better off fixing it up first. Simple projects like adding new flooring or replacing broken appliances can make a huge difference. Bring in a pro to help you decide which projects will get your home market-ready the fastest.” Micetich cautions that the as-is route is not for all buyers: You’ll want to make sure you know exactly what you’re getting into before you decide to fix up a property. “Buying an as-is home might be a lot for a first-time homebuyer or someone who has not taken on a lot of home projects,” Micetich says. “When buying an as-is home, make sure you have a few pros who you trust to help with the work needed.” Keep in mind that as-is properties don’t necessarily need a ton of work. In many cases, homes are sold as-is because the buyer can’t make even minor repairs. “The owner might be too busy to deal with repairs or has been transferred for their job and simply can’t spend resources on it,” McDonough says. “It’s possible the owner doesn’t have the cash or the equity in the home to be able to afford to make those repairs prior to selling. It’s really all about priorities for the seller when deciding to list ‘as-is’ or not.” With all that in mind, you may find that buying or selling a home as-is is the right move for you—or that you need to reconsider your options.
