Wed. May 25th, 2022
the-‘should-i-do-it?’-guide-to-selling-a-house-‘as-is’

If you want to sell your home, but it has large issues you don’t have the time, money or desire to fix, you may consider listing your house for sale “as is.”

Selling a home “as is” can be a good strategy if you need to sell the home quickly, can’t afford the repairs, or want to attract a cash offer. But it also comes with a set of drawbacks that you should weigh carefully before you make your decision.

In this guide, we’ll walk you though what an “as is” sale really means — and what it doesn’t. To make sure you have the best information at your disposal, we talked with top-rated real estate agents across the country who offered their expert insights to help you make the best decision for your home and your future.

What does it mean to sell a house “as is”?

An “as is” sale is pretty self-explanatory, but it comes with a few caveats. A house that sells “as is” means that the seller typically isn’t willing to make any repairs or fix any issues that the home may have, and the home will sell in its current state. Now for the caveats:

You still have to disclose issues: Listing your home “as is” doesn’t mean you can wash your hands of the property and say “you get what you get” to potential buyers. Federal and state disclosure laws require sellers to disclose certain issues with a property. Typically, things like a leaky roof, the presence of asbestos, and issues with the HVAC system or foundation need to be listed on the seller’s disclosure. In addition to federal requirements, each state may have specifics that sellers are required to list.

You can pick what comes “as is”: In some cases, a seller may not want to list the entire home “as is” if the issues are isolated to certain areas, like the garage or pool area, or for certain elements like a fireplace or broken appliances. If you go this route, a buyer could request repairs on areas not listed as “as is.”

The buyer can still request repairs: Even if the home is listed “as is,” the buyer can still order an inspection after making an offer and request repairs to areas of concern that come up on the inspection. The seller can then negotiate and decide to do the repairs or refuse.

Not All Buyers Will Purchase Homes ‘As Is’

But many investors and house buying companies will. HomeLight’s Simple Sale platform provides cash offers for homes in almost any condition nationwide. Skip repairs, staging, and open houses. Get a competitive offer to sell your home, on your timeline.

Why do people choose to sell their house “as is”?

There are a number of reasons that a seller would choose to sell a house “as is.”

Need a faster sale

If you want to sell your house quickly, selling it “as is” can help you eliminate some of the steps that often cause delays or just take time. The buyer may still request a home inspection so they know exactly what they’re getting, but you won’t have to tackle any repairs that could hold up the sale.

Jeff Lurie, a real estate agent in Suffolk, Virginia, who works with 85% more single family homes than the average Suffolk agent, frequently sees this in his market. In some cases an “as is” sale is a result of a military move. Lurie says he sees situations where “a military family is getting a permanent change of station (PCS) from point A to point B. The house is generally in good condition, but they just don’t have the time or the money to do the work.”

Can’t afford repairs

Repairing or renovating a home can be expensive and isn’t always financially feasible. Selling “as is” allows you to move forward with the sale without making a huge investment or tying up  money you need for other purposes.

Desire to save money and time on repairs

In some cases, sellers can afford the needed repairs but don’t want to undertake the cost and time required to complete them. Lurie says that even when repairs or upgrades are needed, it’s not always clear which repairs would be desirable to buyers. “I wouldn’t want them to spend $5,000 on having new carpet installed just to drive by and see the carpet piled up on the side of the road two weeks after closing because somebody wanted hardwood floors.”

Facing a critical or unexpected financial situation

In the event of a lost job, a medical emergency, an impending bankruptcy or any other unexpected financial crisis, selling a house “as is” can provide needed funds quickly.

Reduce the stress of an inherited property

If the property is inherited, trying to sell it can come with additional stress from the loss of a loved one. Or if it was inherited by multiple family members, coordinating repairs and payments can be difficult, especially if the family members live in different states. Selling “as is” can reduce this stress.

While you may get less money with an “as is” sale, it can significantly streamline the process. There are buyers who are willing to take a chance on an “as is” property. Investors and home flippers are usually looking for a deal. And in some cases, people will buy an inherited home in its current condition, including any belongings left inside.

Avoid foreclosure

Selling a house “as is” can help it sell quickly in order to avoid foreclosure. In some cases, this results in a short sale, which is a complicated process that results in selling the home for less than it’s worth. The short sale process can be fairly quick, and if you’re working to avoid foreclosure, it’s likely that repairs will take too long and/or be too expensive. Selling the house “as is” can expedite the process.

Deal with unexpected life changes

A new job that requires a quick move to a new city or a divorce that leaves a house to deal with are examples of life changes that might require you to sell a house “as is.”

A laptop used to sell a house as is.
Source: (Lauren Mancke / Unsplash)

How do I know if selling “as is” will be the best choice?

As with any decision, there are pros and cons of choosing to sell your home “as is.” Let’s take a look at a few.

Pros of selling a house “as is”

A faster track to closing

Getting ready for a traditional home sale can take as little as six weeks, but often the preparation process takes much longer. Selling “as is” can allow you to get your home listed on the market faster.

As of January 2022, listed properties were on the market for 19 days, and 79% of homes sold in that month had been on the market for less than a month, according to recent data from the National Association of Realtors. In other words, in a hot market, full home preparations can take longer than finding a buyer. If selling fast is the goal, selling “as is” may be the way to achieve it.

Attract a cash buyer

Often, cash buyers are attracted to “as is” homes and the prospect of getting a deal. Another way to sell an “as is” property is with HomeLight’s Simple Sale platform which provides you with an all cash offer for your home, allowing you to skip the repairs, prep work, and open houses. After answering a few simple questions, you can get an all-cash offer in 48 hours or less. And you can sell it in as few as 10 days.

Less costs to the seller

If the budget is tight, selling “as is” can help you avoid the upfront costs that can come with selling a home. Even if you’re selling “as is,” you can still take some time to address smaller, inexpensive issues — a leaky faucet, a broken hinge, clutter, etc. — that might further deter buyers.

Reduces back-and-forth negotiations

While you may not be able to invest much in the property, it’s advisable to keep the lines of communication open. Will Gaskins, who sells properties 68% faster than other Washington DC and Northern Virginia agents, tells his clients to engage in the home inspection process and consider buyer requests.

He reminds them that they still have the right to say no, but at least they’ll get to have a conversation about things. “We want a win/win,” Gaskins says. “We want the buyers to feel good about the transaction, and we want the sellers to feel good.”

But you still have the option to negotiate concessions like closing cost assistance based on work that is needed. For instance, Lurie says that in some cases, it’s possible to “work it out with concessions versus making them do repairs before closing. Sellers are more apt to give concessions than to do the actual work.”

Cons of selling a house “as is”

Smaller buyer pool

When potential buyers see those two little words in listings, it usually denotes that there is something wrong with the property and can deter some buyers who don’t want to make repairs. “When I see the words ‘as is,’ I tell the buyers don’t even bother with it,” says Debra Blanchet, a Providence County, Rhode Island agent with 33 years of experience.

Listing your home “as is” can decrease the number of buyers who will come look at the property. Gaskins believes it sends a bad message. “It tells people this is a disaster.”. If your goal is to sell your home quickly, he recommends you attract buyers with your openness to negotiating instead of using the “as is” tag. You can still say no to their requests (which may lead to a decrease in what they’ll pay) but at least you’ll have people willing to look at the home and make an offer.

The buyer might back out

The potential buyer still has the right to ask for a home inspection even if you state you’d like to sell “as is.” They also have the right to ask you to fix problems that the inspection turns up. If you refuse to engage in a little give and take with the buyer, it could lead to you having to sell the property way below what it’s worth, or the buyer will simply walk away and you’ll have to go through the process all over again.

Even if a buyer is willing to buy a house “as is,” they can still have an inspection and decide not to buy the property if issues arise that weren’t listed on the seller’s disclosure. A way to be prepared for this is to have your own inspection done before you list the property, so you are aware of any and all of the issues.

How much do I lose selling a house “as is”?

There are many factors that impact the home’s final sale price and how much you could lose selling “as is” rather than making repairs and selling a turnkey property. It really depends on the current state of the overall market, the local market, and the state of the property.

A property selling “as is” with no major structural issues will be in a different situation than a property selling “as is” with a crumbling foundation. Your agent will have a good idea of the local market and be able to advise you on how much you could lose selling “as is.”

One option some sellers choose is to sell their home “as is” to an investor or iBuyer company (instant buyer) for an all-cash offer. This allows the seller to skip the repairs and showings and get a fast closing. But the convenience comes at a cost. Investors who fix and flip houses pay significantly under a home’s value compared to what the owner might get selling “as is” on the open market with an experienced agent.

iBuyers typically pay more than flippers, up to 85% or higher of a home’s value. With investors or iBuyers you might lose tens of thousands of dollars. However, depending on the “as is” condition of your home, an all-cash offer from a house-buying company might be the solution you need.

HomeLight’s Simple Sale platform could be another option for you.

What if I want to address a few issues?

If you do want to tackle some repairs or a bigger issue like a new roof or kitchen upgrades, these are a few of the projects that lead to a good return on investment (ROI). The type of projects to consider also depend on why you want to sell the home “as is” in the first place.

If you need the money that a home sale will bring, or if you’re on a strict timeline because of a relocation, these projects might not be a good fit. But, if you’re on the fence and have the time and money, here are some of the best ROI projects according to NAR’s latest Remodeling Impact Survey.

  • HVAC replacement
    • Average investment: $8,200
    • Average ROI: 85%
  • New wood flooring
    • Average investment: $4,700
    • Average ROI: 106%
  • Hardwood flooring refinish
    • Average investment: $2,600
    • Average ROI: 100%
  • Insulation upgrade
    • Average investment: $2,400
    • Average ROI: 83%
  • New garage door
    • Average investment: $2,100
    • Average ROI: 95%
  • New roofing
    • Average investment: $7,500
    • Average ROI: 107%

Depending on the state of the property, doing some renovation could really impact the final sale amount because “the discount that’s usually associated with selling ‘as is,’ is not usually the discount the seller wants,” Gaskins explains. “A red flag goes up and people wonder what’s really wrong with the property.”

A kitchen in a house that is selling as is.
Source: (Bailey Alexander / Unsplash)

Q&A: More expert tips about selling a house ‘as is’

How can I determine what my home might sell for in its current condition?

Before you decide to sell “as is,” you can get a ballpark idea of what your home might be worth with a free estimate from HomeLight’s Home Value Estimator (HVE). Our online estimator uses information from multiple sources to give you a detailed analysis that can help you determine your best next steps.

You can also work with a top agent who will provide a comparative market analysis (CMA) or consider getting a pre-listing appraisal to determine your home’s value.

Is it hard to sell a house “as is”?

This answer is very dependent on the current market and the actual state of the property. In a hot seller’s market, it’s easier to sell a house “as is,” but if there is a lot of inventory for buyers to choose from, they may lean toward a move-in ready property. Additionally, a house that sells “as is” but is in generally good condition may be easier to sell than a house that needs a new roof or foundation repairs.

Does an “as is” sale mean I don’t have to disclose major issues?

There are federal and state laws that require you to disclose safety hazards and material defects. As a seller, you can be held liable if you don’t tell the buyer upfront about things such as water damage, soil movement, or the presence of asbestos in the home. Selling “as is” isn’t a free pass to hide known issues.

Decision time. Should you sell your house “as is”?

If you want to sell your house “as is,” the first step is to find a top agent to partner with through the process. Working with an agent who knows your local real estate economy is paramount to making the right decisions when it comes to listing the house “as is” and potentially negotiating with your buyers.

As you make your decision, consider the pros and cons to selling “as is” as well as your current situation. If you don’t have the time or funds to make repairs or upgrades, want to attract a cash buyer, need to move quickly, or are trying to sell an inherited property, selling “as is” may be a good choice. Keep in mind that even if you list the home “as is,” you still have the option to negotiate repairs with the buyer, which could help the home sell.

Header Image Source: (Denis Oliveira/ Unsplash)

Leave a Reply