Trying to decide whether to sell your house as is or invest in repairs? Your choice will likely depend on a number of factors, including the condition of your house and the state of the housing market.
Before you put your home on the market, learn which home improvements can boost the value of your home and improve the odds of a quick sale and which may turn out to be a waste of time and money.
If you’re considering selling a house as is, you’ve likely sold a house before and still lose sleep over how the buyers haggled over every little imperfection. That or you’ve heard horror stories about the seller who attracted a great offer only to get taken to the cleaners over the inspection.
Anticipating this type of situation is what leads many sellers to say upfront, “Forget about asking me to make repairs. I’m selling this house as is.” When the inspector comes in and declares the old electrical panel a fire hazard (it’s operated just fine for years!) you need to protect your sale price from sinking.
We get it. With the average buyer negotiating $14,000 in savings from the inspection, your concerns are valid. And selling “as is” can be an attractive option for sellers who either don’t have the money to make repairs or don’t want the hassle.
However, as with everything in the world of real estate: it’s complicated. You don’t want to use the “as is” label as a fail-safe for dodging any negotiations; you’ll need to temper your expectations a bit. That said, it’s still a viable strategy if you go about it the right way.
Here we’ve compiled the myths and risks about an “as is” sale so you don’t go in blind. Then, we’ve synthesized a simple step plan for how to sell a house as is (your house isn’t perfect, but it’s worth a great price!) with the help of several real estate experts who’ve facilitated these deals time and again in their careers.
Misconceptions around selling ‘as is’
Let’s say you decide to list your home as is. And a buyer makes an offer. The purchase contract will most likely still include an inspection contingency, which gives buyers a built-in window to walk away. It might go a little something like this. The inspector discovers a previously unknown issue with the roof. Under the inspection contingency, the buyer asks you to repair it (even though you listed as is). You counter, “No, I wanted to sell as is.” And the reality is, despite you putting your listing on the market in as-is condition, buyers may still ask you to fork over money for repairs. And that’s when you’ll face a tricky decision. If you have to go back on the market, you may have to sell for less money. So your agent may or may not advise you to fix the roof (or whatever the inspector happens to find) anyway. It often will make more sense to keep the buyer happy and the transaction moving forward.
That said, if you do decide that listing your property “as is” is the best option for you financially, here are a few things to consider.
There are two routes to selling your home as is: selling with an agent on the open market and selling as is to a cash buyer. In the first scenario, it’s critical to find an experienced agent who has dealt with as-is sales before. They will be able to advise whether selling “as is” is genuinely the best option for you. Instead of listing the house as is and deterring buyers upfront it often makes buyers assume there is a massive problem with the home a more cross-that-bridge-when-you-get-there approach. Get buyers in the door, and then once you receive an offer requesting you to paint the garage, your agent can have that conversation with the buyer’s agent. It might be better to find a cash buyer when learning how to sell a house as is
2. Connect with a cash buyer who purchases ‘as is’ homes.
On the one hand, if you don’t list as is, you can open up your potential buyer pool. Buyers tend to feel more comfortable offering a higher price knowing they can ask for necessary repairs during the inspection phase (and you’re not saying upfront that you’re unwilling to work with them). Alternatively, you can find a cash buyer off-market where many investors and flippers prefer to buy homes. But that could, and most likely will, affect your price. If the buyer has to go in there and build some sweat equity or they’re an investor looking for profit, they’re going to want to pay less. Most sellers in this position, however, would like to still command a decent and fair price. To increase your chances of securing a solid offer, one option is to sell to cash buyers like Wasatch Home Partners. With Wasatch Home Partners, you get to sell your house in any condition for a fair price offer.
Rather than Google “sell my house for cash” and see who pops up in Google, with Wasatch Home Partners, you’ll be able to get rid of that worrisome property in a matter of days.
This is critical because among an array of rental investors, flippers, and high-tech buyers, your house could be worth more to one than another. We work with all of these different buyer types so that we can serve a wide range of sellers. All you need to do is answer a few questions about your home, and we’ll actually introduce you to the highest bidder.
3. Disclose, disclose, disclose.
If you’re choosing to sell as is because you already know about significant issues with the house you’re not willing or able to fix, you always have to disclose that information. A lot of sellers say, ‘I’m selling it as is I don’t even want to talk about what I got going on here. But that’s not legal, plain and simple.
Selling as is isn’t a loophole to avoid telling buyers your roof is leaking or the home needs all new plumbing. Most states have mandatory disclosures and failing to disclose information is a big risk. That can come back to bite the seller because if it’s proven that they did not disclose something they were fully aware of, they can be held liable after the close of escrow. In his eyes, sellers are better off scaring away a buyer than putting liability by their side by not disclosing. When in doubt, be honest. Make sure to disclose liabilities and factor repairs into price when learning how to sell a house as is
4. Factor ‘as is’ into your price.
The list price is a strategic decision you make based on the property and the condition you’re going to sell it in. But the actual sale price is dictated by the terms the seller is going to set. In other words, if you’re not willing to make repairs and you’re setting that boundary, it will affect your sale price. The other pricing trap not to fall into and the right agent will be able to advise on this is assuming you should reduce your list price by the same amount repairs are estimated to cost.
Just because your home needs a new $25,000 roof doesn’t mean that buyers can ask for an additional $25,000 off the list price if you’ve already strategically listed your home $50,000 below neighborhood value.
The buyer doesn’t have grounds to demand an even lower list price when they already have $25,000 in equity.
It’s just another reason to ensure you’re working with an experienced agent who can justify the list price when an offer comes in and a buyer starts to nickel and dime.
5. Don’t strike cleaning and decluttering from your to-do list.
If you’re selling as is on the open market when showings are necessary, cleanliness pays (quite literally). While you may not want to replace the furnace or upgrade old kitchen cabinets, cleaning and decluttering goes a long way toward attracting a bigger buyer pool when you’re standing strong with as is. The minute you think you’re going to list your home, no matter what condition your home, before you do anything, call your agent. Because if there are projects you’re questioning before you list even as is you should know if they’re truly worth your money or not.
Do Homebuyers Want Fixer-Uppers?
Some homebuyers say they want to buy fixer-upper homes, but they’re generally looking for those that require only light cosmetic repairs. Buyers who gravitate toward fixer-uppers are those who either don’t qualify to buy a more expensive home or want to make a profit by fixing up the home themselves. Most “fixer-upper” buyers are willing to do simple repairs, such as painting the walls, putting in new carpeting, or replacing light fixtures. They don’t want to rebuild a foundation or move walls.
Fixer-upper buyers will discount the price of the home to allow for the repairs, then discount it a bit more for the inconvenience. Suppose a home would be worth $100,000 if it had a new roof. A new roof might be expected to cost $10,000. However, a buyer will most likely not offer $90,000 for the home. They could buy an identical home with a new roof for $100,000 and save the hassle.
A buyer for this type of home might offer $75,000 or even less. The seller would be better off to pay for a new roof and sell the home for $100,000 in this scenario.
Keep in mind that many buyers will not buy a home that needs a new roof. They worry that the work involved will cost more than what they anticipate. Perhaps replacing the roof would involve tearing off the sheathing and repairing rafters, which could add to the cost. Most buyers want a home that’s in move-in condition. You can limit the number of buyers who might be attracted to your home by not making repairs.
Before Fixing Up Your Home
Smart sellers will weigh the cost of the proposed improvements against the home’s market value after the repairs or upgrades are completed. Such an improvement might not be warranted if an upgrade won’t provide a good return on the investment (ROI). Before you decide to lift the roof and install skylights in the master suite, realize that kitchens and baths carry the highest return.
Other improvements with a high ROI include:
• Replacing siding with fiber-cement or vinyl
• Replacing windows
• Adding a deck
• Swapping in a steel front door3
You might also want to take an afternoon to tour other homes in the neighborhood with your agent. Note the condition and amenities in those homes. Compare homes in the neighborhood to yours. If most of them have upgraded kitchens, you should concentrate on fixing your kitchen. These homes are your competition. This doesn’t mean you have to buy designer appliances and tear out the cabinets, but a minor kitchen remodel might be a good investment. Sometimes simply painting oak cabinets a darker color and installing updated hardware can give your kitchen an all-new look.
Fixing Up Your Home
Make a list of everything that’s defective, broken, or worn out. Buyers might wonder what else in the home has been neglected if they spot problems or malfunctioning systems as they tour your home. Minimum improvements to consider making before selling your home include patching holes and cracks in the walls and ceilings and fixing broken appliances. Repair leaky faucets.
Replace broken window glass and repair the roof if necessary. Change any dated light fixtures or ceiling fans. Fix code violations—any serious buyer will have the home inspected.
Replace worn or stained carpeting. Repaint dark or marred walls with neutral paint—not white. Replace old drapes and window coverings.
Keep in mind that empty homes don’t show as well as furnished rooms, but battered furniture can detract from your home’s appeal. Consider upgrading your furniture if it’s in bad shape. You can always take it with you when you go.
Before you decide to sell your home as is, learn as much as you can about the housing market and other homes for sale in your area. Then, consider which home repairs are most likely to give you the highest return on your investment.
Sell Your House “As Is” To a Verified Cash Buyer
At Wasatch Home Partners, we’re ready to buy your house in any condition. You don’t have worry about the hassle and costs of repairing and renovating your house. If you’re happy with the offer, you can skip the home staging, showings, and (most likely) the bulk of that inspection haggling plus you don’t have to pay any commission to real estate agents. Get a Fair offer for your Home Today!