If you have even a passing interest in real estate, then you have surely heard of the concept of selling a house as is. As the name suggests, this is when an owner offloads their property in its current condition without undertaking any extra repairs or renovations. But what does selling a house as is mean for owners? What are the pros and cons of selling a house as is? And how to sell a house as is in a way that benefits you? This blog will introduce you to the concept of selling your house as is and share with you some of the tips that can help ensure a smooth as is home sale.
Related: How to Sell Your House Fast: 11 Tips
Selling a House As Is: A Definition
Like we mentioned above, selling a house as is refers to a sale that does not involve any repairs or renovations to the property. In other words, the buyer will purchase the real estate property in its current condition and with all its existing issues. However, this does not mean the property seller can just offload a damaged home on an unsuspecting buyer. In fact, the property owner is legally required to disclose the faulty aspects of the home. Moreover, the purchase agreement in an as is home sale will often contain contingencies that enable property buyers to opt-out of the real estate deal if the home inspection reveals undisclosed damage.
Let’s now check out some of the pros and cons of selling a house as is.
The Pros of Selling a House As Is
It might seem odd upon first consideration, but selling a house as is does offer a lot of benefits to the home seller. Here are the main ones.
1- It is a cost-effective option for some owners
Selling a property as is can be a good decision for owners who can’t afford to make the repairs. If the damage is too severe, expenses can quickly snowball into a massive investment. Undertaking major repairs is a risky strategy for property owners with tight budgets and selling your house as is to a real estate investor might be the safest approach.
2- It is quicker and less stressful than a regular property sale
Selling a property can be a tedious process. The sale can drag out for months and the arduous negotiations with multiple potential buyers can feel overwhelming after a while. Add on to the process the time it takes to complete renovations and it can prolong the whole affair even more. If you are not willing to go through a regular property sale, an as is home sale might be a convenient way of selling your house as quickly as possible.
3- Selling a house as is can provide financial relief to distressed owners
It is not uncommon for property owners to find themselves in a precarious financial situation. Whether it is mounting debts, failed business ventures, or unexpected job loss, there are many cases where capital is greatly needed. Selling a house as is can provide timely relief to these distressed owners when they need it the most.
After going over the advantages of selling a house as is, let’s now check out some of the cons of selling a house as is.
The Cons of Selling a House As Is
As you would expect, selling a house as is does not come without a set of cons. Here are some of the disadvantages that you need to navigate if you want to sell your house as is.
1- You will receive low ball offers
The first challenge that you need to face when you sell a house as is is the low ball offers that you will inevitably receive. Due to the negative perception of these home sales, buyers will try to drive the price as low as possible. It is not unusual for potential buyers to make offers that are far below the market value of your home. Needless to say, landing a good deal can be challenging when buyers are aggressively trying to push the price down.
2- You will lose out on potential profit
Selling a house as is can prevent you from making a potential profit. In some cases, this profit can be achieved with some simple repairs and renovations. So how much do you lose selling a house as is? The answer to this question depends on the extent of repair work that is needed as well as your ability to cover it. If only minor repairs are needed, you could end up leaving quite a bit of money on the table by going the as is route.
3- You can end up with legal problems down the line
Selling a house as is does not absolve the seller from all liability. In fact, the buyer can sue for damages if they find issues that the seller did not disclose. The real estate investor can still take legal action long after the purchase was finalized.
In the next section, we will outline a simple step by step guide to selling a house as is quickly.
How to Sell a Property As Is in a Few Simple Steps
The guidelines below should help you navigate the challenges of as is home sales and get the best possible deal for your property.
1- Inform your real estate agent
If you are planning on working with a real estate agent, the first thing you should do is inform him/her of your intentions. This will enable your agent to limit the scope of potential buyers to those interested in an as is sale.
2- Find out how much your property is worth
The next step you need to take is determining the value of your income property. This is what allows you to set a realistic price that reflects the current condition of the home. There are several ways to do this. You can carry out a comparative market analysis and figure out the value by looking at similar properties or you can simply hire a professional appraiser to evaluate the home.
Related: How Much Will an Investor Pay for My House?
3- Determine what you need to disclose to the buyer
Disclosing issues in the property is a critical step of selling a house as is. Here is what you are legally required to disclose in most states:
- Structural defects
- Mold
- A leaky roof
- Damage stemming from termites
- Electrical issues
- Liens and other issues with the title
It is important to note that disclosure laws vary from one state to another. For example, California’s laws are very strict relative to other jurisdictions. In fact, the seller is required to disclose even the most minor of issues like simple plumbing problems. Other states that have relatively strict laws include Florida and Ohio. Conversely, states like Massachusetts, Maryland, Texas, and Missouri have more limited requirements and place the onus on the buyer to conduct a thorough inspection.
Related: The Best Home Inspection Tips for Sellers
4- List the property for sale
As always, working with a real estate agent is a viable approach. But if you feel that you can handle the process by yourself, selling a house as is by owner (FSBO) is an option worth considering. Going this route gives you more control over the sale and saves you thousands of dollars in agent fees.
As for where you can list the property, look no further than Mashvisor! Listing your property on the Mashvisor Property Marketplace will allow you to reach thousands of experienced real estate investors who are familiar with as is sales and are highly likely to engage with your listing.
Some Extra Tips to Ensure a Smooth Sale
Here are some tips for selling a house as is that complement the guidelines above.
- Get repair estimates before listing the property. This will allow you to set a fair price and prevent you from settling for a low ball offer.
- Be honest with the buyer regarding the condition of the home. This is will help you offload the home faster and save you from potential legal responsibility.
- Be prepared to make some concessions. After all, as is deals are reliant on the flexibility of the sellers and their willingness to negotiate.
The Bottom Line
Whether it is by necessity or choice, selling your property as is can be a practical alternative to a traditional sale. As long as you implement the best practices outlined in this article, the process should be smooth and quick.
