Should you sell your home as-is?
Preparing your home for sale takes a lot of work and sellers understandably get to the end of the preparation period and exclaim, “Francine, I’m exhausted. I’m just going to sell this home as-is and let the buyer take care of any issues themselves.”
Selling as-is from a seller’s perspective means they want to sell the home in its current condition and will not agree to do any repairs. The seller believes this will be the most hassle-free way to sell, but in my experience, I see the exact opposite.
Every seller has a unique situation and goals. This post explores some solutions when deciding if you should sell your home as-is.
Be sure to check out my video here:
Deferred Maintenance
Most sellers fall into this category of having a few deferred maintenance issues that should be addressed like that squeaky floorboard or repainting that dark hallway or clearing a clogged gutter.
For sellers with these types of maintenance issues, I highly recommend they address them prior to listing. Here’s why taking care of these issues will pay off:
Improving Seller Profit By Understanding the Buyer
A home that is move-in ready is more valuable to the widest net of buyers, and these buyers will be less inclined to negotiate for a price reduction or credits.
They say when giving a speech, know your audience. The same goes for selling a home. Know what buyers want. And working with both buyers and sellers, I can tell you that just about every buyer I meet wants a home that is in move-in condition.
Finding the right home at the right price and then dealing with the lending requirements, inspections, the appraisal and then moving is certainly a challenge in itself to buyer but to then move into a home that immediately needs repairs is something buyers know will just be too much.
As buyers tour your home, they will be making a mental list of all the things they will need to do. And as their list grows, their perception of your home diminishes and their perception of the value of your home diminishes, too.
Buyers notoriously overinflate the cost of repairs. What may actually cost you $2,500 in repairs, a buyer will think those same repairs cost $10,000 and then will tack on another $10,000 for the hassle. You think I’m exaggerating but I hear buyers say this every day.
Keeping the Sale Going
Most buyers will include a home inspection contingency in their offer. After the home inspection, the buyer will have the option to negotiate repairs, or worse, terminate the transaction. Extending your home for sale on the market just sends the message that there is something wrong with your home, and prospective buyers will assume the worst.
Home Financeability
Ignored major repair issues can make your home non-financeable for buyers seeking a mortgage to buy your home.
A failing roof, ripped carpeting, safety issues such as exposed wiring are just a few things that can bring a transaction to a halt.
As a seller, you will be reducing your pool of buyers if you can only sell to a cash buyer.
Buyers obtaining a mortgage will have an appraiser who will inspect your property, and if they find major repair issues, they will call it out. This means the buyer cannot get a loan to buy your property until these items are fixed. Trying to do repairs under tight timelines is very stressful so before you list, you’ll have the time to get bids from several contractors, determine the scope of work and materials, and have the repair done correctly, more economically and with less stress.
But what about sellers who have total fixers?
I listed a property that was in very poor condition, and one of the bigger ticket items with this property is the septic system had failed and was non-functioning. The city required that it be connected to the city sewer. To bring the sewer line to the house and do all the plumbing connections, the sellers were looking at about a $20,000 bill.
The sellers were not able to pay for this repair and they decided to sell the property “as-is.”
Here are the challenges the sellers faced:
- The property could not be financed and the sellers had to rely on a cash buyer only. This reduced the number of buyers who could purchase this property.
- Their buyer pool was diminished even more as not too many buyers would want nor be able to make this immediate and costly repair.
- The property did not sell at market value minus $20,000. It sold for about $75,000 less than if they had connected to the sewer system.
Even for total fixers, it may be worth it to spend the time and the money to make the repairs that will bring in more profit.
Solutions for Sellers: Paying for Repairs
Bigger ticket item repairs like a roof replacement can be cost prohibitive for sellers. Here are some options I offer to my sellers:
- Work with a roofing company that can accept payment at the time of closing. The bill will be taken from the seller’s net proceeds.
- Look into lines of credit (before you list your home) to pay for repairs.
- We will analyze if the repair would make sense for listing, selling and your bottom line. I’ll prepare a market analysis and a net proceeds sheet.
Solutions for the Overwhelmed Seller
Sellers believe that selling as-is will reduce their stress level. They think that they will just lower the price a little and just hand the home off to a buyer to do what they want.
This can have the opposite effect and in fact, could end up being more stressful.
For overwhelmed sellers, they typically just need some help with their property.
Reputable Contractors: I have a long list of reputable contractors from landscapers to house cleaners who can help.
Prioritizing: I work with sellers to prioritize what things should be addressed first so that the seller doesn’t get stuck on rearranging their linen closet while they should be focusing on taking care of that leaky faucet.
Resources: I also have a list of resources in the community who would love your donations of household goods.
Discussion: Sometimes sellers just need to talk it out. And once they do, their to-do list may not seem as bad as they thought. It also is good to talk about why they are moving in the first place and to focus on that goal. I’m a good listener! And we can chat about viable solutions.
You’ve Made this Far in the Blog Post – Now I Have a Shocker!
After you’ve read how I would advise sellers to take care of repairs prior to listing in order to have a smoother and less stressful transaction, put more money in your pocket and have your home appeal to the broadest range of interested buyers, I have this admission to make.
In our Olympia, WA purchase and sale agreements, all properties are sold as-is because a seller is NEVER obligated to make ANY repairs UNLESS they agree to do so in the contract.
There are no state laws or mandates that force a seller to make any repairs to their property, no matter the severity of the issue. Repairs to a property are negotiated between a buyer and a seller. A seller can refuse to make any requested repairs from a buyer, and therefore they are selling the property as-is.
In Conclusion
Although all properties are sold “as-is,” sellers could unintentionally be creating more problems and stress for themselves by trying to sell a home that does not appeal to many buyers, that will sell below market value, limits the buyer pool to only cash buyers, and will languish on the market.
My advice is to do your best to prepare your home for sale. I have many options to discuss with you regarding your particular situation. There isn’t a one-answer-fits-all so call me so we can talk about the best options for you.
In the meantime, be sure to check out my ultimate seller’s guide here!