What Is An “As-Is” Home Sale?
Back in the early 1990s, buyers would offer a price assuming the house had no defects, but then when the buyer found defects, they would demand the seller fix them.
Buyers would go through the house and find something for the seller to fix; the tile has a crack-fix it; the screen door is ripped – fix it: the faucet leaks – fix it. This was good for the buyer but tough on the seller. Somewhere down the road, listing agents and sellers both realized it would be better to market the property “as is”.
As-is means you don’t want to pay for every little thing the buyer finds during the escrow process. So, how can you make selling an “as is” home both efficient and financially rewarding?
If you want to avoid investing money on improvements, your asking price should typically be reduced by the amount it would cost for the future buyers to make their own changes.
All sellers, even if they plan to sell their home “as is,” are required to disclose known defects about the property and to provide information on any issues that a buyer may ask about, such as termite damage, a wet basement, non-working appliances, plumbing leaks, etc. So, before you come up with an asking price, you need to know what defects or repairs you home will need.
Have a home inspection ahead of time. Use the inspection report to show buyers everything up front that is broken so the offer price already reflects those things and the buyers won’t bug you to “fix stuff.”
An “as is” sale doesn’t mean buyers won’t still try to negotiate repairs. Home repairs are subject to negotiation regardless of how the property is advertised. However, since the buyer has received the inspection report and knows in advance the problems that exist, the seller should not have to spend time throughout the process fixing things or renegotiating the price. Deciding on some inexpensive repairs may a good idea and could sell your home faster, depending on your situation and the home’s condition.
When listing your property, you should make it clear in the description that it’s for sale “as is.” This not only serves as a signal for bargain hunters, but also weeds out buyers who don’t want the bother of a fixer-upper from wasting your time.