When you list your home “as-is,” you’re offering the property to buyers in its current state regardless of what it needs for repairs or maintenance. You don’t plan to make any improvements to the house before closing, and you’re keeping the negotiations to a minimum.
If you’re trying to sell your home quickly or with minimal preparation, you might be considering listing it as-is. Before you put your home on the market, you should explore the benefits and drawbacks of this option to decide whether it’s the right choice in your situation.
Pros of Selling Your House As-Is
Although it won’t get you the highest possible price, there are plenty of reasons to sell your home as-is. The following are the biggest advantages of an as-is sale:
Fast and Simple Sale
Selling your house as-is can make every part of the transaction faster and simpler. Fixing up a home before putting it on the market can take weeks or even months, especially if contractors have long waiting lists. When selling as-is, all you have to do to get your house ready is tidy up and take the listing photos.
Less Negotiating
When making an offer on a home being sold as-is, buyers can still include a home inspection contingency so that they fully understand the condition of the home before closing. However, you won’t find yourself in the frustrating situation of haggling back and forth with a buyer about repairs that need to be completed.
Avoid Repair Costs
If your home isn’t in great condition, you could be looking at thousands of dollars in repair costs to fix everything up. Many homeowners simply don’t have those funds on hand. Selling your house as-is will greatly reduce your out-of-pocket expenses, which will free up your cash for your next home purchase or your moving costs.
Attract Cash Buyers
Cash buyers often seek out as-is sales because they can be good investment opportunities. When a buyer has the funds to purchase a home outright and pay for repairs, they can flip the house or rent it out for a great profit. Attracting a cash buyer is ideal for you as a seller because you don’t have to wait for the buyer to secure financing.
Cons of Selling Your House As-Is
Selling your home as-is does come with some significant drawbacks. Here are the downsides to consider before you list your house as-is:
Lower Proceeds
The biggest disadvantage of an as-is sale is that your profits will be lower. In most cases, houses that are listed as-is need significant repairs or upgrades. They almost always sell for less than move-in ready homes because buyers will have to put extra money into repairing the property.
Fewer Interested Buyers
While certain types of buyers seek out as-is home sales, the vast majority of buyers prefer houses that are move-in ready. If your home is a fixer-upper, you’ll have a limited pool of interested buyers. With fewer offers on the table, you don’t have as much negotiating power. Depending on the market conditions in your area, it may also take longer to get any offers on your home.
Risk of Sale Falling Through
If the buyer is applying for a mortgage, there’s always a risk of the sale falling through due to financing issues. Mortgage lenders need to confirm that the property is worth what they’re loaning to the buyer. When a home is in poor condition, the appraisal could come up short. In this case, the lender won’t approve the home loan, and the buyer may need to back out of the sale.
When to Sell Your Home As-Is
Selling a house as-is may not be the right choice in every situation, but it can be necessary in certain circumstances. The following are some of the most common reasons that homeowners list their homes as-is:
Strict Timeline
If you need to sell your home fast, listing it as-is may be the best choice. You could get your home on the market in a matter of days instead of devoting weeks or months to making repairs.
Limited Finances
You may have no other option but to list your home as-is if you don’t have the money to make the necessary repairs. If fixing up your home will put you in a tough financial situation, you might decide to forgo the repairs and put your home on the market in its current condition.
Hot Real Estate Market
As-is homes usually sell for less than move-in ready properties, but you can still make a great profit in a hot real estate market. If houses in your area are selling quickly and getting lots of all-cash offers, listing your home as-is could be a simple and easy way to sell it while still getting a return on your investment.
Inherited Property
Figuring out what to do with a property you recently inherited can be a stressful experience. If you know you want to sell the home, listing it as-is could be the easiest way to get the job done. Selling as-is can also be a great option when multiple family members inherit one home. Instead of trying to agree on repairs or upgrades, your family can simply sell it as-is and split the proceeds.
Tips for Selling As-Is
If you’re selling your house as-is, you probably want the process to be over and done with as quickly as possible. However, you can still strategize to get better offers and increase your profits. Here are three tips for a successful as-is sale:
Be Transparent
To reduce the risk of a buyer backing out of the sale, be up-front about the condition of the home. If you know what repairs need to be completed, include them in the listing description. The buyer is going to find out about the repairs eventually, so being transparent will just streamline the negotiations.
Highlight the Positives
All homes have marketable features. Even if your house needs a lot of work, make sure you highlight all the positives it has to offer. Showcasing the property’s potential will help it appeal to flippers and investors.
Set Your Limit
Buyers often make low-ball offers on homes listed as-is. While you should understand that the offers on an as-is home will be on the lower side, you should also have a minimum price in mind so that you don’t take a loss on the sale. Work with a trusted real estate agent to set a reasonable asking price and to evaluate offers as they come in.
It’s important to carefully weigh the pros and cons of selling your house as-is before you proceed. Listing your home as-is might be the best option if you’re on a strict timeline or don’t have the funds to make improvements to the property. Keep in mind, though, that your sale price may be lower and the buyer pool will be limited. If you’re not sure whether an as-is sale is the right choice, consult with a real estate agent who knows your local market.