Here’s The Facts You Need To Know About Selling A House As Is
Table of Contents
- 1. Carefully Weight the Pros and Cons
- 2. Market Your Home in the Correct Places
- 3. Why You Should Prefer Cash Buyers When Selling “As Is”
- 4. How to Properly Describe your Home Using “As Is” Language
- 5. Price the Home to Attract Multiple Offers
- 6. Consider a Pre-Sale Home Inspection
- 7. Get Estimates on Needed Repairs to Show Buyers
- 8. Consider Making “Some” Repairs Before Selling
- 9. Disclose Everything You Know About the Home
- 10. Consider All of Your Selling Options
- 11. Keep the House as Clean as Possible (inside and out)
- 12. Form a Plan to Tackle Low Ball Offers
- 13. Avoid Contingencies in Your Purchase and Sale Agreement
- 14. Have an Attorney Review your Purchase and Sale Agreement
- 15. Be Ready to Close Quickly
There are many reasons why you could be considering selling your house “as is” and this guide is here to help you to successfully do that.
But before you dive in headfirst into the tips in this guide to help you sell a house as is and avoid the potential pitfalls so you can get the most benefit for you out of the transaction.
You need to understand the following to level set an “as is” sale.
So what does selling your house as is mean?
When you sell a property as is, it means that the buyer will purchase and take ownership of the property in the exact condition it is in currently, including the good and the all the bad. The seller is stating that they will not make any pre-sale home improvements, and if a buyer requests that repairs are made, they will be typically be denied.
Here is what selling your home as-is does NOT mean.
You can not and should not intentionally hide or misrepresent defects or other important information to buyers that might cause them to not buy your home. In fact, many states still require your provide seller disclosures about the condition of your home.
Intentionally hiding or misrepresenting defects can result in serious legal action against you.
1. Carefully Weight the Pros and Cons
Selling a house as is might seem like the “no frills”, “no hassle” way to unload your home without having to make repairs. But that doesn’t mean selling “as is” is without its own challenges and downsides.
Pros of Selling a House As Is
Faster Sale (possibly):
Selling “as is” means you are selling your home fast and in its current state without needing to waste time on repairs. Pricing “below market” value due to necessary repairs needed may attract “flippers” and other cash buyers looking to invest, rehab and sell at a profit. Cutting out the bank means they can close on deals faster with less paperwork and red tape.
Avoid the Hassel of Repairs:
Whether due to finances, time restrictions, or simply a desire to avoid the headache of dealing with repairs and contractors, selling “as is” leaves all that mess to the new buyers.
Cons of Selling a House As is
“As Is” Properties Attract a Certain Type of Buyer:
Selling your home “as is” does two things, it disqualifies buyers looking for “move in ready” properties, thus reducing your potential reach and base of prospective buyers. It also attracts a certain type of buyer: generally, those looking to “low ball” you with an offer that makes sense for their wallet, but not necessarily your bank account.
Negotiation and Haggling:
Although negotiation is often part of any real estate sale, expect to deal with more of this when selling “as is”. Houses sold as is, often attract investors, rehabbers, and “flippers” who are looking to scoop up property as cheaply as possible. This creates an environment ripe for “haggling” and trying to get you to “close” at the lowest price possible.
Additional precautions generally need to be taken when selling “as is”. Further, depending on your state of residence, some states require certain disclosures even when both parties have “waived their right” to them.
2. Market Your Home in the Correct Places
No matter how attractive your home, property, or offer is to prospective buyers, if they don’t know it exists you’ll be left up a creek without a paddle.
Initial Marketing Steps:
- Hire a professional photographer (or use your own skills) to highlight the best of your house and highlight attractive features.
- Consider creating a video walk-through
- Craft an engaging and enticing home description
MLS (Multiple Listing Service)
Getting your house listed on your local MLS (multiple listing service) is one of the best things you can do to get your property in front of as many eyeballs as possible. The MLS is only available to licensed real estate agents and brokers, however, you won’t need to hire a “full service” agent in order to get your home listed.
Flat Fee MLS Listing:
For a few hundred dollars you can utilize a “flat fee MLS” service to get your site on the MLS. Best of all? The MLS will list your name and information so you can still act as the point of contact for the sale.
Discount brokers can also get you on the MLS, as well as offer a wider range of (limited) services at a “discount” commission. For example, discount brokers may charge 1% commission and will handle some to the admin and marketing work for you, such as taking photos and scheduling showings.
Social media is an incredibly powerful marketing medium you can leverage to get your house in front of highly targeted buyers in your area. Consider the following options:
- Facebook Marketplace – free to post and gets a LOT of attention locally
- Facebook organic posts – leverage the power of your network and audience to help you share your listing to interested parties.
- Facebook ads – have a budget you can allocate to ads? Running low-cost local ads is a great way to laser focus on the type of buyers you’re looking for.
- LinkedIn – lesser utilized, a post on LinkedIn can get seen by thousands across your extended network.
- YouTube – Did you make a video walkthrough? How about a photograph slideshow? Upload those to YouTube with the proper local keyword tags and you can get in front of more buyers with content you already have.
Online Real Estate Portals
Online real estate portals are an incredible resource for those selling their home as is without a real estate agent. Let’s look at some stats from some of the top sites:
- Zillow – 47 million visitors a month
- Trulia – 8 million visitors a month
- com – 93.95 million visitors a month
- Redfin – 93 visitors a month
*Data from SimilarWebWe can buy your house as-is. Get your fair cash offer here.
3. Why You Should Prefer Cash Buyers When Selling “As Is”
Selling your home to a cash buyer has a number of benefits and advantages, especially when it comes to selling a house “as is”.
Fewer Sales Fall Through
If you’ve been through a home sale in the past, you likely know all too well that deals regularly fall through, largely due to financing or the inability for the buyer to get adequately financed by the bank. These issues are even more frequent and pervasive when it comes to homes sold “as is” that may need additional work or repairs. Many banks refuse to finance a property until their conditions are met, which often include repairs.
Faster Closing Times
Banks are notorious for two things: paperwork, and moving at a snail’s pace. For example, cash deals can be done in a few as a handful of days, to a few weeks max. By contrast, conventional sales financed through a lender often take 4-8 weeks to close.
No Pesky Contingencies
Conventionally financed sales almost always come with contingencies such as inspections, appraisals, and “home sale” contingencies that rely on the buyer selling their other home before buying yours. Every contingency represents another possibility of the deal falling through and adds a level of uncertainty to your situation. By contrast, cash buyers know the “drill”. They know what to look for, what is important to them, what isn’t and what “as is” really means. They do their due diligence on their own, and make an offer based on their findings. Clear, cut, and dry.
4. How to Properly Describe your Home Using “As Is” Language
In its simplest terms, selling a house in as is condition means that you are selling your home in its “current state” with the general understanding that no modifications, updates, or repairs will be made prior to the purchase, and that the buyer is agreeing to buy the house in spite of any existing issues, faults, or defects.
What many home sellers don’t realize, is that the term “As Is”, is actually legal terminology, requiring that the buyer signs documentation indicating that they understand the terms of the transaction.
As such, certain terminology may need to be employed when describing the house. And even in cases where the buyer has waived their rights to disclosures, etc., the seller must still adhere to state-mandated laws regarding real estate transactions.
As Is Home Description
Even if your home needs work or repairs, you want to put your best foot forward and make the house seem as attractive as possible while being honest and upfront. You want to help the buyer paint a picture and envision why they want the home.
The better your description, the more opportunities you’ll get to sell your home to prospects.
Consider the Following Tips:
- Hit on all the highlights and be specific
- Carefully choose adjectives and descriptive words to make certain elements “pop”
- Match photos with words to draw readers in
Turn Negatives Into Opportunities
“Requires a lot of TLC but also has a lot of potential for you to make your own”
“Original owner property situated on a spacious lot with mature shade trees. Property is ready for new owners to transform it into something truly special”
Avoid RED FLAGS
According to data from Zillow, a report analyzing 24,000 home listing descriptions found that those properties using certain words were actually less likely to get clicks, views and offers.
A Few Red Flag Words Include:
- Fixer Upper
Use Words that Scream Value
Be Careful About Fair Housing Act Violations
Unbeknownst to many sellers, there are a number of legal restrictions with regards to the types of words and terminology that can be used in your home’s description.
Although this is NOT legal advice, the following may help you get a start on what NOT to do.
- Your description must not use any type of language that could be interpreted as discriminatory on the basis of: religion, gender, race, color, familial status, national origin, or disability.
- Words that May Raise “fair housing” red flags:
- Traditional neighborhood
- Bachelor pad
- Perfect for families
- Country Club
5. Price the Home to Attract Multiple Offers
We all want to get the best possible price for our home. You may even have a mortgage or other financial obligations to pay off from the proceeds.
However, pricing your home at the higher end of the spectrum might end up doing more harm than good. This will likely result in your home sitting on the market collecting dust and getting few (if any) offers.
On the flip side, coming in a little bit under market value can draw quite a bit of attention in the right market, bringing in more prospective buyers who might see even more value once they view the property. This can lead to a situation where buyers may end up competing against each other, inadvertently raising the final sales price as a by-product of the competition.
But How do You Establish a Baseline Market Value?
Start by analyzing the “comparables” in your local market. Then use large real estate portals such as Zillow, Trulia, etc. to gather further data on local market conditions, offers, time to sale, trends, and projections.
There is no perfect formula, but rather a blend of art and science when coming up with the “right” price.
Pro Tip: if you’re going to price competitively, just don’t go TOO LOW. While pricing slightly under market value may indicate a “good deal”, pricing too far below may signal to prospective buyers that there is something seriously wrong with the property.
6. Consider a Pre-Sale Home Inspection
Pre-sale inspections rank among the most common considerations for home sellers. No matter how long you’ve had your property, there may be underlying conditions you simply aren’t aware of. Below we’ll cover some of the potential benefits and downsides of having your home inspected pre-sale.
Cost of a Pre-Listing Home Inspection
Generally, this type of inspection will cost you around $200-$700 depending on the size of your home and where you live.
What Does a Pre-Listing Home Inspection Entail?
Similar to a “buyer’s home inspection”, this process is carried out by a licensed home inspector trained to inspect and diagnose the condition of major home systems, windows, doors, mechanicals and more for signs of damage, wear or other issues. Additional testing for lead paint, mold, radon, wells and more may also be purchased separately.
Benefits of a Pre-Listing Home Inspection for a Seller
- Provides the seller with an opportunity to fix any potential “deal breakers” before listing.
- Reduces the chance of low offers due to a list price that doesn’t fully take into consideration the true and full condition of the property.
- May help streamline the sales process, enabling the seller to close faster.
- Aside from the “negatives”, a home inspection may also reveal positives that can be highlighted in marketing materials (such as the condition of a furnace or how many years are left on a roof).
- Improved negotiation power given that the seller now knows the true condition of their property and what is or is not a major issue.
- Assists in helping the seller attract serious buyers who are ready to move fast.
Potential Downsides of a Pre-Listing Home Inspection for a Seller
What you are required to disclose when selling a house is dependent on state-specific laws where you reside. Keep in mind that even in states with more relaxed mandates, a seller is generally required to disclose any defects or conditions that are (or should be) known. This means that in most states, any issues discovered in a pre-listing inspection would likely need to be disclosed to prospective buyers.We can buy your house as-is. Get your fair cash offer here.
7. Get Estimates on Needed Repairs to Show Buyers
This simple, yet proactive step, can set apart your property from the competition. Doing your due diligence shows buyers your dedication to ensuring they get a great deal and know what is needed to transform your property from shabby to dreamy.
We suggest getting estimates from 3 contractors to provide prospective buyers with a range of options and averages to consider. This way they know what they are getting into and can make adjustments to their bids as needed.
8. Consider Making “Some” Repairs Before Selling
We know. You’re probably selling “as is” because you don’t want to (or can’t) deal with the needed repairs. But that doesn’t mean you should neglect everything.
Making a few simple and affordable upgrades can add serious value to your home and help make it look like it is not in such poor condition.
Consider These Repairs:
- Updated coats of paint
- Refinishing flooring
- Updating cabinet hardware in the kitchen and bathrooms
- DIY landscaping
- Repairing doors and windows
- Repairing broken or loose boards
- And more…
9. Disclose Everything You Know About the Home
WARNING: Don’t Fall Trap to This Common Misconception When Selling As-Is
Even in cases where the buyer agrees and has perhaps even “waived” any rights they have to disclosures, this does NOT waive you as a home seller from making any disclosures required by law in your state.
For example, in Massachusetts, house sellers are not obligated to disclose defects, but they are required to answer any questions about the home, systems or property truthfully. States that do not-require disclosure are known as “Caveat Emptor” or “buyer beware”.
In other states such as California, “as is” language is deemed to have given the prospective buyer notice of any patent defects and the buyer is, by agreeing to “as is” terms, accepting the property in the condition that is “reasonably observable”.
Yet even in states that acknowledge “as is” language, other disclosure requirements still need to be followed. For example, most states hold the seller liable for any failure (intentional or unintentional) to reveal “known” defects.
Due to the complicated and nuanced nature of real estate law on a per state, county and even city level, we always recommend consulting a real estate attorney when drafting “as is” language and to fully understand and adhere to requirements.
Here are some important items that you should disclose to potential buyers.
- If your home is located in a flood zone
- Heating system problems
- Underground oil tanks
- Plumbing or electrical system problems
- Sewage system problems
- Any asbestos insulation or building materials
- Any lead based paint or plumbing
- Foundation/slab problems or settling
- Basement water seepage/dampness
- Sump pump problems
- Roof problems
- Siding problems
- Termite, insect, rodent or pest infestation problems
- Fire and/or smoke damage
- Radon levels that exceed the acceptable EPA limit
- Chimney, fireplace, wood or coal stove problems
10. Consider All of Your Selling Options
Most of us are familiar with this time-tested and popular route to sell a home. This is the most “hands off” option, with the real estate agent handling everything from helping you come up with a price based on comparable, to listings, marketing, open houses, offer negotiation and more.
Discount realtors, as the name suggests, offer a discounted rate of commission in exchange for a set package of limited services. For example, they may list your home on the MLS, handle professional photography and schedule open houses, but you may be responsible for any additional marketing, hosting the actual open houses and more.
iBuyer is an innovative breakthrough in real estate buying and selling. An iBuyer company utilizes proprietary technology to weigh a number of factors in order to electronically compute and come up with an offer for your home (almost instantly).
In simple terms, the site values your home then makes you an offer on the spot for it. Fees typically vary between 6-7% depending on the market, but the process eliminates many of the hurdles and headache associated with home selling while also offering what is generally considered a “fair market value” for your property.
We Buy Houses
We Buy Houses and We Buy Ugly Houses are some of the original cash home buying networks, having expanded across the US over the years into a large number of markets. Their purpose is to connect homeowners looking to sell quickly to “ready to buy” cash buyers. Sellers can enter their property information online, We Buy Houses schedules a “viewing time” to check out the property, after which they provide a “no obligation” cash offer with no need for repairs, making an option worth exploring for “as is” sellers.
FSBO, short for “For Sale By Owner”, is a company that has been around for over 20 years, providing home sellers with resources, flat fee MLS listing, and other supplies and marketing services to sell their home without a real estate agent.
Flat Fee MLS
As mentioned earlier, “MLS” stands for “Multiple Listing Service”. The MLS is a database of all available homes for sale in a particular geographic area. This system is only accessible to licensed brokers and real estate agents. However, some brokers provide “entry only” services, allowing home sellers to pay them a flat fee to have their home listing placed on the MLS. In stark contrast to a full-service broker/agent scenario, the homeowner is responsible for handling all communication with interested parties, scheduling and showing the home, negotiations and all other aspects of the sale on their own.
Want To Learn More About Flat Fee MLS Listings?
If you want to save at least 50% of the Realtor commissions, check out our article about 9 Things FSBO’s Need To Know About Flat Fee MLS Listings
We can buy your house as-is. Get your fair cash offer here.
11. Keep the House as Clean as Possible (inside and out)
When selling a house, you must be ready to “show” it at a moments notice no matter the time or day of the week. This means the house needs to be “presentable” at all times.
Consider These Tips to Always be Prepared:
- Rent a storage unit to store extra items and to make the rooms appear more spacious
- Device a daily cleaning schedule
- Everything should have a “place”, meaning you’ll want things put away and organized
- Extra care should be given to glass, floors and other areas that draw attention
- Take the time to deep clean bathrooms and kitchens, including the grout between tiles
- Consider hiring a weekly maid service to deep clean once a week so that your “upkeep” is minimal throughout the workweek.
12. Form a Plan to Tackle Low Ball Offers
Low ball offers can be frustrating, but don’t let them get to you. When selling “as is”, there will be a perception from many that you may be “desperate” or highly motivated to sell. As such, a certain number of “low ball” offers are an inevitability.
Step 1: Determine Why They are Low Balling you
The reason behind the offer will help you determine your next step.
Common reasons include:
- Not being serious about buying
- A difference of opinion on value or repair costs
- Unfamiliarity with the market
- They are already at their maximum budget (or close to it)
- They are investors looking for bargain deals
Step 2: Your Options
- Accept the offer
- Counter the offer
- Reject the offer
- Ignore the offer
How you approach the offer will be dependent on your goals, situation and the reason behind the offer. Don’t be afraid to ask why they feel their offer is a fair price. Thank them for their feedback and counter with the reasons why you feel like your number more accurately represents the value of the home and what it has to offer.
Establish a “lowest price point” you are willing to accept prior to negotiations. Don’t reveal this but use it as a basis for negotiations and counter-offers.
13. Avoid Contingencies in Your Purchase and Sale Agreement
Contingencies are a commonality in traditional real estate deals. However, when selling “as is” they often do more harm than good for home sellers. They represent potential bottlenecks and points of failure that can cause a deal to fall apart without notice.
Contingencies to Avoid when Selling “As Is” Include:
- Home Inspection – allows buyers to “back out” based on findings of a conducted home inspection
- Mortgage Financing – allows buyers to back out of the deal if they cannot get financed
- Appraisal – allows buyers to back out based on the appraisal of the home being less than the purchase price
14. Have an Attorney Review your Purchase and Sale Agreement
Real estate contracts are at the center of any real estate transaction, setting for the rights and obligations of the seller and buyer alike. These contracts dictate the purchase price, closing date, what is and what is not included in the sale, and more.
Given the complexity and specialized nature of real estate law, it is always advisable to have an attorney review your purchase and sale agreement. Doing so can ensure that your rights are protected, that your liability is reduced, and that the risk of any negative outcomes as a result of the sale is negligible. Your attorney can also help explain what each clause means and what your obligations (or those of the buyer) are under those terms so that there are no surprises along the way.
Pro Tip: Some states have laws that require the physical presence of a lawyer at closing or as part of the closing process. Although this list is subject to change based on legislation, currently the following states require the use of an attorney when selling a house: Alabama, Connecticut, Delaware, District of Columbia, Florida, Georgia, Kansas, Kentucky, Maine, Maryland, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Dakota, Pennsylvania, Rhode Island, South Carolina, Vermont, Virginia and West Virginia.
15. Be Ready to Close Quickly
As previously mentioned, homes sold “as is” are often sold for cash without the need for traditional financing. As such, buyers are often eager to close on properties as quickly as possible.
This means that you won’t have the same type of “lead time” to get you affairs in order as you would with a traditional sale.
Here is a Quick Check List to Help you Get Things in Order:
- Gather all of the closing documents and other necessary legal paperwork in one organized place so that all contracts, etc. are ready to be signed.
- Notify everyone that you are moving (including the post office)
- Cancel your home insurance (schedule this cancellation for the date of closing)
- Cancel utilities so they are no longer in your name
- Ensure you have copies of all keys to provide the new owner(s)
- Collect all manuals, warranties and receipts for any appliances included in the sale to be provided to the buyer
- Preemptively begin moving things out of the home into storage or your new residence (the last thing you want to do is be rushed moving all of your things)
- Make sure your other living arrangements are in order (i.e. the move in date at your new place of residence)
With a little preparation and planning, selling a house “as is” can be a hassle-free way to unload your property quickly and efficiently. If you are considering selling your home in “as is” condition, follow the steps in this guide to make sure you have all of your bases covered and that you don’t run into any common pitfalls throughout the process.We can buy your house as-is. Get your fair cash offer here.
About the Author: Kris Lippi is the owner of ISoldMyHouse.com, the broker of Get LISTED Realty and an official member of the Forbes Real Estate Council. He actively writes about real estate related topics such as buying and selling homes, how-to guides for around the house and home product recommendations. He has been featured in Inman, Readers Digest, Fox News, American Express, Fit Small Business, Policy Genius, Lending Tree, GoDaddy, Manta as well as other major websites. Read more about us here.