There’s no perfect formula to calculate just how much you lose selling a house as-is, but don’t plan on getting top dollar. Still, this option can be the perfect solution for homeowners who don’t have the time or financial resources to complete the repairs their home needs.
You’re ready to sell your house, but you didn’t know all of the work associated with it — filling in nail holes with spackle, fixing that crack in the foundation, repainting. Then you heard you could cut the work in half by taking your home straight to market and selling your house as-is.
But just how much do you lose selling a house as-is?
We crunched the numbers and talked to an industry expert. If you’re thinking about selling your house as-is, keep reading to understand the pros and cons of this unique kind of home sale.
Understanding a few details about the standard home sale is essential to understanding an as-is sale.
In a typical home sale, home sellers agree to complete or pay for some repairs before closing. The repairs are usually identified by a home inspector who writes them into a home inspection contingency.
Sellers will also complete a seller’s disclosure. This document requires home sellers to detail issues the home has had and the repairs if they fixed the problems — although the specific requirements may differ by state.
By contrast, as-is homes are listed, well, “as-is.” In other words, the home seller won’t guarantee that everything is in working condition, nor will they complete or pay for closing repairs.
As-is sellers are also not required to complete a seller’s disclosure, but they must still meet federal and state disclosure standards. These standards are minimal but ensure that buyers know about dangerous conditions (such as lead paint).
Buyers may be intimidated by the lack of disclosure and fear that they’re buying a lemon, but there are many reasons a seller might list their home as-is that don’t put the buyer at risk. For example, the seller may be unable to pay for repairs upfront, unwilling to wait for contractors to finish the job, or want to sell with as little work as possible.
Selling a house as-is follows standard homeselling standards, with some nuances. To help navigate those subtleties, your first step to selling your house as-is is to contact an expert real estate agent with as-is experience. Your agent will guide you through the following steps:
Perhaps the biggest selling point (for sellers) of as-is homes is that the homeowner doesn’t have to get the house market-ready. Sellers can skip straight to getting their house on the market.
Determining a listing price is always a hard job, and it may be especially so for as-is homes, which typically sell for less than a standard home sale but still hold substantial value. An expert agent can help set a realistic market price that makes sense for an as-is home but doesn’t cut into your profits.
Your agent will also help you navigate the necessary disclosures and weigh whether or not to complete any optional ones. This may be a particularly good idea if your home only needs minor repairs, as it will give buyers peace of mind that they’re making a solid investment. This can also make it easier for buyers to secure a mortgage, if their lender has specific requirements.
Expect additional time on the market. Buyers can be wary of homes that aren’t move-in ready, and as-is homes are generally not considered so. Once again, your agent can help conceive the best strategy to make your home stand out from the rest.
Learn how much it costs to sell a house
If selling your house as-is seems like a good deal, consider this: You may be leaving money on the table. Making a few small changes can not only improve your listing price but it can also make your home sell faster.
Simple repairs net big returns on your investment. For example, replacing your out-of-commission garage door could get you a 97% return on investment; swapping out those old, leaking fixtures in your kitchen for new ones could get you an 80% return. But the real savings can come in the time spent on market.
In a survey by Coldwell Banker, 80% of respondents reported that they preferred a move-in ready home. So if you want to appeal to the majority of buyers and increase the likelihood of a fast sale, you may be better off investing in some renovations to get your house market-ready.
Just be careful not to invest so much that you can’t turn a profit.
“The first and most important part is you have to know your pricing. And you have to understand the vendors you work with,” says Jonathan Hodges, a General Manager for Orchard in Houston and Dallas-Fort Worth with nearly 20 years of real estate experience.
A professional like Hodges has established relationships with vetted vendors and can estimate how much a renovation will cost upon a walkthrough. While the rest of us might not have his insight, working with a professional like Hodges is a great alternative.
And if you’re having trouble deciding which updates to tackle to get your house market-ready, Hodges offers some advice: look at comparable homes. See what kinds of upgrades are selling and how much they’re selling for. This can help you narrow down the type of renovation you want to tackle (a kitchen upgrade vs. a primary bathroom overhaul) and choose granular details (a quartz countertop vs. granite).
Unfortunately, there’s no way to put an exact number on just how much you lose selling a house as-is. It will depend on the types of repairs your home needs, the competitiveness of your market, and a myriad of other factors.
Hodges points out one such factor that is often overlooked: Choosing not to make upgrades to a home means you potentially exclude yourself from multiple offer situations. It’s not just about the lower price, or extra time spent on the market — it’s about encouraging a bidding war.
“If you just do these minor repairs and you fix the cosmetics, you have a whole lot more people literally fighting for your home… And I think that's the big swing that brings tremendous value,” says Hodges.
There’s no easy formula to calculate how much you lose selling a house as-is. The term “as-is” encompasses too many different types of homes and sellers to do so. But that doesn’t mean you can’t make an informed decision about whether or not to sell your house as-is.
If you’re weighing your options, consider the following:
If all of these factors seem like a lot to navigate, leaning on the expertise of your agent is a must.
You’ve decided to fix up your home to get it market-ready, but you don’t know where to start. Your first step is to contact (you guessed it) your real estate agent. Not only can they help you determine which fixes will get you the most bang for your buck, they will likely also have recommendations for contractors and other vendors you’ll need.
While you may be tempted to Google some youtube home renovation tutorials and DIY your renovations, Hodges says it’s best not to.
“For the average customer out there, it really is worth the value to hire a professional and have it done right,” he says.
For example, says Hodges: Let’s say you decide to DIY a home paint job. You go to Sherwin Williams, you buy your own supplies and paint — and you do a mediocre job. Afterwards, the buyer is still going to think they need to repaint the home because they're seeing the imperfections.
“It's the minor details that we really pick apart on our walkthroughs,” he says.
Even if you save a few dollars upfront, you’ll bite into your ROI. Think carefully about selling as-is if you’re considering the DIY route. As-is might be the option for you, as you won’t have to deal with any materials costs or waiting time while you complete the project.
Property tech companies — companies that leverage software and tech for real estate — are revolutionizing the industry and bringing options to consumers who previously had none, including as-is sellers.
The decision to sell as-is or fix your home up for market doesn’t have to be binary. There’s another option: work with a service like Orchard.
At Orchard, our Concierge Service lets home sellers make updates to their home at no upfront cost to them. We’ll even project manage the upgrades, including hiring and handling all of the vendors and contractors. So if you want the advantage of listing your home as a traditional sale without the hassle of fixing it up, get started today.
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