Often, sellers will have to put in a little elbow grease and invest time and money order an effort to make the home look more attractive and “move-in ready” for buyers. A home that doesn’t show well is more likely to turn buyers off and send them in the direction of another listed home in the neighborhood.
Fortunately, if your home is in need of a little TLC and you don’t have the time, money, nor inclination to fix it up, you just may be able to sell it “as is.”
The question is, how exactly can you attract the right buyer who’s willing to dish out decent money to buy your eyesore?
Be Clear About the Home’s Condition in its Description
Don’t mislead potential buyers by touting your home as one that requires little or no work to bring it up to par. Be open and upfront about its condition, and specify that it’s being sold “as is.” This will help you avoid wasting your time on buyers who aren’t looking for a fixer-upper, and will save their time too. Anybody who is specifically looking for a fixer-upper will be looking for terminology like this.
Be Transparent With Disclosures
Just because your listing description includes phrases like “as is” or “needs TLC” doesn’t mean you shouldn’t be specific about the issues with the property that need to be addressed. Not only is it ethical for you to provide a disclosure of defects to a prospective buyer, it’s also a legal requirement. If you know about certain defects and do not disclose them to the buyer, you could land yourself in hot water.
Having said that, you’re only responsible for disclosing defects that you know about. If there are issues that you had no idea about, you may be excused from having to provide a disclosure. But if you intentionally hide a problem, the buyer could take you to court.
Price it Right
Considering the fact that an “as is” home will need to have some money invested in it to bring it up to par, you need to list your home accordingly. For example, if the property needs a new HVAC system and new windows installed – which could cost approximately $50,000 altogether – you should probably shave $50,000 off of the price that you would otherwise have listed the home for based on current market conditions in your neighborhood. If you don’t, expect offers to come in around $50,000 lower to accommodate for the costs associated with bringing the property up to snuff.
Appeal to the Right Type of Buyer
There’s no sense in going after a typical pool of buyers who is looking for a turn-key property. Instead, your marketing efforts should be focused on investors, contractors, or flippers who are looking to build their own equity into a property.
Be Prepared For Objections After an Inspection
When you list your home in “as is” condition, you are basically telling buyers that there will be no repairs made to the property before title is transferred. However, that doesn’t always mean that buyers won’t ask. The buyer might still want to have a home inspection done on the home to see exactly what condition it’s in.
If the inspector discovers something really serious that would require much more money to rehab the home, the buyer might ask for certain repairs to be made or some type of compensation after a home inspection is done. Home repairs can still be negotiated regardless if the property is advertised for sale “as is.” How you choose to respond is up to you.
The Bottom Line
It’s important to understand that selling your home in “as is” condition will most likely cut out a lot of prospective buyers who are looking for a home that’s in decent shape and is in move-in ready condition. Having said that, how you price the home and how transparent you are about the property’s defects from the get-go can make the marketing process and offer transaction much more streamlined.
Luckily, your real estate agent will know exactly how to market your home to the right group of buyers so you can sell quickly and get the price that the current market says you deserve.