The Basics: What Is “As Is?”
Selling a home “as is” doesn’t automatically mean the house is in bad condition. It’s a legal term meaning you’re not making any repairs or providing any warranties; the buyer gets the home exactly as it is, in its current state. Buyers may still ask you to make repairs, but you can refuse.
This doesn’t mean you’re exempt from disclosures, though. You still must disclose any issues about the property to the best of your knowledge. Different states have different laws governing real estate disclosures, and Michigan law states that sellers must fill out a disclosure form. The disclosure form covers everything from appliances to roofs to basements to sump pumps and more. If you know about problems with any of the items on the form, it’s unlawful to conceal them.
Pros of Selling Your Home “As Is”
SELLER’S MARKET
Real estate market trends in 2018 support a seller’s market in Michigan, which can make affordable homes hard to find. This high-priced, competitive market makes buying a fixer upper a more attractive option to many buyers. Though selling a home “as is” will drive down the price, it won’t make as big of an impact when affordable homes are hard to come by.
NO REPAIR COSTS
When you make it clear that you’re selling your home “as is”, it’s generally understood you won’t be making any repairs. If your home needs a new water heater, roof, or other expensive repairs that simply aren’t in your budget, you don’t have to figure out how to afford them. Though the costs of repairs will drive down the sale price of your home, you can still profit from the sale.
EASIER SELLING PROCESS
Selling a home “as is” takes a lot of responsibility off the seller. If you’re not able to take on pre-sale inspections, repairs & renovations, staging, open houses, and other preparatory stages, selling your home “as is” can make the process easier.
Cons of Selling Your Home “As Is”
LOWER SALE PRICE
A lower sales price is the biggest drawback of selling a home “as is”. Obviously, the home won’t get the same sale price as the fully inspected, fully repaired and remodeled competition. The severity of the damage will determine how much lower the sale price ultimately is. A real estate agent can help you lower your home’s list price fairly if you’re not sure.
BUYER DISTRUST
Sellers are required to disclose problems, but buyers know that not everyone follows the law. That means some buyers will expect damages that aren’t there and will lower their offer based on problems that don’t exist. Getting past this distrust is possible, but it can be a significant barrier.
LIMITED BUYERS
Fixer uppers attract buyers ready for a project, but many other buyers won’t be interested. If the necessary repairs are significant, the condition of the home might make it difficult to get financing, which will drive away all but cash buyers.
HAGGLING
Seasoned home flippers make a business out of selling fixer uppers, and these industrious buyers will probably make an offer as low as possible. With buyers starting at low-ball prices, you’ll have to bring sharp negotiating skills to the table to keep the buyer interested and still get a good price. If you’re not sure about this step, bring an experienced real estate agent into your corner to help.
Selling a home “as is” isn’t the best option for everyone, but it can make the home selling process easier in some cases. If you’re not sure whether to sell your home as is or pursue a traditional sale, ask a realtor. Experienced real estate agents have worked with all types of home sales and can point you in the right direction based on your home and your needs.