Selling a House As-Is: What Homeowners Should Know Before Choosing a Buyer

Not every home is ready to be put up for sale. There may have been deferred maintenance projects or repairs that simply never got done. Your current home would be ready for improvement projects but you simply don't have the income or time to invest into improvements.

The same thinking applies if you're the owner. Should I invest time, effort and money into renovating my house if I need to sell it anyway?

There are many options and details for selling a house AS-IS or without repairs, but you should fully understand the options and implications before making any decisions.

What Exactly Does that Mean When Selling AS-IS?

When a house is sold AS-IS it is placed on the market for sale, rather than making any repairs or improvements prior to putting it up for sale.

For instance, someone may purchase a home with the intention to renovate and remodel, but may encounter a multitude of expenses and repairs needed in the process. Instead of investing time and energy into repairing or replacing flooring, carpets, and fixtures in the bathrooms and kitchens, and roofing, the next best option may be to sell it AS-IS.

This choice comes with its own considerations, however.

You wouldn't be absolved of all responsibilities and liabilities regarding the home just because you're selling the house AS-IS. Oftentimes states require disclosure of any known deficiencies with the home, and may also require buyers to conduct their own inspections on the property, regardless of its condition.

This doesn't mean that selling a home in it's current condition is completely out of hand, just that a few things must be taken into consideration.

When Should You Consider a Selling My Home AS-IS?

Depending on certain circumstances, the choice may present itself to fix-up a current home or sell it as is.

Below are a few reasons why selling a house in it's current condition may benefit a home seller:

The Repair Cost Escalates Rapidly

When repairs are done a seemingly small or moderate price tag can quickly balloon and spin out of control.

You may discover that not only does the house need new windows but new drywall because of rotting wood from leaks, or a problem with the electrical system.

The costs can add up even quicker if cash flow is limited. This can also be the time to sell it AS-IS.

Just keep in mind that the next owner will most likely budget in any potential repair costs for the asking price.

Always budget for repairs, then determine whether the increase in sale price can exceed the cost of improvements.

You Should Move, But Don't Have Time for Improvements

Sometimes life moves quickly, and you may have limited time or opportunity to make improvements but know you must sell your current house for whatever reason. Perhaps you've gotten a new job somewhere else, or need to be closer to family.

You may get tired of the constant hustle and bustle of trying to sell your current home while you're trying to find new housing.

A cash offer can help you avoid unnecessary hassle.

All that matters is that both parties agree on a timeline and date of closing.

Do not accept any verbal agreements just yet, and always put it in writing.

You Inherited the Home But Don't Want or Need It

Inheriting a house can be a good or bad experience. Either way it may entail plenty of hassle. Sometimes the location may not appeal to everyone, the house may need significant repairs, or it may simply just come with too many unwanted attachments.

Depending on how much money the estate is worth, there may also be complications with settling the estate if multiple people are involved. The house can be in another state, or simply contain unwanted clutter and furniture that has been sitting in storage or unused for quite some time. It definitely doesn't sound like a burden that you would want to keep.

Selling may sound like the best option, but be sure to clear any confusion about title or probate first.

Probate laws cover a variety of topics including who may buy the house, and under what conditions the sale may take place.

Your Rental Property Has Become Too Much

Rental properties can provide good investment income but they can also create more problems than solutions if the property is vacant, requires several repairs, or is a general hassle to upkeep.

This could be an opportunity, as selling might free up some extra funds or create a better investment opportunity. Again, before making any decisions evaluate the property's sale price and income generating potential, versus what it could sell for if renovations occurred.

AS-IS doesn't always mean worthless, but rather a realistic fair market value.

Should I Work With an Estate Agent or a Cash Buyer?

Now that you have made a choice on whether to sell as is or not, the next question is whether to sell it directly to a cash buyer or put it up for sale.

Both options involve a risk and reward, and should be carefully considered before proceeding.

Listing my House on the Market

Listing your house with an estate agent can be a great way to earn a good offer. Once the home is put up for sale, agents will advertise the house, take photos, show the home to potential buyers and negotiate offers. If a house is desirable then there will be plenty of competition for the home. It does take time and effort to prepare houses for sale, especially if repairs are needed. Once an offer is accepted the process becomes a waiting game: the buyer's mortgage application has to be approved, and the house condition has to pass inspection.

Once everything has been approved it can still take months to finalize the sale. On top of that there are additional expenses associated with selling a house. You'll also have to pay any estate agents involved with the sale.

If the time and reward seem desirable then definitely consider this option.

Selling directly to a Cash Buyer

A cash buyer can speed up the selling process. Rather than advertising or showing the house, the only requirements are usually a phone call and possibly an inspection of some sort.

Depending on the arrangement, there may also be no repairs needed before the sale. It's a fast and easy way to finalize a potentially stressful process.

An example of a direct cash home buyer is Eagle Cash Buyers. Simply apply for their direct home buyer program and you can find out what your house is worth to them. You can submit your contact info and have a conversation about your expectations for the sale.

The biggest draw to this kind of sale is convenience. You won't have to prepare the house, and show it to numerous buyers throughout the process.

It is important to remember that a cash offer isn't always a good offer.

Some cash offers may require a lower price than traditional offers, some may hide terms inside the fine print. It pays to compare offers from each source.

What if an Offer is Made? How do I Know if it is a Good Offer?

If a choice between two offers is given, rather than accepting the cheapest offer and rejecting the highest, try comparing the offers. What does this mean exactly?

First, determine a fair market value for your home. A good starting point would be similar homes in your area and their sale prices. If you're unsure, a local estate agent can help. This value should reflect the general condition of the house as well as its location.

Next, the costs associated with each sale should be taken into consideration.

If the cash offer seems low be sure to take into account any expenses, repairs or commissions that come with a traditional home sale.

If the costs seem equal, then the offers can be compared based off sale price.

For instance, if your home's fair market value is $300k and after estimating the costs associated with a traditional estate sale, the total seems to nearly equal the cash offer, the difference between the two options might be the sale price.

Now consider how much each option will actually net you. The $300k traditional estate sale offer would result in roughly the same amount as a $290k cash offer, minus the cost of any repairs and expenses.

Always be aware of other conditions attached to any offers as well.

Can the sale price be negotiated or altered in any way? Can any expenses be waived? Which party pays for the closing costs?

If something doesn't make sense it's always best to ask for clarification.

The Process After Accepting an Offer Seems Simple Enough

When an offer is accepted the next step is to discuss the closing and necessary paperwork. After a buyer has gone through your information they may also conduct an inspection of their own. If the offer is made and the counter offer accepted, both parties will need to set a sale agreement on a specific sale date.

In most cases a closing attorney, title insurance company or escrow company handles the process. This is also when any problems with the sale would surface: undisclosed mortgages, liens against the property and even disputes of ownership can appear here. Estate properties may require additional paperwork as well.

After necessary documents are finalized in either case, the property is officially sold and the seller receives the necessary settlement proceeds. Even if an accelerated procedure is made sure not to finalize any big plans until the procedure is guaranteed to go smoothly.

Considerations Before Signing any Papers

Selling a house AS-IS comes with its own pros and cons that should be taken into consideration. While convenience and speed can be very attractive there are some sacrifices that must be made. A lower sale price, less desirable terms, or even additional paperwork and expenses should be considered when comparing selling methods.

The decision to make repairs or sell AS-IS should depend on individual circumstances. Either option should be thoroughly considered, along with the time and expenses needed for each. Always remember to compare offers, and ask as many questions as you need to before signing any papers.

Don't forget that you don't have to renovate or accept the first offer given.

The same thinking applies if you're the owner. Should I invest time, effort and money into renovating my house if I need to sell it anyway?

There are many options and details for selling a house AS-IS or without repairs, but you should fully understand the options and implications before making any decisions.

What Exactly Does that Mean When Selling AS-IS?

When a house is sold AS-IS it is placed on the market for sale, rather than making any repairs or improvements prior to putting it up for sale.

For instance, someone may purchase a home with the intention to renovate and remodel, but may encounter a multitude of expenses and repairs needed in the process. Instead of investing time and energy into repairing or replacing flooring, carpets, and fixtures in the bathrooms and kitchens, and roofing, the next best option may be to sell it AS-IS.

This choice comes with its own considerations, however.

You wouldn't be absolved of all responsibilities and liabilities regarding the home just because you're selling the house AS-IS. Oftentimes states require disclosure of any known deficiencies with the home, and may also require buyers to conduct their own inspections on the property, regardless of its condition.

This doesn't mean that selling a home in it's current condition is completely out of hand, just that a few things must be taken into consideration.

When Should You Consider a Selling My Home AS-IS?

Depending on certain circumstances, the choice may present itself to fix-up a current home or sell it as is.

Below are a few reasons why selling a house in it's current condition may benefit a home seller:

The Repair Cost Escalates Rapidly

When repairs are done a seemingly small or moderate price tag can quickly balloon and spin out of control.

You may discover that not only does the house need new windows but new drywall because of rotting wood from leaks, or a problem with the electrical system.

The costs can add up even quicker if cash flow is limited. This can also be the time to sell it AS-IS.

Just keep in mind that the next owner will most likely budget in any potential repair costs for the asking price.

Always budget for repairs, then determine whether the increase in sale price can exceed the cost of improvements.

You Should Move, But Don't Have Time for Improvements

Sometimes life moves quickly, and you may have limited time or opportunity to make improvements but know you must sell your current house for whatever reason. Perhaps you've gotten a new job somewhere else, or need to be closer to family.

You may get tired of the constant hustle and bustle of trying to sell your current home while you're trying to find new housing.

A cash offer can help you avoid unnecessary hassle.

All that matters is that both parties agree on a timeline and date of closing.

Do not accept any verbal agreements just yet, and always put it in writing.

You Inherited the Home But Don't Want or Need It

Inheriting a house can be a good or bad experience. Either way it may entail plenty of hassle. Sometimes the location may not appeal to everyone, the house may need significant repairs, or it may simply just come with too many unwanted attachments.

Depending on how much money the estate is worth, there may also be complications with settling the estate if multiple people are involved. The house can be in another state, or simply contain unwanted clutter and furniture that has been sitting in storage or unused for quite some time. It definitely doesn't sound like a burden that you would want to keep.

Selling may sound like the best option, but be sure to clear any confusion about title or probate first.

Probate laws cover a variety of topics including who may buy the house, and under what conditions the sale may take place.

Your Rental Property Has Become Too Much

Rental properties can provide good investment income but they can also create more problems than solutions if the property is vacant, requires several repairs, or is a general hassle to upkeep.

This could be an opportunity, as selling might free up some extra funds or create a better investment opportunity. Again, before making any decisions evaluate the property's sale price and income generating potential, versus what it could sell for if renovations occurred.

AS-IS doesn't always mean worthless, but rather a realistic fair market value.

Should I Work With an Estate Agent or a Cash Buyer?

Now that you have made a choice on whether to sell as is or not, the next question is whether to sell it directly to a cash buyer or put it up for sale.

Both options involve a risk and reward, and should be carefully considered before proceeding.

Listing my House on the Market

Listing your house with an estate agent can be a great way to earn a good offer. Once the home is put up for sale, agents will advertise the house, take photos, show the home to potential buyers and negotiate offers. If a house is desirable then there will be plenty of competition for the home. It does take time and effort to prepare houses for sale, especially if repairs are needed. Once an offer is accepted the process becomes a waiting game: the buyer's mortgage application has to be approved, and the house condition has to pass inspection.

Once everything has been approved it can still take months to finalize the sale. On top of that there are additional expenses associated with selling a house. You'll also have to pay any estate agents involved with the sale.

If the time and reward seem desirable then definitely consider this option.

Selling directly to a Cash Buyer

A cash buyer can speed up the selling process. Rather than advertising or showing the house, the only requirements are usually a phone call and possibly an inspection of some sort.

Depending on the arrangement, there may also be no repairs needed before the sale. It's a fast and easy way to finalize a potentially stressful process.

An example of a direct cash home buyer is Eagle Cash Buyers. Simply apply for their direct home buyer program and you can find out what your house is worth to them. You can submit your contact info and have a conversation about your expectations for the sale.

The biggest draw to this kind of sale is convenience. You won't have to prepare the house, and show it to numerous buyers throughout the process.

It is important to remember that a cash offer isn't always a good offer.

Some cash offers may require a lower price than traditional offers, some may hide terms inside the fine print. It pays to compare offers from each source.

What if an Offer is Made? How do I Know if it is a Good Offer?

If a choice between two offers is given, rather than accepting the cheapest offer and rejecting the highest, try comparing the offers. What does this mean exactly?

First, determine a fair market value for your home. A good starting point would be similar homes in your area and their sale prices. If you're unsure, a local estate agent can help. This value should reflect the general condition of the house as well as its location.

Next, the costs associated with each sale should be taken into consideration.

If the cash offer seems low be sure to take into account any expenses, repairs or commissions that come with a traditional home sale.

If the costs seem equal, then the offers can be compared based off sale price.

For instance, if your home's fair market value is $300k and after estimating the costs associated with a traditional estate sale, the total seems to nearly equal the cash offer, the difference between the two options might be the sale price.

Now consider how much each option will actually net you. The $300k traditional estate sale offer would result in roughly the same amount as a $290k cash offer, minus the cost of any repairs and expenses.

Always be aware of other conditions attached to any offers as well.

Can the sale price be negotiated or altered in any way? Can any expenses be waived? Which party pays for the closing costs?

If something doesn't make sense it's always best to ask for clarification.

The Process After Accepting an Offer Seems Simple Enough

When an offer is accepted the next step is to discuss the closing and necessary paperwork. After a buyer has gone through your information they may also conduct an inspection of their own. If the offer is made and the counter offer accepted, both parties will need to set a sale agreement on a specific sale date.

In most cases a closing attorney, title insurance company or escrow company handles the process. This is also when any problems with the sale would surface: undisclosed mortgages, liens against the property and even disputes of ownership can appear here. Estate properties may require additional paperwork as well.

After necessary documents are finalized in either case, the property is officially sold and the seller receives the necessary settlement proceeds. Even if an accelerated procedure is made sure not to finalize any big plans until the procedure is guaranteed to go smoothly.

Considerations Before Signing any Papers

Selling a house AS-IS is a big step, financially and personally. Although there are plenty of benefits, it is important not to rush into a decision.

Be sure to know whom you are working with, and if anyone will be purchasing the home directly. If a contract states that the offer can be assigned to another buyer, be wary.

Always read and understand the contract or agreement made. It is best to stay away from anyone who is pressuring you into making a decision and cannot provide the proper contract or agreement.

Make sure to always read the fine print, especially in regards to sale price. If there are any conditions that must be met before closing or payment is made, always make sure they are clear. A verbal contract or agreement means nothing in a legal sense.

When possible, consider your options and evaluate all offers. If necessary, an attorney or estate agent can be hired to look over the agreement, especially in regards to inheritance.

Taking time reviewing the terms and conditions of a sale agreement can always save you from future trouble.

Final Thoughts

Selling a house AS-IS comes with its own pros and cons that should be taken into consideration. While convenience and speed can be very attractive there are some sacrifices that must be made. A lower sale price, less desirable terms, or even additional paperwork and expenses should be considered when comparing selling methods.

The decision to make repairs or sell AS-IS should depend on individual circumstances. Either option should be thoroughly considered, along with the time and expenses needed for each. Always remember to compare offers, and ask as many questions as you need to before signing any papers.

Don't forget that you don't have to renovate or accept the first offer given.