We can think of several reasons why a homeowner would consider selling a home with problems, marketed in “as-is” condition. The most obvious, of course, is that there’s no money to perform the required work. This frequently happens in probate sales where an inherited home is in need of work but they lack the funds to put the home in market condition. As well, those who need to relocate quickly for a job often just want the house off their hands so they can move on with their lives.
Although we understand why someone may need to sell a home as-is, we believe our clients need to know the possible ramifications of doing so. Let’s take a look at two reasons you might want to reconsider your decision to sell your home “as-is,” and what to do if you absolutely must.
1.You’ll have fewer qualified buyers if you sell as-is
When your home is advertised as a doer-upper, which is what most as-is listings are, you’ll partially drain the pool of buyers who can buy your home. For instance, some lenders baulk at lending money for a home that needs significant work. They may insist that certain items, such as a roof in need of replacement, be taken care of before they’ll approve a loan, therefore, your buyer pool won’t contain many first-time buyers.
Then, there’s the fact that most buyers just don’t have the money to repair a home after moving in. Although your low price will attract the tight-budget buyer, the reality of the financial outlays after closing may prevent them from proceeding with a purchase.
Your buyer pool now contains mainly cash buyers and most cash buyers are investors – the most real estate savvy homebuyers. They’re out for a bargain and if you hope to sell your home at all, you may end up taking an offer for far less money than you’d imagined.
2.You won’t make as much as you hope
Today’s homebuyers say they want a home that they can move right into, stick their toothbrush in the holder in the bathroom and enjoy their new digs. So, why would a buyer want your home? When you consider this question, there can be only one answer: A buyer would want your as-is home because it’s cheap.
Depending on the extent of needed repairs, you will have to list your home for less than nearby homes that are in better condition. As mentioned earlier, a low listing price will bring out investors and everyone else looking for a bargain. Be prepared to get beat up over your price, regardless of how low it is, and to sell it for less than you’d hoped.
It’s quite possible that it may be more cost-effective in the long run to make the necessary repairs so that you can list at a higher price. This is something you should speak with your accountant about.
If you must sell as-is
We understand that certain home repairs may be financially out of the question for some sellers and they simply must sell the home in its current condition. Here are 3 tips to help:
Appearance matters more in real estate than most other industries. With attention to increasing the home’s curb appeal and some fresh paint and a good scrubbing inside, even the worst home will look better.
Most buyers will decide whether or not to view your home while shopping online, so paying attention to cosmetics makes for compelling listing photos. Sure, they’ll know that there is something wrong with the home (“as-is” advertises that), but if it looks ok, the perception will be that whatever is wrong with it can’t be that bad. Getting more people to view the home in person is the name of the game when it comes to selling quickly and for more money.
Consider a pre-sale home inspection
Sure, you have a good idea of what’s wrong with the home, but there may be more, or less than you imagine. A pre-sale home inspection will give you the definitive answers you need and will go a long way in showing potential buyers that you’re earnest in your desire to be completely honest about the home’s condition.
Plus, if you supply the buyer with the inspection results before accepting the offer, you’ll be able to weed out those that will eventually back out after undertaking their own home inspection.
Protect yourself by disclosing all known issues concerning the home and the neighborhood. Yes, it feels as if you’re betraying yourself, but disclosure is important if you want to avoid running afoul of the law and winding up in court. Disclose. Every. Last. Thing.
About the Author: The above article on reasons not to sell your home as is was written and provided by Brent Palmer, a local leader in the field of Richmond and Nelson Real Estate sales, marketing, advanced technology for home selling, and social media. You can contact Brent Palmer here, or at 027 544 9921.
He has helped many people buy and sell homes in the Nelson, Stoke and Richmond areas for years, and would love the opportunity to help you as well.
Thinking of selling your home? I have a real passion for helping people sell their homes in our Nelson and Tasman Region, as well as the marketing, social media & advanced technology for home selling that goes along with it. I’d love to have the opportunity to sit down with you discuss how we can work together to get you the best price.
I help people buy and sell real estate in the following Nelson and Tasman towns & neighbourhoods: Wakefield, Brightwater, Hope, Appleby, Redwood Valley, Mapua, Stoke, Tahunanui, Atawhai and of course, Richmond and Nelson City. Connect with Brent on Facebook and pretty much everywhere else.
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