Sellers list their homes for sale as-is when they don’t want to spend or have the financial resources to do repairs before closing. Unfortunately, that means there are no guarantees from the seller, besides minimum disclosure standards, stating that everything in the house is in working order.
To help you make a confident, informed decision whether to sell your house as-is, we composed this guide with several things you should keep in mind. We’ll discuss what as-is sales actually are, including the pros and cons, and what to expect from this type of home sale.
Inspecting Your House Before a Sale
There isn’t a rule or stipulation stating that you have to have your home inspected before selling it. However, getting a pre-sale home inspection isn’t a bad idea, especially if you’re looking to secure the best possible price for your real estate.
Regardless of how well homeowners are acquainted with their homes, there are often minor or perhaps undiscovered issues with their property that could be inadvertently passed on to a new buyer. That’s where home inspectors come in.
Home inspectors are trained professionals that can identify any existing and potential issues and point out any problems that could effectively disrupt your home sale or severely devalue your home.
Why Are Home Inspections Important?
Home inspections are important to both home sellers and potential buyers for several reasons. For example, if you’re looking to maximize your home’s value, a home inspector can point to any areas that would benefit from minor repairs, major repairs, and even overall renovations.
However, considering that you’re selling the house in its current condition, without considering home improvement projects and renovations, calling in a home inspector will let you know your home’s fair market value.
For prospective buyers, home inspections offer insight into just how much upgrade or necessary repairs their fixer-upper would need if they bought it. It’s worth noting that, in most cases, realtors will also include home inspection clauses in their contracts.
Is Selling a House As-Is Right for You?
As-is house sales are often used for homes in poor condition when homeowners don’t have the time, money, or resources to fix them up. This indicates to homebuyers that the property is sold in its current conditions, with an appropriate sale price.
After accounting for the costs of upgrades and repair costs, selling a house as-is isn’t a bad option. However, the potential buyers might not consider the property move-in ready, and won’t pay top dollar for your home. As a result, you might have to lower your asking price to collect the money and move on.
While selling as-is relieves you from making repairs and renovations, you still have to adhere to the state disclosure laws. This means that you’re legally obliged to disclose the following to the buyers:
- The presence of lead paint
- Structural problems
- Defects in the HVAC system, electrical installations, plumbing, or roof
- A history of flooding or pest infestation
Misrepresenting your home to the buyer could have severe consequences, including making you liable for recovery of damages based on fraud and deceit claims. As a result, having a written home inspector’s report is beneficial; if any issues arise, the home inspector will be liable for misrepresenting the property to the buyer.
In some states like California, you’re obligated by law to disclose prior inspection reports when selling a property. In Virginia, a home inspection report is one of the requirements for obtaining a home loan.
The Pros and Cons of Selling a House As-Is
Sometimes, selling a home as-is makes more sense than conducting home improvements to increase the house’s value. For example, if your home is estimated at $180,000, additional repairs, like updates to the roof and a new coat of paint, might boost its value to $200,000.
While a price difference of $20,000 seems beneficial, projects like those could cost up to $12,000, especially the new roof, which means that the home improvement project would only bring in approximately $8,000. This begs the question if the remaining amount is worth the hassle and time?
The good thing about selling a house as-is is that you won’t have to wait for repairs to be done before initiating your home-selling process. Selling your home for cash to a cash buyer is also a good way to avoid the mortgage approval process. In addition to saving you some time, selling a house as-is save the money you’d otherwise spend on costly repairs.
The bad thing about selling as-is often includes getting fewer cash offers. In addition, some lenders won’t approve loans to home buyers on account of increased risk, limiting your prospective buyers to house flippers and real estate investors.
Having fewer offers isn’t the only downside. Prospective buyers will try and lowball the price to make up for the repair costs. Sometimes these price cuts account for a 25% profit drop.
Tips for Selling a House As-Is in Virginia
Though it sounds as easy as listing your property on multiple listing services, selling a house as-is can oftentimes be more stressful than it appears. On top of having to disclose all of your home’s flaws, many other complications may arise. Here are some tips for selling a house as is in Virginia
Determine minor repairs
Minor repairs or upgrades on your home can do a lot to sway prospective buyers. The key is in the when and where to invest your money to get a higher price. In terms of areas of the home, consider your kitchen and bathroom.
Keep in mind that making minor or major repairs, or even a full-blown renovation, will definitely shave a few dollars off your budget. However, the return-on-investment will dramatically increase the fair price of your property on the local market.
Should You Make Major Home Repairs
Making any major structural repairs often don’t pay off, considering the exorbitant price tags associated with such repairs, paired with lengthy time frames necessary for each repair.
These repairs often include mold removal, plumbing work, and HVAC repair. However, those issues fade in comparison with foundation repairs, roof repairs, damage caused by water or floods, and termite damage.
Research the Virginia Real Estate Market
Ensure that you’re putting an adequate price tag on your as-is sale, and not a figure that’s too low or too high. A property that’s listed too high will take longer to sell, and you’ll probably have to cut the price eventually, just to grab the attention of prospective buyers. Pricing the property too low affects your overall profit margin.
The best possible approach is to look at comparable houses that have sold recently and price your property accordingly. Additionally, you can opt to sell your house for cash to Avante Home Buyers or other companies that buy houses Virginia residents are interested in selling fast. Often, the company will send its own inspector for appraisal of the property and make a cash offer as soon as in 24 hours.
Work Out Your Lowest Price
Price negotiations are quite common in as-is sales, with buyers trying to lowball the price on account of repairs. It’s up to you to negotiate the lowest price point, beyond which selling a house isn’t worth your effort.
However, there are other things you can offer to persistent buyers. For example, you can agree to pay full closing costs on your real estate transaction, increasing the final sales price of your property.
Sell the Property Yourself
The average agent’s commission rate in Virginia is anywhere between 3% and 6%, so if you’re selling your home for $180,000, the real estate agent in charge of the sale takes $5,400 as his commission cut. Instead, experienced home sellers opt for what is known as For Sale By Owner (FSBO).
However, selling a house by owner isn’t without risks, considering that FSBO sales often take longer to sell and are more likely to break the contract after accepting an offer.
Selling your house as-is is a beneficial option if you’re moving and looking to sell your home quickly, without investing work on repairs and minor home improvement projects. They’re also great if you happen to inherit a home that’s not in its finest condition and you’re looking to sell it as a fixer-upper.
Avante Home Buyers are local cash home buyers in Virginia Beach that you can rely upon to sell their home quickly and reliably, at a reasonable price. Besides Virginia Beach, we buy houses Norfolk townspeople are looking to sell as-is without making repairs, hiring inspectors and real estate agents, or paying commissions or fees.