The Pros and Cons of Selling a House “As-Is”
One of the biggest possible challenges for a homeowner can be selling a house. Especially if it is a question of repairs versus improvements. There are multiple factors that can influence how quickly a house sells and for how much. These factors include timing the market; marketing strategy; staging or not staging; pricing too high or too low, and of course – making repairs or improvements. All of these, and many more, will affect the sale of the home. But what if your house needs work? If you choose not to do the work, this is commonly known as selling the house ‘as-is’.
Repairs versus Improvements
First, let’s clarify the difference between a repair versus an improvement. Repairs would account for non-functional things or anything that creates a health or safety hazard to the home. Improvements will include anything done to make the house more presentable or appealing to buyers. So, a common example of a repair would be broken steps. Whereas a common example of an improvement would be painting a room. If you are going to take on the repairs and/or improvements, here’s a simple guide to plan the renovation.
Selling Your House ‘As-Is’
As you look around your house you may come to realize there are more ‘repairs’ needed than ‘improvements’. As a result, of this walkthrough, you should consider putting the house on the market as an ‘As-Is’ sale versus spending the money on the repairs. A dollar in does not mean you will get a dollar (or more) out. Not all repairs will increase the market value. Rather than spend that money, you are more likely to succeed by “selling the home as-is”.
Here are the three main steps to sell your house as-is on the MLS (and not as a For Sale by Owner):
- Get the paperwork done: work with a local realtor to draft the proper contracts, selling agreements and review required disclosures
- Be upfront: identify the items that need repair so that these are accounted for in the listing description and/or agent remarks to avoid buyer confusion about what does or does not need to be done
- Understand market pricing: Working with your realtor, get an understanding of how comparable homes have sold. Remember, you’re looking for homes in similar condition. Not fixed up or move-in ready homes. It is important to know that most comparable homes, for an as-is sale, were likely foreclosures. Foreclosed homes are always priced well below market value.
What Do I put on the MLS?
This is a common question. And it usually is accompanied by questions such as; Do I show photos? Do I put all the details into the listing description? What if I don’t want to do disclosures? How do I handle disclosures on an inherited house?
For starters, yes. Put up photos. There is an old belief that if a buyer can’t see the house in photos, they assume it is far worse. And, they may simply “swipe on by”. Next, your realtor should have some degree of the scope of repairs in the description. At least in the agent only remarks. Because the house is on the MLS, a buyer will need a realtor to help them access and put in an offer. Their realtor will review the description and advise the buyer of anything particular in the remarks.
Technically, a property disclosure is not required (check with your local state realtor board) in Connecticut. When sellers do not provide the property condition disclosures, there is a $500 fee assessed at Closing as a credit to the buyer. If the house was built before 1978, it will require a Lead-Based Paint disclosure. If it was inherited, and you should confirm this with your local board, a property condition report is not required.
Put the listing on the MLS
That’s it. Selling your house as-is (on the MLS) can be a very simple and straightforward process. Even though you are selling it ‘as-is’ you should still consider cleaning out the house. Assuming you moved out (or it was inherited), the house is best shown vacant and empty of personal items. Doing so makes it easier for buyers to assess the condition and determine their offer price. Cluttered houses are difficult to show. Cleaning out the house gives the buyer a better understanding of the condition and will make it easier to determine an offer.
Questions? Drop me a note. Happy to help. Want to sell your home without the hassle?