Selling “As-Is” versus “Retail”
I talk about this a lot because at least once a week, someone asks me the difference. And sometimes, it is a Realtor. There is a general understanding that putting a house for sale “as-is” means there is no expected negotiation due to condition. Generally, that is true. What is misunderstood is the seller’s perspective of what warrants selling a house in an “as-is” condition. By default, if you need to sell a house and it has need for repairs or significant updates (not just getting rid of pink bathroom tile), an “as-is” sale is applicable.
Can I List an “As-Is” House on the MLS?
Absolutely. For most people, the idea of selling a house as-is means avoiding the time, effort and expense associated with making repairs or updates. This does not mean that they cannot put a house for sale on the MLS as a ‘Retail’ sale. But it does mean that buyers will come in with the expectation of a lower price. Realtors will (should) price the house accordingly to reflect the repairs and updates needed to avoid offer prices coming in too low. But, inherently, buyers want to pay even less for a house listed as an “as-is” sale on the MLS.
Key Differences between As-Is and Retail sales (on the MLS)
The basic difference between an As-Is sale and a Retail sale – at least the houses on the MLS – is the inspection. Assuming that buyers for either house are coming in with a loan, there is still an appraisal required. Or, if both buyers are coming in with a pure cash offer then there is zero contingency for inspection or appraisal. Cash deals are almost always faster and easier. But, with a cash buyer, still be prepared for negotiation after the contract is signed. The old mindset of “Cash is King” is something sellers need to keep in mind. Even with a cash buyer, there can be pre-Closing negotiation. Or, worse yet, the buyer gets cold feet when they start thinking about the expense for the work needed.
Here’s a quick graphic overview of the differences between As-Is and Retail (MLS) sales.
We strongly encourage that if you are considering selling your house on the MLS using the “As-Is” label, that you still pull together the property condition disclosures and inclusion/exclusion list. Was your house built before 1978? You are required, regardless of an as-is sale label, to provide a Lead Paint Disclosure addendum. If you’re unsure what to do, or what documents are needed, give us a shout (203-486-8868) or just talk to your Realtor.
What about not selling on the MLS?
With an off-market sale, meaning it was never listed on the MLS, there is greater chance of the house being sold without contingencies. But even with an off-market sale, a buyer may still be using a loan of some sort and this will require a lender appraisal review. With an off-market sale, be prepared for a lower price offer. Remember, when a house needs repairs or basic improvements it won’t appeal to the mainstream buyer. Selling it off-market removes the commissions paid to a Realtor but it also reduces the potential buyer pool since no Realtors (representing buyers) are aware of the house being available for purchase. (Considering a “For Sale by Owner”?)
How do I sell my house to an investor buyer?
Investor buyers are the easiest when it comes to negotiation and moving to Closing. Working with an investor, such as GLG Homes, you are going to get an offer (and maybe more than one option/offer) after a simple phone call, Zoom session or in-person walkthrough. As an investor buyer, we will present sellers with an offer the same or next day. In many cases, on the spot. Why? Well, investor buyers are constantly working on deals. An investor isn’t thinking about purchasing the house for themselves. It is a business purchase with the intent to make a profit on it in some form.
Whether by renovating it and reselling it later, or by making the repairs and then renting it. There is no emotional attachment. It is about providing a solution. For sellers considering an As-Is sale, working with an investor buyer (such as GLG Homes) can be the easiest, fastest and most economical way to sell the house.
Have questions? Let me know. Always happy to chat. Call or text 203-486-8868 and we’ll get your house sold.