What is Selling a Home 'As-Is?'
Getting a home in its best shape and ready to sell can be time-consuming and as a result pretty stressful. Some homeowners choose to go ahead and list their home for sale as-is to help eliminate the burden of making sure their home is in prime condition before listing it.
What the Term “As-Is” Means in Real Estate
This term has taken on many different meanings over the years when it comes to selling a home. In simple terms, selling a home under an As-Is status communicates that the homeowner is aware there are some repairs that will need to be made to the home, but the seller will not be making these. The words As-Is are a way to communicate to potential buyers that the seller will not be making ANY repairs to the home.
What exactly the As-Is status of the home is will mean something different for every property. In some cases, it simply means the home is outdated and only needs some cosmetic updates. In others, it can be something quite substantial like the need to dig up a septic tank and completely replace it.
One thing to be aware of as a seller, is this often means the home will be listed below fair market value to make up for the lack of repairs being made by the seller
The Potential Downside of Selling a Home As-Is
Some buyers look at the As-Is listing as a red flag and a means to walk on by to the next home. Some buyers feel more comfortable paying full sticker price for a home that is move-in ready, with almost no work needing to be done to turn it into their dream dwelling.
Sometimes a home sold without repairs means that there are much lower offers on the table. Many times, offers are below the lower listing price of the home. Sellers could be leaving behind the chance for a higher potential profit on a home that is in great condition.
Some mortgage lenders may require that certain repairs be made before they will approve a loan. For example, a buyer uses an FHA loan to purchase a home. These loans have bank-required home conditions that need to be met for approval. If the bank deems the home in less than desirable condition this could put the home back on the market and may communicate to other potential buyers there is something seriously wrong with the home.
Selling an As-Is Property in 2022
One thing that homeowners do have on their side right now is the very low number of homes for sale right now. This still gives a seller a lot of leverage when selling, even if the home needs some work done.
There is a growing demand for homes and a continued low amount of them for sale right now. This coupled with the inflation of home prices has caused many potential buyers to seek out the possibility of purchasing a home As-Is without negotiating a low-ball offer or trying to haggle over the cost of needed work. This will be a different story when the market cools down and begins to balance out again.
For more information on purchasing a home in Columbus and surrounding areas, please contact us at any time.
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