To many homeowners selling property in “as is” condition sounds very attractive, but what does an "as-is" sale actually look like?
An “as is” sale means the house is put on the market in its current condition with no repairs or improvements being made. It is assumed that the sellers will not agree to make any buyer requested repairs. There are advantages to selling a home in “as is” condition.
A number of sellers update bathrooms and kitchens before putting their homes on the market. Selling in “as is” condition avoids this upfront expense. In addition to the cost of improvements, sellers don’t have the inconvenience of time and effort involved in upgrading their homes.
If family members are selling deceased parents’ homes to settle the parents’ estates, selling the property in its current condition is often the best course of action. There is no upfront cost and the sale, and therefore the estate, can be settled quickly.
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Sometimes the land on which a house sits is more valuable than the house itself. Builders as well as buyers who want to personalize their own homes aren’t looking for improved houses. They would prefer to pay less for an “as is” property – and will often tell sellers they can leave anything they want in the house since it may be torn down anyway.
If a house hasn’t been improved a seller needs to be realistic about the asking price. An unimproved property will realize less than a home that has been upgraded with new floors, a replaced roof, modernized kitchen and baths. The prospect of no upfront expense or inconvenience often outweighs the lower sales price.
Buyers can be wary of “as is” properties and may have a number of questions. Buyers may assume that there are significant and costly deficiencies in the home versus just cosmetic updates.
The seller of an “as is” property does have obligations.
Sellers must disclose any known “material” defects and answer to the best of their knowledge information about damage that has occurred. This includes, but isn’t limited to pest infestation, water penetration, and plumbing issues. Sellers are not required to disclose non-material defects. For instance, in most states sellers do not need to disclose if there was a death on the property. Rules for disclosing non material defects vary, so if there is a question, you or your Realtor may need to check.
As with the sale of all properties, a qualified Realtor can guide you through the advantages and disadvantages of selling your home in “as is” condition, allowing you to make the best decision for your situation.
