For starters, what exactly is “as is home”?
Selling a home “as is” means sellers put up their homes on the market without doing any repairs to improve its current condition. Rather than putting tons of money, time, and effort to fix the issues in their home, they put it up for listing as is, often for a lower asking price to attract multiple offers.
Maybe you're thinking, “Why would anyone sell their home as is?” After all, there’s no better way to increase a home’s value and sell for top dollars than making repairs and staging your home nicely.
Here we explain some of the most common reasons why sellers might have to do it:
Sometimes homeowners would like to sell, but they don’t have the funds to make any repairs or tackle home improvement projects to increase their home’s value. In this situation, they may have no other choice but to sell as-is. There are also instances where a homeowner might have finished doing maintenance work on the home’s exterior but have no money left to spend on interior improvements. There are also those who, well, just want to save tons of money on repairs.
Since making repairs and staging are just some costs associated with putting a home for sale, it’s easier to sell as is for those who are in a tough financial situation because they can skip those processes.
Many people sell their houses as is because they want to attract cash buyers. Many of these buyers are local investors and flipping companies who purchase fixer-uppers or ugly homes and renovate them. Likewise, sellers generally love a cash offer because it helps expedite the home sale process. They get paid faster and use the quick cash to settle debts or spend it on other expenses.
Investment companies help distressed owners sell as is by purchasing with cash. The only downside is that you cannot expect them to pay anywhere close to a home's market value.
One option for people to offload a house they've inherited after a parent or loved one passed away is to sell it as is. It might make sense if you need to sell with your siblings and all of you live far away to oversee any home improvements before putting it on the market. It can also help prevent a major headache since they only have to split the profits from the home sale, avoiding a family feud.
Another common scenario is if someone had just “won” a house after a painful divorce but found out they couldn’t afford to pay for taxes, utilities, and upkeep costs anymore and would rather spend the money somewhere else. In this situation, it’s better to sell the property in its current condition, especially if it can help with moving on into a new life.
Making repairs and doing home improvements may sound great, but the truth is they are also too time-consuming to deal with. It takes time to fix every minor issue, make some updates, and even to stage your home. They can prolong the time you have to wait before you can put your house up for sale. Homeowners who want to sell their homes quickly put it up on the market as is. It also helps speed up the transaction if they get a cash buyer or work with a reputable investment company.
You still need to disclose known issues and defects. Selling a property as is does not exclude you from disclosing known defects and issues. It remains your legal obligation to talk about the home's existing problems and truthfully answer any question from a buyer. The only exception is if you’ve inherited the property and you aren’t aware of its general condition.
It doesn't mean that the buyer will skip the home inspection. Although you clearly stated your intentions when selling the home, it doesn’t mean that a typical buyer won’t request a home inspection that will uncover any issues. Regardless, most mortgage lenders will require a home to be free from any health or safety issues before they can lend money to it.
Make sure you've explored all other options before coming up with this decision. Putting your home up for sale can put a lot of stress and pressure on any homeowner. If you are considering selling as is, you may want to get help from a realtor who has experience in this kind of transaction before making a final decision. Maybe you can still come up with other ways to continue with the home sale without selling as is or adopt a creative sales plan that will suit your situation.
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