Thinking of Selling Your Home “AS-IS?” Think Twice.

bobdavenport Real Estate 1 Comment

Selling a fixer-upper home as it — promising to make no repairs or credit the buyer any money to have repairs performed–is the logical course of action for cash strapped homeowners.

But, you may want to think twice about it. In fact, consider the following aspects of selling a house as-is condition.

LESS MONEY FOR YOU
Have you ever sold your car or turned it in for a newer model? Did you wash it and clean the interior before putting it up for sale?

Sure, you did — you knew that to get the most money possible the car had to at least look good. Why would you treat the sale of your home any differently?

Home shoppers today are looking for move-in ready properties and the more that they find wrong with yours, the less money they are likely to part with. That is, if they even bother to place an offer on the home.

There is a very real possibility that it will be most cost-effective to make the repairs that will bring in a higher price. Otherwise, be prepared for rock-bottom offers from buyers.

LENDERS AND INSURERS
Many conventional lenders hesitate loaning money on a home that needs substantial work. You may run into a buyer whose insurer won’t write a policy for a home in need of substantial repairs. For instance, a roof at the end of its life is a red flag for the insurance company.

FHA-backed loans, a primary source of loans for first-time homebuyers, require certain repairs be made prior to closing. If you insist on selling the home as-is, FHA loan recipients won’t be among your potential buyers.

BUYERS MAY NOT HAVE THE MONEY
If a buyer has the money to pay for repairs, why wouldn’t he or she use that money to buy a home that’s in move-in condition?

The fact is, the buyers that will be interested in your home, because it’s priced so low, will be those on tight budgets. This means that they won’t have the disposable income after the purchase to replace your ratty carpet or make needed repairs.

Again, you’ve narrowed your buyer pool and, at this point, your home may appeal only to investors. These are the savviest members of the home buying population and you’ll end up selling your home for far less than you imagined.

I understand that certain home repairs may be budget-busters for some homeowners and there is just no way of getting around selling the home “as-is”.

But for those homeowners who can afford even basic cosmetic repairs, I urge you to make them. It is money well-spent.

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bobdavenport