When selling a house with issues, selling it “as is” may be the most straightforward option. Most homeowners believe that selling an as-is home means they will not have to make any repairs to the property and that selling as-is will be the most practical and involve the least amount of stress. The notion of selling the house with the thought of repairs might hold water but thinking that the process will be easy may be far from true.
Before you decide to sell your home “as-is,” you should understand. Selling as-is has several significant drawbacks.
When you know your options, you may decide that there are better ways to sell your home that will result in results you will be happy with.
Also read: First Time Home Buyer? 5 Things to Know
What Does Selling As-Is Entails?
To sell an as-is house means to sell the property in its current condition, understanding that no repairs will be made and that the home will come with all of its present flaws and issues. The phrase “as is” has a legal definition, and the home buyer will almost certainly be required to sign paperwork indicating that they understand the exact terms of the transaction.
When you purchase a home “as is,” it’s usually stated in the purchase and sale agreement. Keep in mind that all houses are technically sold “as-is.” A seller is not required by law to repair or modify their property for a buyer. You cannot compel a seller to change its current state.
What Homeowners Overlook?
Unfortunately, many homeowners believe that selling their home as-is relieves them of all general obligations associated with selling a home. They think they can unload the property for whatever price they can get while avoiding the need to discuss or disclose any issues with the house. Selling as is does not relieve you of your legal obligation to answer questions honestly about the existing problems with the home by your state’s rules.
Sellers are not required to disclose defects, but they must honestly answer questions about the home’s condition. In the real estate industry, nondisclosure is referred to as “Caveat Emptor” or “let the buyer beware.” A seller’s knowledge of the presence of lead paint is the only real estate disclosure required.
Home sellers are also prohibited from concealing defects on purpose. Even if you’re selling as-is, you must follow these guidelines. Sellers must avoid misrepresenting facts or failing to respond truthfully to a specific question from a buyer.
On the other hand, home sellers should be aware that real estate agents are held to a higher standard when it comes to disclosing a home’s flaws. The Consumer Protection Act, also known as Chapter 93A, has Realtors to higher standards.
Therefore, realtors must disclose any information that might persuade a buyer not to enter into a real estate transaction.
Other issues that a real estate agent must disclose to prospective buyers include:
- Evidence of a structural flaw, such as a large crack in the foundation.
- The presence of mold in the home, either past or present.
- Termite infestation.
- The roof has leaked, or an ice dam has caused damage.
- The radon levels in the house exceed the acceptable EPA limit.
- Significant plumbing or electrical issues.
- A crucial external issue such as loud noise levels.
The Issues With Selling a House “As-Is”
You might be wondering what the problem is from a buyer’s perspective when purchasing a home as-is. Unfortunately, buying a house as-is has a negative connotation. These are the risks of selling a house as-is. Before selling a house as-is, many disadvantages should be considered.
Also read: 3 Tips on Selling An Inherited Property
1. You’ll have to put in more effort to show why your house is worth the asking price
It will be difficult for you or your Realtor to convince potential buyers that your home is worth a reasonable price. Because home buyers will be bringing so much negative baggage into the real estate transaction, it will be challenging to break through the assumptions and demonstrate numerous reasons why your home is desirable. Remember that the buyer may have a trust issue because you are selling your house “as is.” Buyers may assume you’re attempting to conceal something.
2. Buyers Will Underbid You
Assuming your home has significant flaws, the home buyer will bargain with you as if you are desperate. Expect offers that are less than what you want or the value of your home. With houses sold as-is, lowball offers are far more common.
3. Buyers will have a negative perception of your home
Most of the time, perception becomes a reality. If you sell your home as-is, you can bet that most buyers will see it negatively. They may still try to buy it, but as soon as they see the as-is condition, they will assume something seriously wrong with the property – something so bad that you can’t afford to fix it or that it is unfixable.