This week, I thought I would take on one of the most misunderstood concepts in real estate.
When should you list a house “AS IS” and what are the perceptions, implications, and possible results?
Let’s be honest, listing a home for sale “as-is” is never a great selling point, except to investors looking for a distressed property to flip. Think some of those HGTV shows for example.
Fallacy correction - just because a house is listed “as is”, the buyer is always entitled to have the house inspected, and then decide whether to move forward. “As-is” simply means that the seller will not fix, or compensate the buyer, for anything the inspection turns up. Except for savvy investors, I would always advise a buyer to have a home inspected, even though it’s listed “as-is”.
Perceptions:
There’s no way around this, but when we see “as is” in the property description, we imagine the worst. The human imagination knows no bounds and I bet you’re already imagining a horror show of a house right now, aren’t you? Well, sometimes there really are monsters under the bed, but in many cases, the home has just aged badly and/or been the victim of poor (or no) maintenance. In other words, the “bones” are good.
Implications:
A skilled Realtor, when listing a property, must decide if listing a home “as-is” would actually be a net benefit to the seller, AND the buyer!
How can this ever be a benefit to the seller, you ask? Easy, by managing expectations.
Many deals fall apart in the inspection phase, when buyers are presented with many pages of issues that need fixing. It can be a shock, and it can also be an end to an otherwise good result for all parties. When buyer’s see the home is listed “as is”, they understand that the inspection report might be longer than War and Peace, and they then tend to focus primarily on the “major” issues.
One of the biggest challenges realtors face is a homeowner with a dated, poorly maintained home, wanting to sell their home for what John and Suzie across the street got last month. This is a hard discussion, and weak agents sometimes shrink from it.
Here’s the reality. “As is” can actually be an advantage, if the homeowner and Realtor can find, and agree on, the sweet spot price where everybody loses.
Yes, I said everybody loses.
That win-win BS is just that. There is no such thing as win-win in any business deal, including real estate. In the case of real estate, the seller loses because he sells at a materially lower price. The buyer loses because he will have to tackle those repairs and maintenance requirements which are NOT going away! The price has to be the perfect balanced amount of LOSE-LOSE, tailored to each particular situation.
Results:
Maybe a first time buyer, gets an opportunity to own their first home in a neighborhood they otherwise could never afford.
Maybe Grandma, who now needs assisted living, can cover those costs by selling that loved, but neglected property.
Maybe, the whole neighborhood benefits from the property’s new owners fixing up and improving the curb appeal of the previous “eyesore”.
You get the idea.
If someone you know might benefit from the “as-is” strategy, please go ahead and share this with them.
Have a great weekend everyone and a great week ahead.
Sal Busacca, Realtor
864 952-7251
