We all know (or can easily figure out) the concept of buying or something “as-is.” I’m about to try selling my bike as-is for $25 — it works well, but needs some tuning up, the tires are flat and I don’t have a bike pump.
Maybe you’ve seen someone with a “For Sale” sign in the front windshield of their car, parked on the side of the road. There very well might be nothing wrong with it, but the seller thinks they can get a better deal than taking it to a used car dealership by taking matters into their own hands.
When we buy or sell something as-is, that “something” is to be sold and purchased in the state that it’s currently in. But for a massive investment and asset like a house, how does this process work?
Selling a House As-Is
The process of selling as-is is pretty simple. The only real differences from selling the traditional route are:
- Your listing includes “as-is”
- If you lived at this house, you have to disclose any/all known issues
- If you inherited the house, it was a rental you hadn’t lived in, or if it was a bank-owned property, your disclosure requirements are waived.
- The house doesn’t have to be empty when you move out
With all that in mind, here are some pros and cons to selling as-is:
You don’t have to clean your house. This is perhaps the biggest benefit to selling as-is. Homeowners with tons of stuff don’t have to clean through and sort everything — they can literally leave their house and its belongings for the next person. This is also beneficial for homeowners who are grieving the loss of a loved one — going through everything can be extremely painful.
You don’t have to fix things up. If that roof has needed replacing for several years but you’ve just never had the time or funds to do so, you don’t have to. Even minor cosmetic issues don’t have to be spruced up.
You might sell faster. Those who invest in real estate are often looking for motivated sellers. There’s a good chance you can get connected with a buyer who’s ready to close in 30 days, with no inspection necessary (this is especially true if you sell with RealtyHive!).
Your house is almost certainly going to sell for less. All the as-is benefits come with a price. When passing the torch of a rundown house to the next buyer, they won’t go for the property if they can’t afford both the house and the necessary renovations.
Buying a House As-Is
The most important thing to note with buying a house as-is involves inspections and offers. You can still put a home inspection contingency in your offer, but know that the sellers are not obligated to fix anything. This contingency solely protects you from having to purchase the house if, after the inspection, you change your mind about buying.
For example, you might find out in a house you’re interested in that there’s major foundational damage and termites. You realize the costs are way too high and fixing things would take longer than you’d like. You’ll lose a few hundred bucks on the house inspection, but it’s better than being locked into a home purchase that you later regret.
You can get a massive deal. Undoubtedly, this is why people buy homes as-is. You could save tens of thousands (and then some) by going this route.
You might love the appeal of a fixer upper. Looking for a major project or love the idea of a house with potential? Buying a house as-is provides that exact opportunity.
You could close faster. With traditional home sales, you might submit one of 20 offers. It could be a few months at least, between submitting an offer and the closing date. Buying as-is can drastically speed up the process.
You will almost certainly have to deal with lots of issues. Hoarding houses, structural damage — the gamut of home issues runs from moderate to nightmarish when buying as-is. While you could stumble upon an incredible deal with very little to fix, the chances are slim.
For this reason, including home inspections in an offer letter is necessary, unless you’re completely confident in taking on anything that comes your way. At the very least, consider taking a friend who’s got an eye for home improvement with you to walk by or through the property.
You might pay more than you bargain (or budget) for. A low price is rarely what you’ll end up paying to make a place liveable. Buying as-is might seem like a steal, but you definitely run the risk of unforeseen costs.
No matter if you’re looking to buy or sell as-is, RealtyHive is the place to go! We list properties from highly motivated sellers and connect them with highly interested buyers — think of us as an as-is online dating service. Fall in love with a new property or our selling process today.