Should you sell your home as-is?
Tuesday Apr 23rd, 2019
If you’re thinking about listing your home, but your home requires an extensive amount of repairs, you may have sighed at the idea of spending tens of thousands of dollars just to get it ready for listing. Wouldn’t it be great to simply sell your home in its current condition and let the buyer deal with it? Is it possible to sell your home as is, and simply discount those expenses from the listing price? And if so, is it a good idea?
Can you sell a home “as-is”?
Selling your home as-is is quite legal, and not exactly an unheard of occurrence. In fact, under some circumstances, selling a home as-is can be the right move for its sellers. But as you may imagine, there’s a reason why this isn’t the norm, but rather the exception. Selling your home as-is successfully can be challenging, and the entire process is basically an uphill battle from day one.
Under normal circumstances, home sellers want to sell their homes for as much money as possible. An essential part of achieving that goal involves fixing up the property, and staging it to sell. But there are times in which the home owner isn’t able nor willing to do so. Perhaps the homeowners are going through divorce, or they came to own the home through inheritance and have no way of maintaining the property. And in some cases the owners simply don’t have enough money to make the repairs, and don’t want to entertain new debt to do so.
But regardless of the reason, if a seller decides to sell the home as is, he/she can’t simply indicate in a listing that the home is sold as-is and let the buyer worry about it. By law, the seller is required to disclose any issues that the home may have to a potential buyer, and answer any question by the buyer truthfully and honestly.
Because of the illegality of intentionally (or unintentionally) hiding major defects, or downplaying major issues with the property, it would be a good idea for a seller to get a home inspection before listing a property for sale as-is. This inspection would not only reveal problems such as cracks on the foundation, mould, leaks, plumbing issues, etc, which the seller may not even be aware of, but it can also protect the seller once negotiations with sellers begin.
While it may be tempting to downplay issues with the structure in order to get the highest selling price possible, such unethical practices usually backfires, and could lead to far more expensive legal issues. It would simply cause more harm than good.
Why sell your house as-is
The main benefit of selling a house “as is” is saving in money and time. Home repairs and renovations can get quite expensive, sometimes costing tens of thousands of dollars of more. And besides being expensive, home repairs are also time consuming.
The longer and more complex the repairs are, the longer it would take to list and sell the home. And even if the seller is capable of doing those repairs personally, as long as the home remains unsold, the more monthly mortgage payments, property taxes, and utility bills will accumulate.
Cons of selling a house “as is”
If you sell your home “as is”, you’re basically guaranteeing that the majority of home buyers will have a negative opinion of your property. Even if there isn’t anything wrong with the property, and you have a home inspection report to prove it, just by seeing the home listed as-is, buyers will assume that there’s something wrong with it. As a result, an as-is home has a reduced pool of interested buyers right out of the gate.
And under the assumption that the home has some major problems, bargain hunters will immediately target your property, and send you nothing but low-ball offers. You and your real estate agent will have an uphill battle from day one to demonstrate to potential buyers that your home is worth a fair price. That’s easier said than done, since even in the best of circumstances where the home has been recently renovated, buyers will still look for excuses to make lower offers.
Selling a home as-is is not a decision to be taken lightly. There are many potential pitfalls in the process, and the legal aspects can vary significantly from province to province. If you’re seriously considering this option, it would be a good idea to consult a trusted real estate agent to help you do you due diligence, and calculate all the pros and cons of doing so.
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