Selling a house ‘as is’ has become popular across the real estate industry for various reasons. The new normal refers to selling a house in its current condition without undertaking any repairs or adjustments, which are, in turn, left for the buyer to settle. That means that the seller will disclose every defect connected to their property, including leaking roofs, to the buyer, who then decides if they will still purchase the property.
When you sell house as-is for cash, you face various advantages. However, there are also some challenges that you must navigate. Here are the advantages and disadvantages of selling a house as is to keep buyers and sellers on the safe lane.
Advantages of selling house as-is
Selling a house as is has been termed beneficial by various buyers and sellers in different ways, including:
1. Quicker sale of the house
The property will likely sell faster when no repairs or renovations are required. Therefore, if you’re in a hurry to sell your property for different reasons, such as a sudden need to relocate or for financial backup, selling it as is would be the best decision.
However, selling a house as is doesn’t guarantee a quicker sale if you don’t consider other factors, such as engaging a qualified real estate agent. Even when you choose to sell your property as is, take other considerations with you for a quicker and more effective sale.
2. Your participation in the sale isn’t fully required
When selling a house as is, the seller can engage in other activities as their participation in the selling process isn’t mandatory. If you choose the right realtor for the property, you can move on with other matters since no repairs and improvements will be required.
Unfortunately, the seller’s participation remains undebatable with the other method (selling a house after repairs) as they must undertake all the repairs required, inspections, improvements, and other requirements. This mainly applies when the house under discussion is miles away from your current location.
3. It saves time and money
It’s without doubt that selling a house ‘as is’ saves sellers a significant amount of money and time that would be otherwise used in undertaking repairs, décor, and renovations. For instance, repairing a standard-size house for selling purposes can take roughly four to eight months, accompanied by anything ranging from $ 15,000 to $35,000, depending on its value.
If you choose to sell the house as is, you’ll be saved from the above upfront costs and the time required to undertake the repairs. Although, it would help if you deducted the costs from the estimated selling price.
4. High potential of receiving all cash at once
Another significant pro of selling a house ‘as is’ is that sellers have a high potential of receiving all the cash at once because this method usually closes faster than the traditional one. Property owners who sell their house ‘as is’ usually have specific and significant reasons, such as an immediate need to relocate or a financial boost.
Therefore, if the buyer offers the payment in installments, it may not be so effective for the buyer sometimes. As is, house sellers must freely expose all the underlying issues with the property to potential buyers.
Disadvantages of selling house as-is for cash
Selling a house as is comes with a few drawbacks, which the seller and buyer must acknowledge, including:
1. Low buyer turnout
Many buyers are barely attracted to purchasing a house as is, believing that such properties come with significant and costly repairs. Additionally, nearly every buyer wants to purchase a fully furnished house free from defects that would force them to incur more on the repairs. While selling a house ‘as is’ attracts quicker sales, the number of buyers might be low and with poor offers.
2. Seller may suffer losses
Often, houses sold ‘as they are’ go for significantly lower prices than their original value, which is a loss to the seller. This is because the buyer doesn’t undertake any repairs by themselves but deducts the estimated cost of the repairs hence a lower selling price.
On the other side, buyers may take advantage of the fact that all the repairs have been left on their plate, asking for a deduction in the selling price which is more humiliating to the seller.
3. Limited financing options
People willing to buy houses as they are may be limited to financial options from banks and other financial institutions. This is because many financiers, especially banks, usually set minimum standards that properties must meet to acquire financial assistance.
If the bank orders an inspection of the property and it fails to meet the requirements, the buyer might lose their chance to acquire a loan. It may also be challenging to acquire financing from angel investors, family, friends, or other sources of finance when acquiring a house as is.
Now that you’ve understood the benefits and drawbacks of selling a house as is, you can make a more informed decision about where to still proceed with the move. However, you can overcome the challenges by using house-selling websites to increase buyer turnout or hiring a real estate agent. Selling a house ‘as is’ isn’t complicated when you have the right information.