Traditionally, when a homeowner puts their property on the market, one of the first things they do is to prepare their home for the sale. This means deep cleaning, staging, and doing minor repairs or major home improvements, all to make the property more attractive to potential buyers and get a higher price for it.
In a hot seller’s market like Williamsburg or New Kent County, VA, however, many homeowners sell their house as is and still receive premiums from eager buyers. With home inventory at an all-time low, buyers have limited choices in the market and are willing to take risks even in properties that need some work.
To sell a house as is may seem like a good option, but it also has its downsides. Take a closer look at this home selling strategy and see if it’s something that can work for you.
Table of Contents
- What it means to sell a house as is
- The pros and cons of selling a house as is
- How an experienced real estate agent can help when you sell your house as is
- Get professional guidance from a top Realtor in Williamsburg, VA
What it means to sell a house as is
When you sell your home as is, that means you’re selling it in the condition it’s currently in. The buyer should not expect you to make any repairs or improvements even if a home inspection reveals defects or damages.
Selling a home as is, however, does not exempt you from all obligations normally associated with the process. Legally, you are still required to do the following:
- Speak truthfully about the condition of the home. Compared to other states, Virginia does not require home sellers to disclose a long list of issues about their property. Homebuyers in the state are bound by the common-law concept of “Let the buyers beware,” which puts the burden on buyers to uncover any problems or defects with the property.
Home sellers must provide a Residential Property Disclosure Statement, which essentially gives them protection against buyers’ claims, except in certain cases.
However, sellers are legally required to truthfully answer buyer’s questions about the condition of the house and its components. They are also prohibited from deliberately covering up a problem to mislead buyers. If the buyer can prove that the seller lied during their conversations, they may successfully file for claims in a court of law.
- Advertise that you’re selling the home as is. You need to indicate on your listing that you’re selling a home as is. This serves as notice to the buyer that you’re not willing to do any repairs and improvements, and the home they’re getting is in exactly the same condition as what they see during viewings and inspections.
- Allow the buyer to conduct a home inspection. Buyers of homes being sold as is can still hire a professional to conduct a thorough inspection of the property. While it must be made clear to the buyer from the start that the seller is not expected to do any repairs, the buyer is free to negotiate the price if problems are found during the inspection.
The pros and cons of selling a house as is
Is selling your property as is the right option? Look into the advantages and disadvantages of this strategy and see if the risks outweigh the opportunities for you.
- You can save on repair and improvement costs. One way to raise your home’s value is to make sure it is up-to-date with current trends. If you need one or two major improvements to achieve this, such as a bathroom or kitchen makeover, you can spend anywhere from $3,970 to over $20,000. Minor repairs like changing a showerhead or caulking the door can cost you around $500.
In addition to improvement costs, you may also have to pay for home staging costs. Home staging can make your home more attractive to buyers by allowing them to see its full potential and highlighting its best features. It may involve renting furniture and decor, as well as a storage space where you can stash away your clutter. The cost of staging a home can be anywhere from $752 to $2,387, with a national average of $1,723, including a professional stager’s fee.
If you’re selling your house as is, you can potentially realize major cost savings by skipping the repair and staging processes entirely. This is especially beneficial if you’re experiencing budget constraints or financial difficulties, and can’t afford a home renovation or major repairs.
- You can sell your home faster. If you need to sell your home fast, skipping the home preparation process may save you plenty of time. You can go straight to listing your home and showing it to buyers.
You can also opt to sell the property to cash buyers and investors who are looking for fixer uppers or are interested only in the land where your house is built. While their offers are typically below market value, they can close the sale more quickly as they don’t need to wait for a lender to finalize the financing.
Cash investors’ offers also typically come with little to zero contingencies. Many buyers of this type waive home inspections, especially developers who plan to tear down the house and construct a new house or building in its place.
- You’re less stressed. Home renovation can be a stressful process, and to sell your house as is relieves you of this burden. Moreover, since you know that buyers expect less from the home, you don’t have to think about making a great first impression, particularly when buyers come to view the property.
Additionally, because the process is simplified, the waiting time until closing is considerably shortened. If you need to move out quickly, the sale of your home is one less thing to worry about. If you’re in financial distress, selling your house fast can give you relief.
- You will attract bargain hunters. Expect lowball offers. Selling a home as is can give buyers the impression that you need the money urgently and will be open to offers below market value or your list price. In addition, buyers may get the impression that your home is in a state of disrepair, and will factor in the cost of renovation and repairs in determining their offer price.
First time homebuyers are a good market for houses listed as is, but many in this group look for bargains as they are not financially ready to buy a more expensive home.
- Your home can stay on the market longer. Unless you sell the property at a lower price to cash investors, there’s a chance you will attract fewer buyers, which can cause your property to languish on the market.
There are several reasons behind this:
- Most homebuyers want a home that’s move-in ready and will not require major renovations and repairs.
- Buyers might think that since you’re willing to sell the house at a discount, the cost of fixing it up is too expensive.
- Buyers may have a difficult time finding financing as some banks will not approve mortgages for a fixer upper or a house in poor condition.
- You can lose on the opportunity to increase your profit. Certain home improvements have been proven to increase the value of a home. By foregoing renovations and repairs, you can also lose out on the opportunity to make a good return on your investment. You can ask your Realtor about which improvements can help improve your property’s profitability.
- The market can change to favor buyers. Selling a house as is works best in a seller’s market where the low supply and high demand are motivating buyers to accept even unfavorable sellers’ terms and conditions. But while the Williamsburg area has historically been one of the most sought after real estate markets in the country, new developments may soon turn the tables in favor of buyers.
With the rise in interest rates from historic lows to pre-pandemic levels, the market is seen to head to a slowdown. Nationwide, the number of homes sold has been trending down since February, 2022, and price reductions have been on the rise.
In the Hampton Roads region, there was a slight decrease of almost 1% in the median sales price for June, 2022 compared to the previous month. Sales in June this year are about 14% lower than the previous year. Inventory has also been increasing, although it remains nowhere near pre-pandemic levels.
If the market turns in favor of buyers, the demand for updated, move-in ready homes will likely increase, putting as-is sellers at a disadvantage. Studies have shown that in a balanced market, or one where the supply is more or less equal to the demand, homes that are in need of repairs can sell for around 15% to 20% below their market values.
How an experienced real estate agent can help when you sell your house as is
If you’re selling your house as is, the idea of doing it on your own can be tempting. After all, you can save another 3% to 6% in commission fees.
However, given the disadvantages of selling a house that needs work, you stand to maximize your profit by hiring a professional who can guide you through the process.
Here are some ways an experienced real estate agent can give you a better outcome:
- They know if the market favors sellers. A Realtor makes it a point to be familiar with the latest developments in the market so they can provide data driven guidance to their clients. Using updated market stats and analysis, they can advise you if selling your home in its present condition is a sound decision, or if it puts you at a bigger disadvantage.
- They can help you price your home correctly. Sellers are often influenced by their emotions when pricing their homes. Real estate professionals, on the other hand, are trained to view every transaction objectively. They can conduct a Comparative Market Analysis to determine a competitive but profitable price for your property. In doing the CMA, they will take several factors into account, including the prices of recently sold homes in your area, your home’s features, the estimated cost of repairs, and so on.
Your Realtor can also help you come up with a pricing strategy that works best to your advantage. For example, they can help you decide whether to sell above, below, or at market value, and how much discount or premium to apply to the list price.
- Your real estate agent knows the best ways to market your property. When you sell a house as is, you need to highlight its best features to make up for the less than stellar condition. Your Realtor will know what these features are and how to draw buyers’ attention to them. They understand what buyers primarily look for in a home, such as a great location, a spacious yard, potential for expansion, architectural details, and so on. With their skills and knowhow, they can create a great listing that emphasizes these features.
- A Realtor knows how to market to the right buyers. Targeting the right buyers is essential when you sell a house as is, and your real estate agent knows which markets to focus on. They include first time homeowners, as well as house flippers, developers, and other investors who are often willing to pay in cash. Your Realtor has the knowledge and experience in reaching out to these buyers and negotiating with them to ensure your interests are protected. They can also use their network to spread word about your listing to your targeted markets.
Get professional guidance from a top Realtor in Williamsburg, VA
With the right professional by your side, you can get the best profit for your house when you sell it as is. Work with an experienced Realtor who can help you navigate the most challenging market conditions. Get in touch with our team at Coldwell Banker Traditions.
We are a group of real estate professionals with decades of experience in Williamsburg, New Kent County, and the Hampton Roads area. As part of the prestigious Coldwell Banker brokerage, we give our clients the edge over the competition, harnessing Coldwell Banker’s technical expertise, global reach, and extensive network.
We will listen to your needs, preferences, and goals, and work over and above to achieve the outcome you desire.