Selling As Is..

davo1111May 30, 2010

I want to sell my present home in its "as is" condition. Is this legal, or possible? The house was built in the 50's and needs alot of work. I know I should do the work and then sell it, but I have no interest in doing this. What is the best way to go about doing this or is this a bad idea all together?

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live_wire_oak

Sure, you can sell it "as is", but it had better be at rock bottom investor price. You won't sell it at even close to market average. There are way too many homes on the market now doing every thing they can to be competitive and still having to lower their price to get a sale. Your home is going to compete against those that show much much better, so the only way you can put up a SOLD sign is to come way down on price. WAY down.

    Bookmark   May 30, 2010 at 8:41PM
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trilobite

I'm going to guess you've been there for awhile, so you're not trying to pay off an existing mortgage or anything like that? As long as your place is appropriately priced for condition, it shouldn't be a problem.

That said, a few comments.

If your house is the sort that would appeal to a first-time buyer, you're going to have a more difficult time. First-time buyers are nervous already and usually don't want to do a lot of work before moving in.

If your local market is particularly slow, your house may linger a long time.

Also, I'm assuming we're talking about mainly cosmetic and basic maintenance. If you have a foundation with problems or a septic that needs to be replaced or some other big ticket item, it will probably be very difficult to find a buyer.

    Bookmark   May 30, 2010 at 11:08PM
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terriks

All used homes are basically sold "as is". The only time I can think of that you would need to make repairs is if the lender requires it, such as with a VA loan.

    Bookmark   May 31, 2010 at 11:06AM
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Carol_from_ny

Much depends on the not just the age of the house BUT where in the country you are, the size of the house, it's price range and it's location relative to what's hot and what's not in your particular city.
There's alot of factors that play into how long it will be on the market. Selling "as is" shouldn't be a problem as long as it's stated in the listing up front, you aren't making any updates or repairs. The problem comes in when lenders make demands to "protect" their loan. Then it comes down to whether the buyer has the cash in hand to fix things enough to get the loan or if they are going to push you to do it. If you stand firm and refuse you may loose the deal. If you agree to do it or split the cost then the sale may go thru BUT you will be out more cash.
Even with selling it "as is" you are still going to have to make it as clean as you can and you are going to have to declutter things in such a way that inspections can easily be done. Meaning the attic needs to be clear, basement needs to be cleared to the point where the mechanicals can easily be looked at from every direction.
It would help you greatly if you have hardwood floors to remove the old carpets. Old carpeting that smells or looks worn even in a dated house makes thing worse.
Major repairs like a bad roof or a furnace that isn't working are going to be major obstacles for most buyers.

    Bookmark   May 31, 2010 at 12:30PM
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brickeyee

"as is' dopes not absolve you of revealing known problems.

Depending on the state not revealing the known problems can be very expensive for a seller, or so hard to pursue legally that the buyer cannot mount a decent case.

    Bookmark   May 31, 2010 at 7:43PM
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creek_side

"All used homes are basically sold "as is". The only time I can think of that you would need to make repairs is if the lender requires it, such as with a VA loan."

Exactly, in fact every home that I can think of that I have sold using a standard RE sales contract has had "as is" in the boiler plate.

Sometimes there are negotiated repairs, but the basic used home sale is "as is." You just have to make sure you disclose properly, which generally means you have to inform prospective buyers of hidden defects that you are aware of.

    Bookmark   May 31, 2010 at 7:49PM
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Billl

Generally, you will make more money fixing problems before trying to sell, but many people don't. There is nothing wrong with selling "as is," but it is a costly decision. Buyers are going to take your price and then deduct X for this and Y for that and Z for this other..... even if your home is already discounted.

    Bookmark   June 1, 2010 at 9:16AM
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loves2read

in my state--TX--sellers have to fill out a disclosure document for any house they list through MLS--I don't know about for-sale-by-owner situations--if the law required the disclosure document...
but it asks questions about issues like termites. water intrusions, remodeling, foundation problems...lots of things that can be problems...
the seller is supposed to fill out the list accurately and truthfully--
but the seller does not have to have problem areas fixed--
like if there is a non-working dishwasher--they can just admit it is not working...

listing a house for sale "as-is" means that the seller is not obligated to revise the sales/contract price for any repairs that might be addressed/caught during inspection that were not on the disclosure document...

BUT the buyers also have the right in Texas to back out during the 10 day option period for any reason...

there have been houses that have come on the market in my area that have been "as-is" and frankly they usually show very poorly because they are dated,- and often times have pretty evident problems--like foundation issues--
or/and sometimes are still in construction phase because a builder has gone bankrupt and left the project half done...

you can't get any kind of a home insurance policy on house like that...

selling a house "as is" in my area is usually a red flag and buyers would expect to see a SIGNIFICANT price drop...
of course there are homes that are listed for sale and are very dated--where sellers made no attempt to spruce them up--
in that case--if problems are discovered during inspection the buyers can ask the sellers for reasonable accomodation and renegotiate the price...sometimes the sellers are amenable and sometimes not...just depends...

    Bookmark   June 1, 2010 at 9:01PM
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chrisk327

It really depends on where you come from. In NY all homes are "as is" sales. No one fills out the disclosure form here, you pay a $500 penalty for it.

There are a lot of houses in bad shape, and its reflected in the price, but certianly not "rock bottom priced". regarding repairs, you can't make a silk purse......

If a house isn't in good shape a few minor tweaks may help, real renovation and repairs are going to be a waste.

In my area the only "rock bottom priced" houses are those that are in such disrepair you can't get a mortgage as they meet the definition of condemned, do not have a bathroom, or heat, or a kitchen.

Its different everywhere, but you definately don't have to fix anything.

    Bookmark   June 2, 2010 at 4:22PM
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zandra

I just sold my house as-is to a cash buyer on the first day. yes it was a bit of luck but I started out pricing it right, as in doing my own comparable market analysis before calling an agent, and being picky about hiring an agent. The fact was there was no doubt left in my mind I was ready to leave, and I simply cannot afford to fix it's many serious issues. The house is in a nice looking neighborhood of small homes near the ocean in CA, which was it's primary feature. The decision was helped by the realization that now I can finally move to another state and buy a much smaller home outright (no mortgage). Hard to argue with that, also, although I'm not yet retired my job is such I can pretty much pick it up again anywhere.
Consider what you are going to do for a new place carefully before you decide to sell. If everything is a go, or if you are the adventurous type, your in good shape.
btw, I did have to grit my teeth and fill out an extensive declaration page. I was embarrassed but hey they still wanted it and I got more than my base asking price. Once in a while when you are on the right track, something really great happens, in my case, it was finding out my lender (Rural Development) is letting me keep $30k more than I thought out of the sale, which is mind blowing and puts me into a new bracket for my next place.
(*TY St. Joseph!)

    Bookmark   June 3, 2010 at 1:41PM
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herus

zandra, have you thought about buying a lottery ticket?

    Bookmark   June 4, 2010 at 11:12AM
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annie1956

when we listed my Mom's house the realtor told us there really wasn't an "as is" in that town. There was a VERY strict seller's inpection that had to pass by the twp code inspector (down to cracks in the sidewalk, all windows opening and staying open, no chipped paint etc). So if you wanted to sell "as is" and didn't want to fix anything then it was understood the buyer wasn't getting a co until EVERYTHING was fixed. (And alot of it was really petty stuff). We were fortunate that our punchlist was minor.
(And the inspector was in a good mood that day).

    Bookmark   June 5, 2010 at 8:05AM
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worthy

VERY strict seller's inpection that had to pass by the twp code inspector (down to cracks in the sidewalk,

Wow, make sure I avoid that Nanny town! Or pray the messenger of the Gods is in a "good mood". When I worked in the rotten Apple you could always make their day by greasing their palms.

In Ontario, vendor disclosure is voluntary and prominent real estate solicitors advise vendors tonotfill them out. That's why you buy with open eyes and hire appropriate inspectors. For my part, I assume there are lots of defects in a resale house. So I'm not surprised at all by the water now puddling in an unused corner of our basement. After all, the fresh paint on the floor, the waterline on the first row of blocks, the sagging eavestrough and depressed area near the foundation were pretty good hints of floods past.

    Bookmark   June 6, 2010 at 9:05AM
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worthy

VERY strict seller's inpection that had to pass by the twp code inspector (down to cracks in the sidewalk,

Wow, make sure I avoid that Nanny town! Or pray the messenger of the Gods is in a "good mood". When I worked in the rotten Apple you could always make their day by greasing their palms.

In Ontario, vendor disclosure is voluntary and prominent real estate solicitors advise vendors tonotfill them out. That's why you buy with open eyes and hire appropriate inspectors. For my part, I assume there are lots of defects in a resale house. So I'm not surprised at all by the water now puddling in an unused corner of our basement. After all, the fresh paint on the floor, the waterline on the first row of blocks, the sagging eavestrough and depressed area near the foundation were pretty good hints of floods past.

    Bookmark   June 6, 2010 at 10:00AM
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brickeyee

There are some jurisdictions that actually revoke COs at every sale, and then force a re-inspection to issue a new one.

It is mostly a way to catch un-permitted improvements and raise property tax assessments.

It can turn into a real fight when older wiring methods that are no longer accepted are present (no grounds being a common problem).

    Bookmark   June 6, 2010 at 1:54PM
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annie1956

Brickeyee that is exactly my mom's town. It can be a real nightmare. Cost's $100 for the original inspection (and reinspection w/i 30 days if you "flunk" cause it's only good for 30 days). We actually flunked because the electrical box wasn't labeled. (I know it's a good thing to have done - it wasn't on "the list" so we didn't do it - huh.) The doors also have to have those stopper things, no holes in the walls - not even in the sheetrock in the garage! No cracks in the windows. The shingle siding couldn't have any cracked shingles - they had to be replaced. I could go on.....
We were lucky because Mom's house was well maintained so we had little to do - and it still cost us $8,000 of minor things to get it ready - and the house was built in 1966 - so it's not like it was really "old".

    Bookmark   June 7, 2010 at 3:26PM
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sylviatexas1

"Buyers are going to take your price and then deduct X for this and Y for that and Z for this other..... even if your home is already discounted."

That's been my experience, too.

    Bookmark   June 7, 2010 at 3:34PM
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marys1000

I have seen the realtor put right in the MLS listing
"house sold as is, needs work and IS PRICED ACCORDINGLY"
to try to get past that deducting mindset by letting people know up front the price includes the condition. Don't know if it helps or not.

    Bookmark   June 19, 2010 at 10:27AM
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totsuka

As is just means you don't want to fix anything, but you still have to disclose what is wrong. So don't get clever and try to hide something. Just lay it all out there.

    Bookmark   September 4, 2010 at 7:00PM
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blueheron

Nowadays, most buyers put a contingency in the offer that the house has to appraise at or over the selling price That's so they can get a mortgage. Lenders are understandably nervous about giving mortgages after the latest fiasco in the mortgage lending market.

    Bookmark   September 4, 2010 at 8:42PM
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worthy

"As is" doesn't absolve the Vendor from disclosing that the property has been used as a grow op or meth lab. Often disclosure is mandatory, as in British Columbia. That's even after full remediation.

    Bookmark   September 5, 2010 at 7:28PM
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larke

Worthy - bought and sold lots of places in Ontario, never heard of not disclosing things (on the form), and BTW, we don't have 'solicitors', but lawyers (as attorneys are called in the US and solicitors in the UK.

    Bookmark   September 5, 2010 at 8:39PM
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pollopicu

The one problem that we've come across as buyers who are actually looking for an "as is" home, believe it or not, is the fact that FHA inspectors are very strict, and unless the repairs are fixed, your pool for home-buyers won't be as vast.

For example: A buyer is approved for an FHA loan, finds a house they love, but needs a bit of work, FHA won't allow the seller to take off the listing price for the repairs as they would be able to do for a buyer who has a conventional loan, because FHA needs to SEE the repairs done before contracts are signed. It actually sucks. So in other words, you might find someone who doesn't mind buying your house "as is", and who is approved for an FHA, but they will not be able to make an offer since it's understood you won't fix anything extra, and they cannot afford to put 10% down on a conventional loan.
If however, the buyer is totally in love with the house, the last resort would be to try to apply for a 203k loan (for major repairs over $35,000), or a streamline k (cosmetic repairs below $35,000). It's a tedious process, but some people are willing to go through it if they feel the house is worth it. But again, most people wouldn't want to go through all that for a mediocre house. So most likely if you're selling your house as is, you have to be prepared that you're only going to be selling your house to people who can afford conventional loans.

    Bookmark   September 6, 2010 at 11:49AM
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