Very few homeowners are enthusiastic about spending money to fix up a home that they will soon turn over to a new owner. Oh sure, the door from the garage out to the side of the house has some rot at the bottom, but that’s the garage and no one actually sees or uses that door anyway.
Like more than half of current home sellers, you may have decided to just sell your property “As-Is” and let the new owner fix what they decide is urgent.
But is that actually the best strategy for selling a home and netting the most you can?
There are two stages in the home selling process. The first stage is getting the property ready for the real estate market, listing it for sale, and the actual marketing of the home that results in the best possible price offered and accepted.
“Curb appeal” is always important. How your property looks to a prospective buyer driving through your neighborhood can be the determining factor in whether or not they want to see inside. Once inside, if that buyer sees a home that doesn’t look like it desperately needs repairs, he is much more likely to make an offer than if he sees a lot of problem areas. Buyers sees those red flags and think “… how many more problems are there that I can’t readily see?”
We counsel our sellers to take stock of issues prior to listing, and get the problems fixed! You’re more likely to get an offer you’re happy with if the buyer sees your home is in great shape, so budget for some home repairs and put your home in top condition for selling.
The second – and just as critical – stage of selling your home is getting that buyer to the closing table. It can be a huge blow to think your home is sold and then have the deal fall apart after you’ve already put a deposit down on your new home, and have your entire household in boxes.
Here’s a tip to reduce the likelihood of a buyer walking away prior to closing. Don’t let your real estate agent list your home “As-Is” in the MLS, and do insist that the non As-Is version of the sale and purchase contract be used.
Many erroneously believe that the As-Is contract provides the most benefit to the seller and not the buyer. After all, the contract specifically states that the property is being sold As-Is and that the seller will not be contractually bound to make repairs. On the surface that sounds like a good deal for the seller, who is naturally adverse to being required to spend any more on the house he is leaving.
Obviously, we are Realtors and not attorneys, and as such we do not dispense legal advice. However, it has been our experience that the As-Is contract is frequently most advantageous to the buyer, who can decide to cancel the contract for any reason, and at his sole discretion, at any time during the agreed upon inspection period.
In comparison, the non As-Is contract provides for limits as to how much the seller will be required to spend to repair any warranted items. Warranted items include the roof, plumbing, electrical, A/C, etc., and do not include items whose function is solely cosmetic. These repair limits get negotiated along with the other contract terms, before the contract is finalized.
Here’s the real clincher. In order for the seller to be required to make these repairs, the buyer must have inspections performed by individuals licensed to do so, during the inspection period. And the only issues the seller can be required to address are problems with warranted items. The buyer can’t perform his own inspections (unless his is licensed to do so), and can’t cancel just because he decided he doesn’t like the flowered wallpaper in the kitchen after all.
If you are serious about selling your home, want to get the best price, and want to reduce the possibility of your buyer backing out on a whim, think twice about selling As-Is! And of course please consult a real estate attorney prior to signing an offer if you have any questions about this or any other aspect of the purchase contract.
Lastly, it is always in your best interest to list your home for sale with a Realtor who has the experience and knowledge to help you be most successful as a seller.