Selling a Home As Is

In residential real estate, we often talk about “As Is” when selling homes. Here are my thoughts about buying and selling homes listed “As Is.”

When sellers choose to sell their homes “as is,” it means that they do not have the time, money, or inclination to make any repairs that might be indicated by a home inspection. If they know of material defects in the home, they must disclose those. Listing a property “as is” does not relieve a seller of disclosure.

On an inherited property, the sellers might not know the condition of the home and may choose to list this way. This is the main definition of “as is” but you can read on for more details. In a hot seller’s market, homes are often listed “as is” because the homes will sell that way and it is less stressful for a seller. It is definitely more stressful for buyers though!

Listing a home for sale “as is” will turn off some buyers. I regularly get questions from buyers about this and they feel like the seller may be hiding something. Having a smaller buyer pool may reduce the eventual sales price of a property. In the hot seller’s market we’ve been experiencing, it won’t be too much of a factor. Some buyers must use FHA or VA for their financing. Those homes go through a special appraisal and certain repairs must be made to approve the loan. Listing a home “as is” may mean not accepting buyers with these types of loans.

During the Great Recession, we were (obviously) in a buyer’s market. Back then, buyers often put in a ridiculously long list of repairs for sellers to perform; it was truly out of control. You’d hear buyers complain about things not being “up to code,” which doesn’t even apply to resale homes. This is one reason why sellers may choose to sell “as is” so they don’t have to deal with that.

Contrary to popular belief, a completed Seller’s Disclosure is not required to sell a home in Kansas, but it is rare when we don’t have one. When completing a Seller’s Disclosure, it is of utmost importance to do it accurately. If a seller has never lived in the home, that should be stated on the disclosure form; unknown items should have “unknown” written next to each and every item.

A better way to sell a home “as is” is to have a few important maintenance items performed prior to listing: termite inspection, furnace/AC cleaning, and a roof inspection. Also, offer a home warranty. A warranty is about $500 and is paid out of proceeds, not paid for up front. If there are foundation cracks (other than hairline), a well-known foundation company should look at that ahead of time. Providing receipts for these items gives everyone peace of mind and a much smoother real estate transaction!