Selling your home “as-is” may seem more convenient, but it can also mean leaving money on the table.
According to Gerard Splendore, a broker at Coldwell Banker Warburg, sellers could lose 15% to 30% of the home’s fair market value when they sell “as-is.” The exact amount varies widely depending on local real estate market factors and the home’s condition.
Before listing your home, consider how much you can lose by selling your house “as-is.” See what similar homes are selling for with a Home Valuation Report. Then, consider the pros and cons to determine the best selling strategy.
What Does it Mean to Sell a House As-Is?
Selling a house as-is means you sell the home in its present condition. “A listing sold ‘as-is’ essentially means ‘what you see is what you get,’” Splendore explains. This means no roof repairs, even if it’s sagging or leaking, no fresh paint, no removal of worn-out carpeting and so on.
Expert Advice on Selling As-Is
It may seem easier to list a home “as-is” without doing much work. However, you could have a lower selling price and fewer offers. Even small updates or repairs can make a big difference.
“I always walk through a home with a seller before listing an apartment and suggest minor repairs if needed to make the property more marketable to buyers,” says Jennifer Roberts, a broker at Coldwell Banker Warburg. “It’s worth it to spend money on some upgrades as it’ll increase the value of the property, and buyers won’t have as much reason to negotiate off the listing price.”
Roberts says sellers can also appeal to a larger pool of potential buyers by addressing issues with the property. This increases the seller’s chance of receiving multiple offers or a higher selling price.
An As-Is Sale Still Requires a Seller’s Disclosure
One common misconception is that there are no disclosure requirements when selling “as-is,” but this isn’t true. Sellers must follow state and federal disclosure laws, which vary depending on the property’s location.
“To some extent, the requirements of selling a home ‘as-is’ varies from state to state in terms of what must be disclosed,” says Dr. Jesse Saginor, associate professor of real estate development at the University of Maryland. “In Maryland, the Maryland Residential Property Disclosure and Disclaimer Statement requires disclosing knowledge about the foundation, basement, roof and other aspects of the home to the buyer even for sales that are ‘as-is’ sales.”
Pros and Cons of Selling Your House As-Is
Selling your house as-is has advantages and disadvantages. Consult your real estate agent to determine the best listing strategy for your home.
Pros of Selling as-is
- Faster closing process: According to the National Association of Realtors, properties typically stayed on the market for 26 days in August 2024. However, this doesn’t account for the time it takes to prepare a home for the market. By selling “as-is,” you can save time and get to the closing table much faster than if you were to make home improvements or other changes.
- Potential to avoid costly repairs: If you don’t have the funds to handle repair costs, you can avoid the need to make improvements and save on the cost of selling a home.
- Less stress and hassle: One of the biggest advantages is convenience. Renovations can be stressful and time-consuming. When selling “as-is,” you won’t have to negotiate with contractors or deal with unexpected problems.
Cons of Selling As-Is
- Lower sale price: Skipping repairs may save you money upfront, but homes sold “as-is” generally receive lower offers.
- A smaller pool of interested buyers: Not everyone wants to deal with a property that may need extra work. Many buyers will outright avoid the property if they see it being sold “as-is.”
- Potential for unexpected issues: Several issues can occur during an as-is sale. “If the buyer has the home inspected and it reveals issues above and beyond what the seller disclosed, then it may result in the buyer backing out or requesting a lower sales price to purchase the home,” Saginor says. “Buyers that are extremely well-versed in buying homes ‘as-is’ might be able to negotiate a much lower price for the home by overstating the costs of repairs.”
Factors Affecting Loss When You Sell As-Is
How much you could lose selling a house “as-is” depends on the extent of necessary repairs, the state of the housing market, the location and neighborhood and the type of buyer.
Extent of Necessary Repairs
A property selling “as-is” that needs major work, such as a new roof or plumbing, is in a different situation than a home that only needs minor repairs, like painting or new hardware.
“It is much cheaper to paint a house than it is to replace an entire roof,” says Saginor. “If the factors are significant, such as the presence of asbestos, water damage, roof issues and related items that are more expensive, then the loss incurred may be more significant.”
For instance, according to Angi, an online marketplace for home services, a new roof costs between $5,860 and $13,150 on average versus $966 to $3,071 to paint the home’s interior. A home that needs a new roof could see a greater loss than one that only needs a fresh coat of paint.
Market Conditions
Whether your area is in a seller’s or buyer’s market will also affect how much you could lose by selling “as-is.”
- In a seller’s market, demand for housing exceeds supply. Sellers have the upper hand, and buyers often have more competition over available homes. This can push home prices up and result in a faster sale, and buyers may be more willing to overlook certain issues with the home.
- In a buyer’s market, there’s less demand and greater supply. This gives buyers an advantage. Homes typically stay on the market longer, and sellers may drop prices to entice buyers or be much more willing to negotiate.
A home selling “as-is” in a seller’s market still has a good chance of selling quickly for a fair price. The property could sit on the market longer in a buyer’s market. You could be forced to reduce the asking price, and you may have to be open to negotiations.
Location and Neighborhood
Homes in sought-after neighborhoods have a much better chance of selling for a higher price than those in less desirable areas. Prospective buyers may also be willing to overlook some issues with the home and even pay more to live in these neighborhoods.
However, according to Splendore, most homes sold “as-is” can sell for 15-30% less than comparable properties. This happens because buyers know they must invest in repairs or improvements after purchase.
Buyer Type
The type of buyer, typically a real estate investor or owner-occupant, can impact the offer price on the home. Investors often see fixer-uppers as an opportunity to buy low, fix and flip the property for a profit. Because their goal is to generate income from the property, they may try to negotiate a lower price to fit their business model. They also usually submit cash offers, which helps shorten the closing timeline.
On the other hand, an owner-occupant is your typical homebuyer. They’ll live on the property and often form an emotional connection with it, which could result in a higher offer.
Best Strategies for Selling Your House As-Is
You must find the right real estate agent to sell your house as-is. A knowledgeable agent can help develop an appropriate selling strategy and set a competitive price. Your home’s list price should be based on recent home sales in the area, and the cost of repairs should be considered.
Here are some common strategies when selling “as-is.”
Pricing Strategy
Your real estate agent may run a comparative market analysis (CMA) to determine a competitive price to attract buyers. This involves looking at similar properties in the area that recently sold and using that information to estimate the property’s value. This will help ensure that you get as much money as possible while considering the home’s condition.
“When I am working with sellers that are considering selling ‘as-is,’ I strongly encourage them to allow buyers to inspect the property,” Splendore says. “When the sellers forbid inspection, buyers will be suspicious and unwilling to bid close to the asking price.”
Marketing and Promotion
After you have an asking price, it’s time to market the property through various channels. Your real estate agent may promote it through online listings with high-quality photos, virtual tours, social media posts and open houses.
Keep the home as tidy as possible and be upfront about its condition.
Disclosure and Transparency
Being upfront about known defects isn’t just considerate; it’s your legal obligation as a seller. Being transparent also helps you avoid any surprises that could deter buyers.
“Even if selling real estate ‘as-is,’ the seller must disclose defects known to the seller,” says Ted D. Disabato, managing attorney at TdD Attorneys at Law LLC. “Failing to disclose known defects subjects a seller to a lawsuit for fraudulent or negligent misrepresentation from the buyer.”
Laws vary depending on where you live, so check federal, state and local disclosure laws. You can also consult a real estate attorney. Some common disclosure requirements include:
- Death in the home
- Neighborhood nuisances, such as noises, odors or smoke
- Hazards, such as the risk of damage from natural disasters
- Homeowners Association (HOA) information
- Repair history
- Water damage
- Missing items, such as kitchen appliances
Negotiation Tactics
Even when selling “as-is,” sellers should be prepared to negotiate. Depending on the home’s condition, sellers should be realistic about incorporating the cost of repairs into the discount they may be willing to offer a buyer.
“It requires the seller to be knowledgeable about the cost of those repairs to negotiate against prospective buyers that may overstate the cost of those repairs in an attempt to lower the sales price of the home,” Saginor explains.
You don’t always have to lower the price of the home to attract buyers. You can also offer incentives and concessions. For example, you might consider offering a home warranty, covering the buyer’s closing costs or including appliances and furniture.
The Bottom Line on Selling Your House As-Is
Selling your home “as-is” may seem like hitting the easy button, but you still have certain obligations as a seller.
You can avoid costly repairs and the stress of preparing your home for the market, but homes sold as-is generally receive lower offers from a smaller pool of prospective buyers. Unexpected issues can also occur. These might include problems during the home inspection or a buyer backing out of the deal.
Your best bet is to partner with a local real estate agent with experience selling homes as-is. You should also be upfront and transparent with buyers about the home’s condition.
FAQs: Selling a House As-Is
Yes, you can still negotiate the price even if you’re selling “as-is.” However, you’ll need to be realistic and find a price that accurately reflects the home’s value and condition.
The potential risks include fewer interested buyers and a lower selling price than if you were to sell the home in better condition. You must also adhere to disclosure laws, and failure to follow these laws could result in legal consequences.
Minor, low-cost fixes can minimize the impact on your finances. For example, a fresh coat of paint or landscaping can help improve the look and appeal of the home without a big investment.
It’s best to sell a house “as-is” when you don’t have the money to make repairs or the home needs major repairs. It also may make sense if you’re in financial distress and selling “as-is” will help avoid foreclosure. Selling a home “as-is” also makes sense if you have time constraints and need to sell quickly.
Yes, there are certain legal implications of selling a house “as-is.” Per federal, state and local laws, sellers must disclose any known defects with the property and include an “as-is” clause in the purchase agreement. This informs the buyer that they are purchasing the home in its current condition.
Josephine Nesbit is a freelance content writer specializing in home improvement, real estate and home loans. Her bylines appear in various publications, including U.S. News & World Report, GOBankingRates, Rocket Mortgage and more. She also regularly works with real estate professionals nationwide to boost their content marketing efforts. Originally from Massachusetts, Josephine attended The Ohio State University and now lives in Michigan with her three young children.
