Selling a home as-is has its perks, from saving on the cost of preparing your home to potentially avoiding painful repair negotiations with a buyer down the line. But there’s one major drawback to selling as-is: less money in your pocket. So, how much do you lose selling a house as-is?
When selling your house as-is, the buyer purchases the home with the understanding that the seller chooses not to make any repairs or improvements. The buyer accepts the property in its present condition, paint scuffs, leaky faucet, and all, without warranty from the seller.
“They’re letting the buyer know in advance that there’s no intention of making any changes to the property, not fix things or improve things,” says Batterman. “What you see is what you get,” she adds. This differs from a typical sale, when sellers often make repairs and improvements to their house before listing and selling.
That isn’t to say that as-is sellers are off the hook from disclosing known issues about the home. If the homeowner lives in a state that requires disclosures and knows about a major issue that could affect the home’s value or appeal, like a cracked foundation, they need to let buyers know.
Plus, an as-is sale doesn’t stop the buyer from getting a home inspection. Whether you’re selling a house as is for cash or not, the buyer has the right to inspect the home, within the terms of the purchase agreement, for potential defects. If the buyer discovers a serious problem that wasn’t disclosed upfront, they may want to revisit the price or other deal terms.
Batterman often recommends a pre-listing inspection to sellers. By having the home inspected before a buyer gets involved, the seller can disclose any defects in advance and ease buyer hesitation.
For buyers, an as-is sale can be scary, says Batterman. “But if they’ve got an inspection report, [buyers] have a really good idea of what they’re going to encounter. So there’s a lot more confidence there.”
What factors affect how much you could lose on an as-is sale?
Buyers will spot things like scratches, outdated features, and repairs that need to be made—and they may use them as reasons to lower their offer. With an as-is sale, those first impressions can have a bigger impact on your final payout. Understanding what buyers focus on can help you set realistic expectations. Here are some factors that may affect how much you lose when selling as-is:
Type of buyer
You can expect a different offer price when selling as-is to someone who wants to live in the home versus an investor profiting from the purchase. Here are the two types of as-is buyers:
Buyers who plan to occupy the house
Potential buyers who find out a home they’re considering is being sold as-is tend to become suspicious, says Batterman. “The buyer has an idea that there’s something more to the story than maybe what they can see.”
Batterman goes on to explain that buyers worry about potential issues cropping up down the road, particularly with repairs that could exceed initial contractor estimates.
Once upon a time, buyers sought fixer-uppers for instant equity by putting in the work themselves. But nowadays, Batterman estimates that 90% (or “even a little more”) of buyers would rather buy a turnkey home that is ready for move-in.
The result? You limit your buying pool when selling as-is. In Batterman’s experience, “Oftentimes [buyers] offer you less money than you’re asking for the property, or you’ll have fewer offers in a seller’s market.” Home’s condition
The better the condition of your home, the closer you’ll get to market value when selling as-is. Conversely, selling a house in poor condition, which requires a major overhaul, tends to receive much lower offers because of the time, effort, and upfront cash required to bring the home to a condition that aligns with similar homes in the area.
Fulmer offers an investor’s perspective: “We generally try to make more profit on a house that is going to require significant repairs than on a house that just needs minor updates.”
Home improvements
The condition of your home, including any improvements you’ve made, can significantly affect its market value. Renovations like a modern kitchen, updated flooring, or a new HVAC system often justify a higher asking price.
When you sell a house as is, you’re not making these updates, which can cause buyers to offer less. They may see the property as a project and reduce their offer to cover anticipated repair costs.