If you’re thinking of selling a house as is, you’re going to want to read these tips on how you can get the most value out of your property!
While the housing market may have cooled off in 2018, it is still a good time to sell. In fact, experts forecast that 5.4 million homes will be sold in 2019.
This is a 1% increase from the year prior, so the housing market is still in positive territory. Also, median home values are expected to rise to $266,800 next year. This is a 3.1% increase from the year prior.
One risk factor is that interest rates are on the rise. This reduces a buyer’s purchasing power and encourages selling fast. As a result, many opt for selling a house as is to speed up the process.
Read on for a comprehensive guide for selling a house as is. Explore tips on how to maximize the value of your home on the real estate market.
Obtain a Pre-Listing Inspection
Envision a scenario in which your home is under contract and is moving quickly towards closing. The inspector uncovers a major structural issue in the foundation. The buyers are spooked and use this negative information to get out of contract.
This is any homeowner’s worst nightmare. But, this can be easily mitigated by obtaining a pre-listing inspection. This means that you hire a home inspector before putting the house on the market.
When issues are discovered, you can repair them. This greatly reduces the risk of a buyer walking away from the deal.
In addition, it may speed up the home sale. If the buyer’s lender accepts the inspection report, one less thing needs to be done before closing.
Get Renovation Estimates
Some homeowners opt for selling a house as is because it is in poor condition. The owner may not have the financial resources to renovate the house before sale.
Another consideration is that homeowners only recoup a portion of the money put in for renovations. The return on investment is likely not worth it for last-minute renovations before listing.
Buyers will take note of items in your home which require repair or renovation. For example, the buyer may determine that the hardwood flooring needs to be replaced. They will include this as a justification for submitting an offer lower than the listing price.
For this reason, you should obtain contractor quotations for any necessary renovations or repairs. This way you can factor these items into the original asking price. Another perspective is to keep the quotes in your back pocket for contract negotiations.
Put it On the Market
There are a few different ways of selling a house as is. The cheapest route is for sale by owner (FSBO).
By paying a small fee, you can have the home placed on the MLS listing. This way, your home comes up in online searches performed by licensed real estate agents.
While it is the cheaper option, there is a downside to FSBO. Homes listed with a real estate agency sell faster.
On average, FSBO takes 19 days longer to sell. In many cases, FSBO homes are relisted to move up the search rankings.
The downside to listing with a realtor is the cost. Real estate agents are paid commission based on a percentage of the sale price. Typically, this commission ranges from 5-6%. On a $200,000 sale, the commission will cost you $10,000 or more.
Ultimately, the choice depends on your personal preference. If cost is not an issue, choose a realtor to sell the house faster. If you are strapped for cash, FSBO is the better option.
Set the Listing Price
Now that you have inspected the house and estimated repair costs, it is time to set the listing price. If you decide to list your home with a real estate agency, they will help you assess home value.
The real estate agency performs a comprehensive price analysis. It includes price comparisons to recent sales of similar homes. The analysis takes into account variables like square footage and the number of bedrooms.
If you opt for FSBO, the burden is on you to determine the sales price. The good news is there are many free online tools to help you. Like a real estate agent, you need to compare to other recent sales and find the best analogy.
You will also need to make adjustments based on the home’s unique characteristics. For example, if you have a detached garage that needs to be factored into the price estimate.
Another potential price variable is the size of the land. Make sure to make apples to apples comparisons to fully capture the value of your property.
Selling a house as is comes with many negative connotations. You can sympathize with buyers that are imagining the worst.
Usually, the buyer finds out you are selling a house as is through a note on the online listing. Naturally, a number of negative thoughts run through the buyer’s head.
They are wondering what is wrong with the house and if the seller is hiding something major. You need to mentally prepare for tough questions.
Arming yourself with information such as the inspection report or contractor quotations will help. Respond to inquiries with a calm demeanor which exhibits confidence to the buyer.
Honesty Is the Best Policy
Failing to disclose negative information will have devastating consequences on closing. As discussed above, the buyer is coming in skeptical.
Even the slightest white lie or misleading fact could scare off the buyer. For this reason, honesty is the best policy. Before they discover more potential issues during the process, be upfront with them.
Clearly communicate to the buyer what you learned in the pre-listing inspection. Inform them of any quirks or minor issues that need to be resolved. By doing so, you will build a trusting relationship with the buyer that helps facilitate the closing.
Selling a House As Is – Wrapping It Up
If you do not have the time or financial resources to make repairs or renovations, selling a house as is may be the perfect alternative. Taking steps like a pre-listing inspection or getting renovation estimates make the process smoother.
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