If you are a seller that does not want to replace the 20 year avocado-colored Formica countertop or you think the buyer of your home will be comforted knowing there is a another good year left on your roof or water heater that is two decades old...
You may want to rethink your “as-is” mentality.
“If it ain’t broke don’t fix it.”
Well, sorry to say to all of you “as-is” sellers out there, that phrase is not always true in today’s real estate market. In Philadelphia, where we represent many sellers and buyers for condos and single family homes, we have come to the conclusion that today’s buyer has very discerning tastes. The Modern Consumer (of all goods these days, not just RE) is educated, qualified, and ready to buy, but these folks are willing to wait for the very best property with the lowest possible price. Good for them. But that does not make it any easier on the “as-is” seller.
What is an “as-is” seller to do?
The easy answer is to wake up and smell the nonfat extra foam iced vanilla latte (aka coffee)! Fix it or forget it and lower your price. If you plan on sticking to your “as-is” approach you must price the property under market value and expect your buyer pool to thin out considerably. For buyers, an “as-is” sale is scary and risky particularly for first time buyers. When it comes to the fine art of real estate sales, sometimes it does not have to be broken to recommend something be replaced.
Creative option for the “as-is”-ers
Converting to the creative approach might be a better solution for sellers who really want to sell their property “as-is” but are finding that is not working. The creative path is a good one for sellers who may not be able to put the cash out for a repair. The creative approach is giving the prospective buyer choices whether repairing, replacing or a credit is the best option. The seller can defer the cost of any repair to be paid at settlement from the proceeds of the house.
Example:
A 22-year-old avocado counter top or a roof that needs replacement are samples of an “as-is” feature. The seller can give the prospective buyer a few options to choose. These options prevent the seller from making unnecessary improvements and gives the buyer some power in the decision as well.
Options:
- Replace counter and roof with the seller’s chosen material by the seller’s chosen contractor and the contractor’s estimates can be disclosed to all prospective buyers.
- Credit the prospective buyer with the amount disclosed on the contractor invoices so the buyer can use that credit toward whatever they want to be installed by whoeer they want after settlement.
- Reduce or increase the sale price by the the exact amount of the materials and labor as quoted in the disclosed contractor invoices.
These choices add some complication to the negotiations but that is the nature of trying to sell an “as-is” property in a buyer market where buyers are educated consumers with a decent amount of leverage in the market right now.
Are the words "as-is" the kiss of death for a seller? My answer is: Could be if the seller is not willing or able to be flexible. An old proverb says "A willow that does not bend with the wind will surely break." unknown author
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Very well said. As is ~ Should expect to receive under market value... there is always another one around the corner for a buyer.
Good suggestions, but the trick is getting folks to actually come and see that property. You are right - it's the price that will get them there. This is one reason I tell people - do the things while you live there, that you will eventually need to do to sell it!
Very well written - think I"ll have to re-blog this one - thanks!
The term "as is" can be so frustrating for agents and buyers. They are intimiadating and you just don't know for sure what to expect (until the inspections are completed). Adding suggestions or options for those needed updates really helps the buyer see the possibilites!
Kelly- I agree. When buyers or Realtors see "as is" they may just pass on showing the property at all.
Karen- right on. Keep your house updated and well maintained while you live there and when you sell it, "as is" won't be a topic of conversation.
Lori- re-blog it. Glad you found this informative.
Terrie- Intimidating is the best way to describe it.
And "as is" is really not worth the paper it is written down on. The buyer is going to be asking for something to be done or credited, so be prepared.
Chris.. excellent post. This is a great, realistic approach to sellers and to make them aware that this could keep people from buying their home. I definitely loved this sentence of yours...
"The easy answer is to wake up and smell the nonfat extra foam iced vanilla latte (aka coffee)!"
How funny... lol non-fat. In any case, excellent post and I suggested it for a feature. It was short, sweet, and to the point. Nice job.
Jeff- thanks for the comment. With a reference to "non-fat" who do you think really wrote this post?
Jane- You are right but like I said to Kelly above... just asying "as-is" in your advertising will cut your showings in half. Those words alone can prevent someone from even looking at the home.
Good post. We always say, 'Why sell your home as-is when you can sell it as the best it can be?' Investing in your home before you put it on the market always costs less than if you leave things 'as is' and wait for a buyer to knock thousands of dollars off their offer to make up for all those things they have to upgrade or finish.