There are plenty of homes for sale “as-is” in the San Diego real estate market and elsewhere, but what does this mean exactly?
In real estate, “as is” is a term used to describe a home that’s listed for sale in its current condition. In other words, the seller won’t make any repairs to the home from the second it’s put on the market to the moment it closes.
For instance, let’s say you have an Encinitas home for sale and you’ve decided to list it “as is.” In this case, the buyer agrees to purchase the home understanding that what they see is what they get.
There are a few key benefits of selling a house “as is,” and even the top Encinitas realtor may recommend that you list your home on the market without making any repairs to it.
Why Sell A House “As Is?”
Now that you’ve decided to list your Encinitas home for sale (or perhaps elsewhere in the San Diego real estate market), and put it on the market “as is,” you’re still wondering what are the key benefits of selling a home without making any repairs to it?
To help put this into perspective, we’ve put together a list of key benefits of selling a house “as is” that you can read below.
But before we get started, it’s good to remember that a home for sale “as is” comes with an important caveat: the seller must disclose any problems or issues that would impact the value of the home and affect the buyer’s ability to quietly enjoy the property once the sale has closed.
Some disclosure examples are plumbing issues, structural flaws, environmental hazards and noise nuisances caused by airborne or impact sounds. Even the top Encinitas realtor will advise any seller to disclose these types of issues.
What’s more, sellers’ disclosures are part of California’s real estate disclosure laws. This means that they’re legally required in the San Diego real estate market. And almost all states across the U.S. have disclosure requirements of their own.
Key Benefits of Selling a House “As Is”
1. Quicker Sale
One benefit of selling a house “as is” is the potential for a quick close.
To compete against renovated properties, an “as is” home needs to be reasonably priced, especially if the home comes with a long list of problems that you’ll need to disclose to the buyer. If this is the case, you should expect that buyers would pay less for your home than they would for a renovated one in the vicinity.
You may think that selling your home at a lower price is unfair just because it’s not as spiffy as the one down the block. But there’s a silver lining here.
An attractive price tag could draw in prospective buyers quicker than an aggressively priced, turn-key home down the street. In turn, this could lead to a quicker sale, rather than your home collecting real estate dust by sitting on the market for too long. Also, buyers who are looking to put their stamp on a new home might prefer a fixer-upper or an “as-is” property anyway.
If you’re curious to know your home’s worth before speaking with a real estate agent — where it’s in the San Diego real estate market or elsewhere — check out our comparison of the best online home value estimators.
2. Cash Offer Potential
You’ve heard about the ubiquitous real estate deal — a property with an asking price that’s “too good to be true” that no homebuyer, real estate developer, or investor would dare pass on it. More often than not, these “property gems” are “as-is” homes with perfectly good bones. They were built on solid foundations albeit with the wear-and-tear of an aging property that hasn’t seen an update in years.
But no matter: if you’re looking to attract a cash offer on your home, it may come as no surprise to you that an “as is” property for sale will spark the interest of a real estate developer or investor who’s looking to close quickly and is prepared to make an all-cash offer on your home.
These buyers are in the “fixer-upper market.” Typically, they don’t mind purchasing a home that’s in a state of disrepair. On the contrary, these buyers prefer a home that they could either demolish and rebuild from the ground up, or demo the existing structure to renovate it to their liking.
3. Avoid Expensive & Time-Consuming Repairs
You may not have the wherewithal to renovate your home, period. Let’s face it: your time is better spent elsewhere, especially if you’re considering making the repairs yourself instead of hiring a handyman or contractor to do it for you.
That said, you can certainly give your home a quick spruce by making a few inexpensive cosmetic changes. These changes will increase your chances of attracting different buyer personas — not just the ones looking to flip the property after a quick close.
Also, sprucing up your home can help it make a good first impression on prospective buyers. For instance, slapping on a new coat of paint to the walls in the living room and replacing a rusty showerhead can go a long way in an open house. But the best part is that these quick and effortless updates won’t make a huge dent in your bank account, so you can save your money for other expenses like the home inspection, escrow and recording fees at closing.
4. Consider ROI
Here’s the ugly truth about home improvements and renovation costs: their returns on investment aren’t as robust as you may think. In other words, that $50,000 inground pool won’t add $50K to the overall value of your home. According to the National Association of Realtors (NAR), the average ROI of a home’s renovation costs is approximately 68%. This means that your $30,000 kitchen makeover is actually worth $20K, so you’ll only end up recouping about two-thirds of what you put in.
Sure, real estate appreciation can make up for the difference over time, but do you have the time to wait? Remember, you need to sell your home yesterday. And investing in repairs hoping that you’ll recoup the entire renovation cost is nothing more than a chimera: a thing that is wished for but is impossible to achieve.
Finally, you might have ambitious plans for a new house in the San Diego real estate market or elsewhere. Therefore, strategically saving your money in this sense can help make those plans come to fruition. And if those plans happen to lead you to the Encinitas, San Diego, or North County California markets, we’d love to hear from you.