Home Selling in 95864>Question Details

Sharon Snyder, Both Buyer and Seller in Sacramento, CA

Selling older home 'as is' vs 'disclosures'

Asked by Sharon Snyder, Sacramento, CA Wed Sep 24, 2008

We're serious about selling our older Arden Park home. It's not a 'dump', but is on an enormous lot in a highly desirable area. Several neighboring homes have been purchased then knocked down, with new construction going up. We won't be surprised to see it happen here. While we need to wrest every dime possible from the sale, we are wary of getting involved in disclosures of 'defects'. After all, much of the place dates back 60 years or more! Any remodeling was permitted, but surely there is lead paint on the exterior, (for one example). Family and friends are issuing dire warnings that we should make it an 'as is' sale, citing their own recent experiences with Buyers who wanted everything 'just so'. Will selling 'as is' affect the price terribly? We want to avoid long hassles with Buyers. Advice, please? Thanks!

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In real life: You can't preclude the buyer from "asking" for anything or everything. No matter what words you put into the MLS. Many buyers, agents and sellers believe that the executed contract is only the start of the negotiating period and will negotiate all the way through the due diligence discovery period and on through to the end of the escrow.

Read enough Trulia consumer / buyer questions and you will see many buyers want to obtain concessions form the seller even after the close of escrow. That is human nature for many people.

You can try to put the buyer on notice that you will do no repairs, in your contract and in your MLS printout. I know buyers, I represent a lot of buyers. Most of the time they will try to negotiate an "as - is price" (discounted from market value, that is) AND THEN... they will ask you to do the repairs anyway. As a seller your point of view is that is "chutzpah"... buyers point of view is that they are being prudent.

A good way to mentally prepare for the negotiations is to watch a couple of hours of high stakes Texas Hold 'em Poker tournaments on one of the sports channels
0 votes Thank Flag Link Thu Sep 25, 2008
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
Contact
Dear Sharon: The California Residential Purchase agreement states that the sale is "as-is." It also gives the buyer the right to investigate the condition of the home and the obligation for you to disclose any materials facts about the condition of the home that will or could affect the buyer's decision to purchase. The buyer can then request repairs which you can refuse to make or agree to pay for and make or agree to a price reduction for the cost of the repairs or to pay the buyer for the repairs at close of escrow (all negotiable in your transaction).

What it comes down to in your situation is: who is the buyer? If the buyer is a contractor/builder, I've seen transactions where the buyer removed inspection rights at the time the offer is made thereby agreeing to purchase the property truly as-is (termites and all).

If the buyer plans on living in the home, that buyer will purchase the home in your neighborhood in the best condition and for the best price. Buyers want the best deal.

So, in answer to your question, yes and yes.

I hope this helps.

Erin Phillips
Keller Williams Realty
916-580-2227
Web Reference: http://SoldByErin.net
0 votes Thank Flag Link Thu Sep 25, 2008
Hi Sharon,

Thanks for asking a great question. I first want to address your subject line and then will address the detail in your question.

Regardless of if you sell your home 'as-is' or do plan to make repairs before or during escrow, you are required to disclose material facts regarding known conditions pertaining to your home. There are lots of forms to fill out prompting you to think about and disclose different things, such as disclosing any known issues with the central heat & air [the electrical systems, the plumbing, the roof, etc], ongoing maintenance to your property, remodeling done with or without permits, if you have pets on the property, if you have had any insurance claims or losses, if you have drainage issues, blah, blah, blah. There is a standalone Lead Based Paint Disclosure...there are certain types of sale transactions that are exempt from certain disclosures, such as a probate sale, or sale of a bank-owned property; but even those are NOT exempt from Lead Based Paint disclosure, Water Heater & Smoke Detector Statement of Compliance, Natural Hazard Disclosure, etc. It may sound a bit overwhelming, but your agent will assist you as you navigate through the disclosure process to complete the necessary and proper forms. Disclosures are not only for the buyer's protection, but they are for your protection in the transaction too.

As Elizabeth points out, the standard language in the California Residential Purchase Agreement indicates that the subject property is sold as is, unless otherwise agreed to. You may want to have your agent make a note in MLS in the Agent Only Remarks section something to the degree that "Seller prefers to make no repairs" or "Seller prefers as-is sale."

As for selling it "as-is" vs. doing repairs....not having seen your home personally it is difficult to give you the best and most relevant advice. I will say that having sold many older homes myself, and being very familiar with Arden Park (I work in the Sierra Oaks Lyon office), you may want to prepare your home with some minor cosmetic touches here and there, rearrange the furniture (stage the home), or move some personal items to the garage, but asking to sell your home "as-is" should not be a deal breaker for most Arden Park buyers. That is obviously a broad generalization. Depending on the size and actual condition of your home, as you stated it is not uncommon for Arden Park buyers to buy a home on a large lot, tear most or all of it down and rebuild with new. My personal opinion is that you will have a larger [better] market for buyers in Arden Park selling a home that is ready to be rebuilt as opposed to one that is turnkey...buyers in that area want to be able to make their own improvements to suit their own personal taste.

My feeling is that your home is worth what it is worth, and selling as-is should not adversly affect your price. What will affect your bottom line is if you do extensive repairs prior to the sale...some repairs have a higher return than others. Your home is probably best left as a blank canvas for someone elses renovation.

Good luck to you in the sale of your home!

Erin
0 votes Thank Flag Link Thu Sep 25, 2008
Erin Stumpf, Real Estate Pro in Sacramento, CA
MVP'08
Contact
You should contact a local Realtor for their guidence. Your agent will be able to adjust your 'as-is' price. Don't be surpised if an offer price does not match your asking price. Here we are required to disclose known defects. How do you know you have lead based paint? Are you qualified to make that judgement? Hire a good agent and let them guide you.
Good Luck
0 votes Thank Flag Link Wed Sep 24, 2008
I wouldn't worry too much about selling "as is." That's because it's already contained in the California purchase contract put out by CAR. Paragraph 7 says the home is sold "as is." If you advertise "as is," buyers think it's a fixer or worse, that you aren't flexible.

Selling without the "as is" clause in the listing doesn't mean diddly squat. On top of that, sellers are under no obligation to perform any suggested repairs found in the buyer's home inspection.

What you should be concerned about is hiring an experienced real estate agent who can negotiate the disclosure waters for you. Disclosure is your primary concern. There are ways to disclose that are explanatory without opening yourself to a potential lawsuit and without making it sound like the home is falling apart.

My own home is 60 years old. I'm confident there are defects, but when the time comes to sell, I will disclose what I know to be a fact. Buyers don't worry too much about what sellers tell them. What they worry about are the things the sellers don't tell them.

You most likely don't have a problem. Lead-based paint isn't a problem as long as it's disclosed, and any home built after 1978 could contain lead-based paint. I disclose lead-based paint even on homes built after 1978 because you can still buy lead-based paint in Nevada. How do you know where your paint originated.

Proper marketing, extensive advertising -- especially online, and diligent disclosures should ensure an easy and uncomplicated sale for you.
0 votes Thank Flag Link Wed Sep 24, 2008
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