Jenn, Home Buyer in Squirrel Hill North,...

What are the advantages and disadvantages of selling a home "as is" rather than live in the mess of upgrades only to sell it?

Asked by Jenn, Squirrel Hill North, Pittsburgh, PA Thu Apr 12, 2012

Our home could benefit from kitchen and bath remodel, plaster work and painting. We do not want to live in the mess of that work only to turn around and sell it. I was hoping to sell it as is but would that leave us with a much lower offer if we do not do these things to the house before selling it?

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Answers

18
Diane Beck, Other Pro, Allison Park, PA
Fri Apr 13, 2012
Hi Jenn,

As a home stager, I have heard this exact statement from homeowners many times. The bottom line is today's buyers are looking online first. If photos and description show "as is" buyers will pass and move on to another listing. Consequently, this will lead to a longer time on the market and a lower selling price.

You do not state how extensive you think the remodeling will be except for the reference to "living in the mess of it all." There are many options to upgrading that can be minimally invasive. I'm not suggesting to cover up problem areas just that there may be some alternative ways to make it more enticing to buyers that won't be as much of an inconvenience to you.

As Jeffrey Bennett mentioned, without repairs you are sending a signal that the home has not been well maintained and has underlying issues. Another reason it may take longer to sell and at a lower price. This just reiterates the many positives of suffering through home improvements in order to sell your home for what it's worth.

There are many statistics supporting the benefits of making improvements before your house goes on the market. Here is a link for your reference: http://www.stagedhomes.com/mediacenter/stagingstatistics.php

Ultimately you will have to decide whether or not to take advantage of upgrading your house and whether or not it is worth it to live with the inconvenience of remodeling in order to sell your home. I encourage you to consider the benefits of tackling some of those messy projects prior to listing.

Whatever you decide I wish you luck in the sale of your home.
1 vote
Jenn, Feel free to contact me. I would be delighted to help you with a game plan for updated your home for the sale. My contact information is on my website. http://www.dbvibrantinteriors.com
Flag Thu Apr 19, 2012
Thank you Diane! I am becoming more convinced of undergoing the remodeling process prior to selling. We now need to research what to do and how to do it... it seems so daunting! I will look at the reference site you attached for some suggestions. Thanks again!
Flag Fri Apr 13, 2012
Tammy Sorco, Agent, Pittsburgh, PA
Wed Feb 6, 2013
When you are listing your home AS IS, you are limiting your market. It is intimidating to many buyers and they think the worst, before even viewing the home. You should adjust the price to make it the best value on the market and the buyers will realize that improvements can be made after the purchase to update the kitchen and other areas of the home. This will not get the highest price for you but it will allow you to move forward on another home on the market. I have many clients that ask to look at homes that may be dated but in the location that would meet their criteria and would be affordable to purchase and they can update as it is in their budget.
0 votes
James Vandeck, Agent, Pittsburgh, PA
Fri Jul 6, 2012
I really do not like "as is" listings. Why not just set the price according to maket valus of the house in its existing condition. Get a realtor to view your home and prepare a market analysis. If he/she finds areas that may obviously need repair (eg exposed wires, hole in the roof, etc) then you need repairs.
You might even want to consider getting a home inspection before you list the property. Costs vary..Should not cost more than approximately $300....
And yes, you will get a lower offer. But, if you remodel kitchens and bath and floors, you wil RARELY recover your costs......

Talk to a realtor. Maybe interview a couple of realtors........
0 votes
The Skender…, Other Pro, Pittsburgh, PA
Fri Jul 6, 2012
The typical "As Is" Addendum to the agreement of sale is used with properties purchased site unseen. It is saying that the person that owns the property has never occupied the property and does not have knowledge of any potential problems it may have. This is used often with out-of-state owners such as banks, corporations, etc. This addendum would have no use to you as you obviously occupied the property and are legally obligated to report and material defects that you are aware of.

You can most definitely, and should leave the house in its present condition and list it at a price that reflects that condition. I would never recommend doing either of these renovations only to turn around and sell. There are a multitude of problems that could arise with this and there is a good chance that you will end up spending much more than you anticipated or wanted.

The only consideration would be if in its present condition, it is conventionally financeable or do you need to sell to a cash buyer? That means, will a bank give a retail buyer a loan on this property without any work having to be completed. If either the kitchen or bathroom are not useable, then you might run into a problem. Some loose examples would be out or code or missing electrical or plumbing.

I do not know your particulars but whether you want to list it or sell to a cash buyer then let me know as I am a licensed REALTOR and owner of an investment company and I can buy it from you. You can either email or call me at 412-254-4234 or jskender@skenderhomesgroup.com.
0 votes
Roland Vinya…, Agent, Sprakers, NY
Fri May 4, 2012
Real estate practice varies by area. I have never written a contract (30+ years, full time) or even seen one that was not "as is". Here, it is a standard seller's protection against fraudulent claims. We do use the State-required disclosure forms, which is a protection for both parties.

A lesson from the agents who responded below is apparent. It will not help you now, but may help others. 1) Do your remodeling when you move in or during the period of your residency, then 2) take excellent care of things. That way, the cost is spread out and you get to use and enjoy the job. I have always been amused by buyers who insist their new home must be perfect, although the one they live in is far from that and the new one won't be perfect for long. And I also acknowledge that the 100% home always commands a premium.
0 votes
Benny Smith, Agent, Pittsburgh, PA
Fri May 4, 2012
Yes, in answer to your question. An offer and more importantly an appraisal will be lower for a home with an outdated kitchen. Keep in mind that the majority of kitchen overhauls cost more than the seller gets back out. The time to put in a new kitchen is when you move in so you can enjoy it and sell your home faster at the end. That is the other big reason to do the work and put up with the mess. Your home will sell faster because more buyers are looking for updated kitchens.
I recommend inviting a couple of Realtor's that have done renovations, such as myself, to look at your home and recommend any improvements that will get you a positive return. Paint is one ot those items that can pay you back more than you pay out. Best of Luck Benny Smith 412-498-7868
0 votes
Virginia Stu…, Agent, Irwin, PA
Thu May 3, 2012
Selling "as is" might not be 100% insurance against the buyer suing after the sale. In PA, home sellers must give a seller's disclosure and lead-paint disclosure, with or without having a Realtor. If the seller intentionally withholds information on the disclosure, it could lead to problems.
0 votes
Bill, Home Seller, Arizona
Thu May 3, 2012
I have thought that "as is" - is a protection against fraudulent claims made after a sale - you inspect house - and that is the deal - for instance - my place in 15221 down about 15 minutes from VA Medical Center - priced so cheap - how can anyone not expect a minor thing may turn up I have it priced at $15,000 - 15 mins. from Squirrel hill is 1,200 sq. ft. all brick built 1950 - now if the place was in Squirrel Hill asking $80,000 would be different My place is a functioning building with new electric water heater e mail is fiftiesnavy@aol.com phone 928 7041541 - i am out of state - reason for sale.
0 votes
James Vandeck, Agent, Pittsburgh, PA
Thu Apr 19, 2012
I really think that "as is" selling is overratted and overused. What is does is reduce your exposure as many buyers wil ignore the as is listing... I say, "save your money." Just reduce the price accordingly....Leave "as is" homes to the REOS and the investors......
0 votes
Ken.george, Home Buyer, Pittsburgh, PA
Tue Apr 17, 2012
The best tip in my mind is use an investor like myself or others. We do all the work. Yes the price is a bit less, but it is based off the value of the house minus the repairs. So its not like people say, it depends on property value, costs for repairs and holding costs. There is a bunch of reasons to try to retail, and there is a bunch not to. You have to see what fits you best. For a true walk away, just give us a call and we will take care of everything.
0 votes
Michelle Wil…, , Pittsburgh, PA
Fri Apr 13, 2012
You may want to consider purchasing some sort of home warrenty if you sell as is. Depending on the company you choose the options may vary. You would want to look at a plan that cover both you and the buyer for the their first year. Please feel free to contact me if you have any questions; michellewilliams@prudentialpreferred.com
0 votes
Jeffrey Benn…, Agent, Pittsburgh, PA
Thu Apr 12, 2012
On thing to keep in mind is that REO foreclosures tend to have legal addendums that buyers are required to sign (e.g., sellers will make no repairs, utilities are off and will not be turned on). Otherwise, if this is just a "normal" listed home, "as is" has no special legal significance.

What it does is signal to agents (and buyers) that the home is probably in poor condition, or at least there are significant defects the seller does not intend to address. I advise "normal" sellers not to say this. Effectively they're unilaterally starting the negotiation before there's an offer, and scaring away buyers for no good reason.

It's an ambiguous signal at best. Maybe it means the seller is an old curmudgeon who won't budge an inch on anything. That is one possible interpretation. Or maybe it just means the seller has already moved out of state and can't do repairs -- but would still be amenable to repair credits based on reliable estimates. In that case, how is it different from any other house?

Any significant condition issues should be on the disclosure. I put that online, and buyers should ideally review that before making an appointment. If the seller is in the middle of working on something or has definite plans to address something on the disclosure proactively, I would tell agents that when they call for appointments.

Sellers shouldn't be making repairs anyway, if they don't want a judge deciding whether their repairs were made in a "workmanlike manner" as required by the contract. The safest thing for all parties is to get estimates and either give buyers a credit (lender/seller assist-permitting), or have title cut a check directly to the contractor. Then the buyers handle it after closing and there is no liability. Alternatively, if the buyers *really* don't want to do work, have the work done *during* the inspection period (extending it if necessary), and let the buyers reinspect before their final reply.

For buyers, I say just ignore any "as is" claims. Sellers may truly believe at listing time that something isn't negotiable, but may well change their minds as soon as there's a concrete offer on the table. There is nothing stopping buyers from asking for credits anyway, and nothing stopping sellers from offering them.
0 votes
Thank you so much for your detailed reply. In general, the house is sound and the area of Squirrel Hill we live in is quite desireable.

We have had a lot of work already done but it has been structural in nature (new roof, gutters, windows, foundation work, new main drain as roots broke the other one). The cosmetic work has been put on the back burner due to the expense of the other stuff so the kitchen and bath are a bit dated and in need of repairs (especially the kitchen - new tile floor needed, new dishwasher - we cannot get the old one out without ripping up the floor, appliances are over 10 yrs old, counters and counter top need work).

I would love a buyer to be ok with doing their own renovations, upgrades and NOT want the selling price drastically reduced.

For our comfort, we would have to leave the house during major upgrades and the expense would be huge to redo both a kitchen and bath!

What are your thoughts on this now that there are more details for you?
Thanks!
Flag Thu Apr 12, 2012
Jessica V. R…, Agent, Pittsburgh, PA
Thu Apr 12, 2012
Kitchen and Bathroom remodeling is a huge undertaking. And it is undertandable that you would not want to live around paint cans plaster, and tarps for the time it would take to renovate both. The other thing to condsider is if you do renovate..you may not re-coop your all of what you have spent into a kitchen and bathroom renovation. Some think that it can add to the value which it does but you may not get back 100% of what you spent in the renovation. In this area its about 40-50% depending on howmuch you spend and what area of the house you renovate.

As far as selling as is. There are buyers out there that are looking to have a clean slate to make the house there own. However some mortgages such as FHA would require some things such as peeling paint to be addressed and you as the seller would not have to do that you could stipulate that the buyer address that as well.

If you have any other questions feel free to call me my cell phone is 412-626-2334
0 votes
wow! 4- 50 percent return is not that favorable for all the effort on the sellers part!
Flag Thu Apr 12, 2012
James Vandeck, Agent, Pittsburgh, PA
Thu Apr 12, 2012
I havn't done the research but I would bet that a home would sell for less if it's advertised "As is."
I do know that homes advertised "as is" will get less exposure in the market place. In otherwords, many buyers will not look at home listings that are advertised "as is."
0 votes
Benny Smith, Agent, Pittsburgh, PA
Thu Apr 12, 2012
Simply put the advantage is less outlay of cash and reduced risk of putting more money in than you get out. The downside is you may be giving money away. Each case is different and deciding to sell as is or fix and then sell depends on the bottom line after all the costs are included along with a good margin for error on both routes
0 votes
sounds complicated and the fact that it could go either way, I am not inclined to live in renovation hell just to sell! UGH!
Flag Thu Apr 12, 2012
Virginia Stu…, Agent, Irwin, PA
Thu Apr 12, 2012
You will probably get less money for a home sold "as is" because the buyer takes a risk. Keep in mind that a dated home is not necessary the same thing as an "as is" home. Better to do some minor spruce up (cleaning/paint) and offer a home warranty for $400-$450. In the ad, you might even offer money back to the buyer for updates, such as $1000 for a carpet allowance. Good luck!
0 votes
makes good sense! Our kitchen has some issues where to fix one thing means to totally rip out another which then means another area will need repair and so on... so that is why we are so conflicted! we cannot do minor spruce up stuff in that area!
Flag Thu Apr 12, 2012
Christa Jime…, , Pennsylvania
Thu Apr 12, 2012
Hello, I would calculate the the amount that the renovations would costs compared to how much more you would get once the renovations have been made. Of course, any good remodeling job will add value to a property. The type of work that you mentioned sounds like this would benefit the sale of your property. I suggest that you get the work done.
0 votes
Victoria Kle…, , Pittsburgh, PA
Thu Apr 12, 2012
Despite all of the information out there these days for a buyer to become educated with, many are still "wowed" by updates. The initial viewing will tell if the buyer has future interest, and it is sometimes hard for buyers, no matter how savvy they may be, to look beyond dated kitchens and bathrooms. Can you take a middle ground and do some updates vs a complete redo? Painting is a short term "mess" vs new countertops, tile, etc. New hardware and inexpensive lighting updates to be had at many home improvement stores for your bathroom and kitchen and are a simple weekend project. Uncluttering and fresh paint make such a big difference! The other thing to look at is who is your competition? If you are truly in Squirrel Hill and your home is solid, you are in a demand area vs an area saturated with competition. If someone wants your area and you don't have many competing homes, then I would say you need to do less. Feel free to contact me off line if I can be of further assistance: vkleber@northwood.com
0 votes
This seems to be true. I know I get wowed by nicely staged homes, even though I know what I am looking at. Minor repairs to plaster, fresh paint, and declutterring sound wise. I am just not interested in the huge mess that bath and kitchen remodels bring. Thanks!
Flag Thu Apr 12, 2012
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