What is the Meaning of an As Is Home Sale?
Selling a home “as is” means that the seller is averting any responsibility for repairs that may need to be done to the property. The seller is also not providing any warranties for the condition of the property.
Why would someone want to sell their property as is?
If someone does not have the time, headspace or resources to invest in home repairs, they will often opt for an as-is sale. They are willing to settle on a lower price because they’re saving money, time and headache by not doing any repairs.
“As is” denotes that the seller is selling, and the buyer is buying an item in whatever condition it presently exists, and that the buyer is accepting the item “with all faults”, whether or not immediately apparent.
Why would someone want to buy a property as is?
Why, indeed!
Well, for starters, someone who works in the contractor industry or has a friend or family member in the business who may give him a better price may find an as-is house attractive since it’s price will likely be more affordable.
Believe it or not, some people actually enjoy renovating their own home. They want to choose their own tiling, flooring, kitchen, doors etc. These people won’t mind buying an as-is property at a lower price and then investing their own money into the renovations, according to their preferences.
But then there’s another category of buyers who are attracted to as-is properties. And that is: home investors. These people not only don’t mind as-is properties. They actually look out for them and pursue them. Home investors, or cash home buyers, will buy dilapidated homes, and do the repairs and renovations themselves using contractors on their team who give them good prices due to work volume. Then, they can sell the redone house at a profit.
Many advise that conducting an inspection is a must when considering an as-is home. Realtor.com, for instance says, “Since these sales can be bargains, they are worth considering, although there’s one precaution buyers will definitely want to take prior to the sale: a home inspection.”
However, not always will cash buyers do an inspection. And when they do, it’s just so they get a clear picture of what the issues are and the estimated cost of repair and it’s not a determining factor that will make/break a deal. (Unless, of course the inspection reveals a vast amount of issues which make the COR prohibitive and not worthwhile for the investor.)
Furthermore, the term as-is takes on new meaning with cash home buyers.
Traditionally, as we established earlier, as-is means the seller makes no commitment for repairs and will sell the house in the exact condition it currently is.
With cash buyers, as-is also means the house does not have to be clean, orderly, or presentable. In fact, it can be a downright holy wreck.
From our own personal experience at Heyday, we can tell you:
If a house is piled with stacks of magazines amassed by a paper hoarder – no problem!
If the walls are covered with murals by an aspiring toddler artist – wonderful!
If dishes are stacked in the sink until just below the ceiling – we may not wash them for you, but we couldn’t care less about it!
If the floor is littered with junk, debris, and whatnot – we don’t mind one bit!
If every surface is covered with possessions of a deceased resident – doesn’t faze us!
That’s because an investor knows how to eye a property with the potential in mind, not the way it looks in the moment. Their brain literally erases the mess and instead, they picture how it will look after their talented contractors will touch it with their magic wand.
When you sell as is to a cash buyer, you save yourself the stress of not only repairs, but also of cleaning.
To a cash buyer, as is means: don’t lift a hammer, screwdriver, mop, or broom!
Brought to you by Steven Honig, Real Estate Investor & Consultant