“As-Is”. Are those words the kiss of death for a Seller?
“As-Is” - Are Those Words the Kiss of Death For a Seller in midtown Tulsa real estate? In speaking with midtown Tulsa home sellers, I cover the bases that are so eloquently laid out by a colleague in Philadelphia. Some serious thought needs to be put into whether or not you, as a home seller, wish to go the route of "as-is". Take a few minutes to read through this post to learn a little more about the "Buyers" perspective when it comes to selling your home "as-is" and what some of your options may be.
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.
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