Are you considering selling your home “as-is” without the help of a real estate professional? This is known as “For Sale By Owner” or FSBO.
Many homeowners consider this route, especially if their home needs repair. However, it’s not for everyone, so in this article, you’ll learn how to sell a house as-is by owner and you can see if it’s right for you!
5 Steps: How To Sell A House As-Is, By Owner
If you want to know how to sell as house “as-is” by owner, you are part of a growing trend of homeowners who want to take matters into their own hands and save on commission fees. Many people think realtors are overpaid and want to avoid paying those commissions… at any price.
However, beware! One of the great things realtors offer is a broad market exposure, so you have many buyers looking at your property and bidding up the price. They can also help with the paperwork so you don’t have ongoing liability. If you feel your house does not need fancy marketing, talk to your real estate agent to see if they would consider reducing or discounting their fee to make the deal a win-win for both of you. The truth is many FSBO sellers try it themselves and turn to a realtor after about 60 days on the market without desired results. It’s frustrating, so don’t let that happen to you!
The good thing is that here in Seattle, WA, it seems like we are in a perpetual seller’s market. As long as you don’t overprice your home, you should be able to get it sold. The biggest question in my mind is will you get it sold for the biggest profits possible? Read on to discover what else you need to be aware of!
Yes! You Can Sell For Sale By Owner!
Selling a house “as is” by owner may seem daunting, but with proper knowledge, it can be an achievable and rewarding process if you are willing to put in the time and effort.
In this blog post, we’ll discuss how to tackle this undertaking easily and effectively in order to maximize profits while decreasing stress levels.
- Figure out what work needs to be done and how much it will cost
- Set a price that takes the work into account
- Market the house to “as-is” house buyers – mostly investors
- Negotiate with buyers who are interested in the property
- Finalize the sale once an agreement has been reached
Selling Your House “As Is”: What You Need To Know
Are you considering selling your home “as is”? This can be a great way to sell your house quickly without having to invest in costly repairs. However, it’s important to understand the process and how it works before trying to do it on your own. In this blog post, we’ll cover the basics of selling a home “as is” by owner and provide some tips for making sure the process goes as smoothly as possible.
1) Learn How To Convey Real Estate Legally In Washington State
The first step in selling your house “as is” is understanding what regulations you need to follow in order to legally sell a property in this condition. Washington State has certain legal requirements, such as filling out a Form 17 Seller’s Disclosure, a six page legal document in which you declare everything that is wrong with the house. You may have ongoing liability that survives the closing if you fail to disclose known defects, so don’t fudge the details on this, or it may come back to bite you in the form of a lawsuit. However, there may be exceptions, such as in the case of an estate sale where you have not lived in the property.
It’s important that you research the laws applicable in your area before attempting to close the deal on your own. It’s usually best to consult an experienced real estate attorney if you’re unsure about any of these regulations.
2) Find The Right Buyer
Once you know which local laws apply to your home sale, it’s time to start looking for potential buyers who are interested in buying a fixer-upper. Most people who want to sell a home “as-is” apply that label because they don’t want to do any repairs.
If you are selling a home as is by owner because it needs work, such as after a divorce, in the case of an estate sale or probate after a death in the family; downsizing into assisted living, or even helping out a hoarder, this may be the right strategy for you. Perhaps none of these apply, but you’ve just lived in the house for decades, gotten behind on maintenance, and found it needs some work. No worries, that’s the best time for an as-is sale.
Seller Beware: Investors Don’t Pay Full Price
You may not get top dollar for your house selling “as is,” but finding the right buyer who understands that they’re getting a discounted price due to the need to invest in repairs can help make up for some of those losses.
Ask friends, family members, and acquaintances if they know anyone who might be interested in purchasing a property in its current condition. You may even want to consider posting ads online or hiring a realtor who specializes in “as is” sales. That is something we can help you with if you like.
3) Evaluate The Numbers: Sell As-Is vs. Sell Fixed Up?
Before you say, “I’m selling my house as is and that’s that!” consider your other options and whether they’d be more profitable.
As a “hybrid” real estate agent and investor, I can talk you through your options, run numbers, and offer you an as-is cash purchase of your home, just like other “We Buy Houses” investors would… but I can also tell you the level of work your home would need to get it on the market, and what it might sell for if it was all fixed up. If you’d prefer to go that route, our contractor will finance the repairs for you, and you pay nothing until the home sales.
For many people, this is a great way to get more money out of the property. If the home is looking good, it will have more buyers eager to pay full price.
Figure Out What Work Needs To Be Done and How Much It Will Cost
Before putting your home up for sale, it’s important to be aware of home repairs that will need to be done by the guy who buys it. Whether it’s sold to a landlord or fix-and-flip investor, they will need to repair the home to keep it in good condition long term.
Figure out what work needs to be done to fix up your house before selling, and how much it will cost. Think about it: Who are your as-is house buyers? Mostly investors and landlords who will want to make a profit if they by a house that needs some work. Most first-time home owners don’t have extra funds to do extensive repairs. They prefer to buy a house that is fixed-up and smells good. They are not going to buy “as-is” houses.
If you sell the house in as-is condition, the contractor or investor who buys it will have to price out all these repairs and still make a profit.
While every home needs different levels of home repairs, there are a few common ones that can help increase the marketability and price, such as replacing worn out parts, updating surfaces in the bathrooms and kitchen, ensuring proper insulation, and making sure all safety concerns are addressed. Before listing your home, consider what expenses may go into the repair process so you can weigh them against potential profits and price the home low enough to attract an end buyer.
3) Price Your House According To The Amount Of Work That It Needs
One of the most important things about selling your house “as is” by owner is pricing the home appropriately. Many FSBO’s have a tendency to overprice their homes because they don’t have the right market knowledge and may be looking at outdated information. Especially in soft or falling markets, what your neighbor’s home sold for in the spring may not be what your home will sell for today!
Your Home Doesn’t Have To Be Fancy, But You Don’t Want To Overprice It
Even if your home’s not fancy, you can clean it up and get it looking its best before buyers come to take a peek.
This home in Burien had recent comps (from 6 months earlier) for $700K and the owner’s hoped to get that price. It sold for $575K because the market had changed in the time that they had been fixing up their home and preparing for sale.
If you want your property to sell in a reasonable amount of time, it’s important to price it correctly based on today’s market data.
Set A Good Sales Price Based On Today’s Market Data
Be sure that you are setting a price that reflects both market value, and the fact that repairs will likely be needed once the sale closes.
If you don’t price properly, then buyers won’t take you seriously, or may expect more from their purchase than what they ultimately receive.
Do thorough research into comparable houses and their prices before setting your price, so that you have an accurate idea of what people will pay for yours given its condition. Sometimes the time of year can be a factor. Houses usually sell for more in Spring than they do in Winter.
Selling your house “as is” by owner can be a great way to get rid of an old property without investing time or money into costly repairs beforehand. However, pricing correctly and allowing time for your buyer to do a thorough inspection before closing will ensure that buyers understand exactly what they’re getting into when they purchase your home as-is so there are no surprises down the line after closing day arrives! With these tips in mind, now could be just the right time for you to try out this unique approach!
Did You Know That Fixer-Upper Homes Can Still Be Listed On The MLS?
Some people consider the idea to sell “as-is” by owner the only way to go because they don’t think they can sell a fixer upper through a real estate agent. However, an as-is home sale is certainly something a realtor can help you with, too.
Some realtors seem snobby – like they will only list fancy homes that look good on glossy postcards and brochures.
While that may be the case for some agents, I can assure you that’s not how I work. As both a real estate agent and an investor, I’m used to working with property in all conditions. I’ve even had to complete my own as-is home sale before.
Just because the house needs a little (or a lot!) of work, doesn’t mean you should forgo the benefits of listing it on the MLS.
This House Was Missing Its Kitchen
This home needed a lot of work and one of my buyer clients was interested. When we got to the house, she felt it needed more work than she was able to give it.
This House Had “That” Smell
This client was looking to buy a home for his family in Federal Way and found lots of people selling a house as-is, where-is.
Even though these homes both needed work, they were both listed through real estate agent’s MLS service. This allows more people to see and tour the home. You will get lots of contractors through as well as home owners who are willing to take on a “project house.” There are even special loans home buyers can get – called rehab loans – that can make this type of project finacable.
If you sell to an investor, you usually get a fast sale, but a big discount on the price, especially if you only talk to one guy. It’s like that insurance commercial says, “when buyers compete, you win” and that’s the advantage of putting the home on the MLS with a real estate agent.
Before you accept a low ball offer from an unscrupulous as-is home buyer, I want you to be able to say, “Selling my house as-is is not my only option, it’s just one of my options.”
4) Get The Property Under Contract To Sell
Now it’s time for the paperwork.
Getting a property under contract to sell can be a stressful and time-consuming process, but it is also a vital step in the real estate cycle.
To make sure this step of the process is carried out successfully, write up an official purchase contract and make sure to secure any required earnest money. You should expect several thousand dollars at least.
Doing this will ensure that everyone in the deal is both legally and financially secure before they move on to the next steps of the transaction. The title and escrow office will need to see a copy of the purchase and sale contract so they know who pays for what, and how to disburse the funds.
Having proper documentation in place makes it easier for all parties involved to close the deal successfully and with confidence.
5) Close The Deal
A real estate closing comes with the joy of getting the title payment, but it also brings with it the bittersweet feeling of handing over the keys to a new buyer. If your home’s a fixer, though, maybe you’ll be glad to see it go?
At a title company, all parties involved in the transaction meet to finalize and record all documents, ensuring that title shifts properly and payments are fulfilled. You may also be able to do a “remote closing” where the paperwork is signed at home with a notary, and Fed-Exed over to the title office.
Once this process is complete, the title payment can be received and keys handed over, granting ownership of the property to another individual. It is as much a happy moment of transferring title ownership as it is a sad one of saying goodbye to familiar surroundings. Hooray! It’s time to celebrate: You are done with selling a home as is!
Consider Talking To Someone Who Can Give You A Second Opinion
When it comes time to list your house for sale, don’t overlook the potential profit you could make by consulting with a real estate agent first. Not only can they give you their experienced opinion based on market trends and other factors, but they may be able to help you find ways to garner more money than you would by going it alone. Talk to a real estate agent and get a second opinion before you list your house for sale by owner – you’ll be glad you did if it turns out your profit can be boosted beyond what you thought!