For homebuyers, "as is" properties can be one of two things: a deal breaker or an opportunity. When sellers list their properties on the market as is, they may not handle repairs or home improvements before the sale. Instead, the buyers typically cover these costs.
Buyers looking for a move-in ready home may be put off by the work involved in these fixer-uppers. Others delight in restoring disheveled properties, as they offer a blank slate for buyers to build their dream homes. Some homebuyers even make a side business of buying and flipping these kinds of properties.
Why are homes sold as is?
Many sellers prefer to polish up their properties, making them as move-in ready as possible. They might update kitchen appliances, apply a fresh coat of paint or even hire a stager to polish their furnishings for open houses.
Other sellers are not as fortunate. Perhaps they do not have the funds to update the property, leaving them with no choice but to sell the house in its present condition. As-is homes may be at the lowest possible cost. As-is sellers may be selling their homes at the lowest possible cost in instances of short sale or foreclosure. Some homeowners pass away, leaving their properties behind for their heirs, who want to sell the houses quickly.
Who should buy as-is properties?
For buyers looking for move-in ready homes, as-is listings can seem daunting. These fixer-uppers are not meant for everybody. When purchasing an as-is home, buyers face risks such as uneven foundations or plumbing malfunctions, which may be expensive to repair or replace.
Generally, the primary benefit of buying an as is property is its price. Sellers typically list these homes at low price points initially and might accept even lower offers if they are desperate to sell.
Exemplary as-is buyers are handy and willing to fix up properties to their liking. If they aren't skilled craftspeople, they might have an eye for design and the funds to hire contractors to build their vision.
Depending on the amount of work required on the property, as-is buyers may need to relocate for a period of time. If home repairs require new roofing, flooring or altering the foundation, the buyers may want to find accommodations with nearby family or at a hotel. Ideal as-is homebuyers may have no intentions of living in their purchased properties and instead plan on flipping homes to sell for a profit.
What are some tips for as-is homebuyers?
For buyers ready to take on a challenge, as-is properties can be rewarding investments. When making an offer on an as-is home, buyers should understand the risks and strategically plan how they are going to renovate and repair the dwelling. Drafting and maintaining a budget can prevent these investments from becoming money pits.
Buyers should plan a home inspection to get a professional opinion on its condition. This process occurs after buyers make an accepted offer. According to Bankrate, most states have mandated that home sellers inform buyers of what they know about the home's conditions. Banks selling foreclosed properties are not required to follow these disclosure laws, as they never resided in the home and do not have information regarding what shape the property is in.
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