How Much Do You Lose Selling a House As-Is?

✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.

Preparing a home for sale costs both time and money. Home sellers from Seattle to Miami spent $14,163 on upgrades and repairs before listing their properties. And an average seller spends 2 weeks to a month making home improvements prior to listing.

To skip these repairs and save time, sellers list their homes as is. But, it has a major disadvantage: you lose money. How much do you lose selling a house as is? There’s no fixed answer to this question.

The amount of money you lose in an as-is home sale depends on several factors. These include property condition, the local housing market, the type of buyer who purchases your home, etc.

🚀 4 Power Tips to Sell a House “As Is”

Don’t Accept Low Ball Offers: Most buyers of “as is” homes will only offer you 30% to 70% of the market value of your property. Do not settle for such a lowball offer, it’ll cost you thousands.
Don’t Expect iBuyers to Make Strong Offers: iBuyers have either shut down or have suffered massive losses. Our analysis suggests that iBuyers will offer much less than Fair Market Value (FMV) for your home in 2023 and 2024.
Don’t Market to Only a Single Buyer: Marketing to just one buyer, like Opendoor or We Buy Houses, means there is little to no competition for your property. No competition means lowball offers.
List on a Cash Marketplace: Cash marketplaces like Houzeo.com and Sundae are the best options to get multiple cash offers for your property. HomeVestors and We Buy Houses are also good options.

» List “As Is” with Houzeo.com: Get Maximum Cash Offers for Your Home.

What Does it Mean to Sell a House As Is?

Selling a house “as is” means putting it up for sale in its existing condition without any upgrades or improvements. As an “as-is” home seller you won’t make any repairs. You won’t fix any issues even if they are found in the home inspection report.

Say, the home inspector finds a defect that would cost $3,000 to fix. In a regular transaction, the seller fixes the issue or adjusts the final sale price by $3,000. But as an as-is home seller, you won’t make any repairs. The buyer has to accept the property as it is.

What Selling As Is Does Not Mean?

Selling as is does not mean you simply list your house, sell it, and walk away with a profit. As a seller, you must be transparent about the property’s condition. You must disclose every material fact that affects your home value in the seller’s disclosure.

Will I Lose Money if I Sell My House As Is?

You will not make as much profit selling as-is as you would in a traditional sale. Sellers surely save some money by skipping repairs and listing their homes as is. However, they have to settle for lowball cash offers.

How much you lose selling your house as is will depend on the location and condition of your property and the type of cash buyer you attract.

Get multiple cash offers from different types of cash buyers to avoid getting lowballed. List your home on cash marketplaces like Houzeo and Sundae Real Estate.

Unlike other cash marketplaces, Houzeo will list your home on the MLS. This will help you attract all types of buyers and help you create a bidding war for your as-is home. Also, your as-is home listing will be syndicated to 100+ real estate websites.

How Much Do You Lose Selling a House As Is?

There’s no exact way to estimate how much you will lose by selling a house as is. The amount of money you lose will depend on your property’s condition.

If your property is in good condition, you can attract offers a few thousand dollars below the Fair Market Value. However, for a property that requires major repairs, the offer price can be tens of thousands of dollars lower.

As is home buyers typically include investors and companies that buy houses for cash that make lowball offers. They account for home repair costs before making an offer. For instance, an institutional home flipper won’t pay more than 70% of the property’s After Repair Value (ARV).

Let’s try to understand this with an example.

As-is Home Sale Example

Say, a real estate agent determines your home sale value to be $300,000. But, your home’s electrical and HVAC systems require repairs worth $25,000. A real estate investor gets your property inspected, estimates the repair costs, and makes an offer of $255,000.

Here, you would save $25,000 in repairs, but your home will sell for $45,000 less. This means you will lose $20,000 by selling your home as is.

How Much Do You Lose When You Sell Your House for Cash?

The amount of money you lose selling your home for cash depends on the type of cash buyers you attract. An iBuyer can offer up to 70% of the Fair Market Value. Whereas listing your home on cash marketplaces will fetch you offers as high as 100%.

Here’s how much different types of cash buyers are offering in 2023’s down market:

Institutional Cashbuyers: They include flippers, investors, and We Buy Houses For Cash Companies. Depending on the condition of your property, institutional cash buyers can offer 30% to 50% of the Fair Market Value.
iBuyers: These home-buying companies use proprietary algorithms and determine how much to offer for your house. In 2023, iBuyer companies will offer 60% to 70% of the fair market value.
Cash Marketplaces: All types of cash buyers make offers on properties listed on cash marketplaces. This helps sellers attract, review, and compare multiple cash offers in one go. You can attract offers as high as 100% of the Fair Market Value by creating a bidding war among buyers.

» Highest & Best Offer: Discover the Best Strategy to Handle Multiple Offers.

Factors that Affect an As-Is Home Sale

The following factors will determine how much you will lose selling your house as-is:

Condition of Your House: As seen in the above example, the condition of your home directly impacts the sale price. If your home requires expensive repairs it might sell much below the Fair Market Value. If your home is in good condition, you might sell closer to the Fair Market Value.
Type of Buyer: You will most likely sell to cash home buyers. “We Buy Houses for Cash” companies usually offer 30% to 50% of Fair Market Value. iBuyers on the other hand, make cash offers of up to 70%. Institutional home flippers typically offer not more than 70% of the property’s ARV.
Local Housing Market Conditions: You can get better offers and sell your home fast if you live in a hot seller’s market. In such markets, there are more buyers and lesser homes for sale. Check out our detailed guide on the best time to sell a house and determine when to sell an as-is home.

Pros and Cons of Selling As Is

We do not recommend selling your house as is because “fixer-upper homes” sell for 45% less than turnkey homes. However, if you have no other option, weigh the pros and cons of selling a house as is beforehand.

Pros of Selling As Is

No Haggling Over Repairs: Water-damaged kitchen countertops, dripping faucets, or broken roofs – repairs are not your concern. The flipper or investor buying your house as-is will take care of such repairs.
No Inspection Contingency: On average, home sellers shell out $14,000 in seller concessions related to home inspection. In an as-is sale, you can pre-set a discount and tell buyers you are unwilling to negotiate further.
Hit the Market Quickly & Close the Sale Fast: Since you save time in repairs, you can list your property directly for sale. You can close the sale relatively sooner if you find a buyer who has a mortgage preapproved for distressed properties.

» Get Listed in 24 Hours: Houzeo’s Rush Listing will get you on the MLS in one business day.

Cons of Selling As Is

You Will Get Less than the Fair Market Value: As stated earlier, you will most likely sell your house to a cash buyer. Cash home buyers offer only 50% to 70% (or even less) of the fair market value.
Buyers May Make Negative Assumptions About Your Property: Buyers assume your property has some serious defects, which may not necessarily be true. This negatively affects the offers your house attracts.
Buyers May Face Challenges in Securing Mortgages: Mortgage lenders typically do not finance properties with structural or safety issues. FHA loans, VA loans, and many conventional mortgages usually do not allow financing for fixer-uppers.

💡 Fact: The FHA 203(k) loan enables home buyers to finance homes that need repair. Buyers are approved to make only specific types of improvements with an FHA 203(k) loan.

Is it Worth Selling Your House As Is?

You can save a few thousand dollars by selling a house as is, but we do not recommend it. Because most home sellers have to settle for discounted offers from cash buyers. But, if you have made up your mind about selling as is, list it on the Houzeo cash marketplace.

Major cash buyers, including Opendoor and Homevestors, have submitted offers on Houzeo properties. Houzeo will also get you listed on the MLS which will give your as-is home maximum exposure. Here’s how to list a property on MLS with Houzeo cash marketplace.

» Should I Sell My House Now? : Explore if you should sell now or wait for a year.

Eager to Know How Houzeo Works?

We’ve got you covered. Check out the following video to understand how Houzeo works and why it is one of the best For Sale By Owner websites in the U.S.

What is Houzeo?

An overview of what the platform is all about

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» NEED MORE CLARITY? Read these exclusive Houzeo reviews and learn why the platform is the best in America’s competitive housing market.

FAQs

1. Should I fix up my house or sell it as is?

It depends on the local housing market condition. In a hot seller's market, you can sell your home as is close to the Fair Market Value. However, in a cold market with home fewer buyers, your as-is home will attract offers much lower than the market value. Under both circumstances, as-is homes sell at prices lower than the Fair Market Value. You will have to make repairs to sell at a higher price. Here's what to fix when selling your house.

2. Why should I sell a house as-is?

Homeowners under the following situations sell homes as is:

1. They cannot afford to make repairs
2. They want to relocate asap
3. They are in a financially tough time
4. They want to avoid the stress of selling an inherited house

Here are more reasons why houses are sold as is.

3. Can you sell a house as is without inspection?

In an as-is home sale, you are under no obligation to make repairs. However, this doesn't stop buyers from inspecting the property. You are not required to make repairs or offer any credit if any issues are found in the home inspection report.

4. How does selling a house as is work?

5. Is it bad to sell a house as is?

We do not recommend selling your house as-is unless you are going through a financially tough time. Typically, real estate investors and cash buyers purchase as-is homes. They make lowball offers which can be as low as 30% of the property's Fair Market Value. So, you might leave a serious amount of money on the table. Weigh the pros and cons of selling a house as is before listing.