We have been in a seller led real estate market for several years. Since roughly 2013, Buyers have been at the mercy of low inventory rates, and (forgive me for saying so) spoiled sellers who are seeming to do less and less to prepare their homes for sale. The reasoning for this has been simple: Sellers have not needed to do much to compete. Inventory rates have been so low that even homes that have required some cosmetic or functional love have sold-if the price is right. The price being reflective of the condition of the home, of course.
I get it, selling “as is” is quick, initially painless for the seller, and at the end of the day, if the price reflects the condition, the house will sell. It’s worked for years, and will continue to work as long as the price point reflects the condition, AND as long as the market favors the seller.
But what happens psychologically when a Buyer’s Agent shows a home to a Buyer, that is marketed “as is”? As an Agent that has shown homes going on 8 years, here are some impressions that I have gathered from buyers that have condition/cosmetic issues that the sellers are unwilling to fix.
- Buyers almost never understand that the house is priced for the “as is” condition. Investors understand this, but the layperson does not. Because of this disconnect, best case scenario, a buyer will start thinking about how much they would reduce their offer to account for the condition/cosmetic issues; worst case scenario, the buyer will move on and find a house that is move in ready, even if they have to pay more.
- Buyers will often attribute a much greater dollar amount than is realistic to issues that need to be fixed or updated. For instance, I recently had a buyer attribute $4000 to an interior paint job that could have been completed for closer to $1500. Even with the aid of a great Realtor, this psychological barrier can be tough to break through.
- Houses with “as is” verbiage used in the marketing language automatically place themselves in the “bargain basement” category. These attract investors, who will often lowball offers so that they can maximize THEIR profit on YOUR house.
- Houses sold “as is” may not qualify for FHA or first time home buyer financing, ruling out a mass of buyers and limiting to conventional and cash buyers…AKA investors who are looking to maximize THEIR profit on YOUR house.
In short, listing “as is” is a somewhat lazy strategy that is not usually in the best interest of the home seller.
The Real Estate Market is shifting, it will not always be a sellers market, and that change can happen at any time and without warning. THE BAUM FLIP is a forward thinking solution, helpful to both sellers and home buyers that are looking for QUALITY homes to move into.
Founder of The Baum Group