With the rise of professional home buyers, the term “as-is” sale is being used more frequently, but not everyone knows what it means. Most houses that are sold the traditional way go through a rigorous inspection process that frustrates many home sellers. In this article, we will explain the 5 benefits of an as-is sale in Raleigh.
What Is An “As-Is” Sale
An ‘as-is’ sale is when a home is sold ‘as it is’ in its present condition. Or more simply, when the seller doesn’t make any repairs after the inspection period. Back in the 2000s, the offer to purchase and contract form used by the Raleigh Association of Realtors has a complicated inspection clause in the agreement referred to as “Option 1.” This clause stipulated many requirements for disclosing and correcting defects in a property uncovered during the inspection period. At that time the most common form of consideration being used was earnest money. The problem was that “Option 1” had many loopholes that allowed a buyer to back out of the agreement and get their earnest money back. In the late 2000s, bank-owned properties (REOs) were hitting the market because of the rising foreclosure rate. All these listings were advertised as being sold as-is, meaning it was declared that the seller will not make any repairs.
1. An As-Is Sale Is More Straightforward
An as-is sale is more straightforward and easy to negotiate. If the buyer and seller agree on the price and agree that the seller will not make repairs, it eliminates the opportunity for a second negotiation. This benefits the seller because it removes opportunities for the buyer to ‘back out’ of the contract with no penalty. This makes the as-is sale more straightforward and easier to conduct when compared with a traditional sale.
As a rule, Wake County Home Buyers always buys houses as-is and we never ask our sellers to make repairs. None! For that matter, any professional home buying company, local or institutional, should be buying their houses as-is.
2. Fewer Escape Clauses
There are many unscrupulous buyers who fire out dozens of offers with the intention of closing on a select few. This is why they fill their purchase agreements with escape clauses. An escape clause is something similar to the following:
This agreement is subject to the approval of partner
This agreement is subject to an inspection not revealing more than X amount of dollars in repairs
An escape clause allows a buyer to lock up a bunch of properties under contract and then cherry-pick the best ones. Best one being the house with the fewest repairs possible that can be bought at the deepest discount possible.
Keep in mind that if you are searching for companies that buy houses for cash in Raleigh and you ask for a ‘sight-unseen’ offer, some inspection clause would be appropriate. But if you are working with a professional home buyer, and they have the opportunity to walk through the property, a formal inspection process should not be necessary.
3. An As-is Sale Avoid Dealing With Contractors
If you sell a house the traditional way then the buyer will send in a professional home inspector. The inspector always returns a laundry list of repairs. In our experience, the older the home, the longer the laundry list is. The buyer then shares the inspection report with the seller along with a Due Diligence Request form (DDR) that lists the items the buyer wants to be repaired. The seller may then choose to hire licensed contractors to perform the repairs. This involves searching for and interviewing various contractors and trade professionals. The seller would be responsible for verifying the contractors have the appropriate licensing, and insurance to perform the work. This is a lot of work. Wake County Home Buyers deals with contractors on a daily basis so we know how much work is involved.
If you choose to sell your house as-is to a local company like Wake County Home Buyers you can skip all of the above.
4. Fewer Concessions with an As-Is Sale
There are fewer concessions with an as-is sale because it is agreed at the time of contract that the seller will not be making any repairs. If you sell a house the traditional way you can expect to make repairs after the due diligence process or concede money at closing to compensate the buyer for those repairs. Either way, this leads to money out of pocket for the seller. If you choose to sell your house as-is you can avoid these out-of-pocket costs.
5. Less Hassle With An As-Is Sale
When you sell your house as-is you save a lot of the hassle associated with a traditional sale and the standard due-diligence period. This is especially true when you choose a local home buyer like Wake County Home Buyers. We buy houses directly from owners, as-is, and never ask the seller to make any repairs or even clean. As an added benefit we allow our sellers to discard furniture in the home. You can cherry-pick the items you want to keep and leave the rest.
If you have a house in the Wake County area that you would like to sell as-is fill out the form below!