Any tips on selling a house "as is" ?

[W2R]

I don't think so. The location is not prime and some houses in the neighborhood are not looking snazzy ... like weedy front yards. You would think at these house prices more care would be done. But this is California real estate and the mind boggles at the pricing.

When I sold, I had just moved out so it was completely empty. My realtor said to do nothing, and to get it on the market ASAP.. I insisted on having it cleaned ($200, 2-3 days), and then we put it on the market. I accepted a high offer 4 days later so I do think this works, with some luck and if the market is right.

The buyers have unbelievably terrible taste, which is fine (what do I care), but if I had spent any money fixing it up that money would have been wasted.

 

[jimnjana]

I would get an appraisal right away for how it is now. You will need it for determining your basis for tax purposes. Also get with a realtor to determine what must be fixed to make it lendable for a conventional loan. Tell realtor you want to list as is and be flexible. You can then work out concessions or repairs with buyer. If you sell for less than appraisal you can report a loss in your taxes.

 

[Another Reader]

So clearly I could get an estimate on obvious defects and reduce the house price by something like 150% of these costs. Or is that the right percentage?

Also do any sellers offer an account that can be drawn from to do some repairs? Maybe something (wild guess) like 50k for a kitchen remodel and other miscellaneous repairs? Or is this just an invitation to defraud?

No and no. You find out what fixers are selling for in your area and price it accordingly. The cost to retrofit is up to the buyer to determine. You want to sign the papers and be done with the property.

However, have a good look at the property with a couple of agents that are familiar with the market before you decide anything. Get their opinions and think about the options. Don't rush into anything. Spending some money might yield a decent return, depending on the neighborhood and the condition of the property. Once you have some rough numbers, you can make a more informed decision.

 

[Lsbcal]

No and no. You find out what fixers are selling for in your area and price it accordingly. The cost to retrofit is up to the buyer to determine. You want to sign the papers and be done with the property.

However, have a good look at the property with a couple of agents that are familiar with the market before you decide anything. Get their opinions and think about the options. Don't rush into anything. Spending some money might yield a decent return, depending on the neighborhood and the condition of the property. Once you have some rough numbers, you can make a more informed decision.

The red (my edit) seems reasonable. We are going to walk through the house with 2 separate agents tomorrow. One house on the same block is on the market for $520k and the interior looks great from the listing pictures.

 

[Qs Laptop]

So clearly I could get an estimate on obvious defects and reduce the house price by something like 150% of these costs. Or is that the right percentage?

Continue looking at comparable houses in the area that are listed on realtor web sites. Get a feel for how the market is pricing similar properties. Have your agent do a comp sale report.

Also do any sellers offer an account that can be drawn from to do some repairs? Maybe something (wild guess) like 50k for a kitchen remodel and other miscellaneous repairs? Or is this just an invitation to defraud?

I would not offer a repair fund. Simply price the property fairly to begin with. If it's listed as-is there should be no inquires about a repair fund or even discounts.

Here's a phrase I had at the ready to use with my mom's house if someone asked for a discount. Let's say they mention the house needs a new furnace (or roof, or front door, or whatever):

"We've taken that into consideration and have priced it accordingly."

 

[pb4uski]

We just went through this with my mother's house... generally good shape but dated (1990s) and hadn't been painted in 15-20 years.

I expected that we would need to replace carpet and paint inside and perhaps outside.

We followed the real estate agent's advice and only cleaned the house and had the carpets shampooed and the outside power washed and gutters cleaned. Less than $500 for that work. We totally decluttered... all drawers and closets were empty and only personal property remaining were some furniture for staging purposes.

House sold for a good price... certainly a lot more net proceeds than if we had put money into it and then sold it... IOW, we would never had got our investment in carpeting and painting back.... we were much better off to just price it warts and all and sell it. We ended up paying less commission too.

Listed Mar 11... accepted an offer on Mar 18... that offer fell through ~ Mar 27 after inspection, another low-ball offer on Mar 29 that we rejected, then a reasonable offer on Mar 30 that we accepted and we closed on Apr 29th. We did have to replace the dated electrical panel and breakers but that only cost about $1,350.

 

[Lsbcal]

You might look at selling directly to a developer or flipper.The Realtor may have a contractor in their contact file as well.If you sell to a flipper directly you save the commision.

Kind of depends on how "hot"your market is. Bay Area probably no problem.Weed,Ca probably want some help there

Any ideas how to find a developer that is honest and reliable?

Would I still pay a commission if the Realtor has a contractor in their file?

 

[Another Reader]

No such animal...

If the agent finds the buyer, they expect you to pay a commission. I would expose the property to the open market, once all the personal property is out and it's in the best shape you decide to put it in.

Pretty sure you will have a better idea of how you want to proceed once you run the agents through the property. In your shoes, I would not sign anything until you have processed all the comments and suggestions they make.

 

[mountainsoft]

Lots of work, but really nice job and outcome!

Thanks, for the most part, we just cleaned, repainted, and made lots of minor repairs. We reused anything we could. Mom already had several items she had purchased and never used (like the floor tiles we used in the bathroom), so that saved us some money too. We really didn't have any major expenses, just lots of little ones that added up.

Mom had smoked heavily in the house for many years, so nicotine stains were running down the walls and the popcorn ceilings were nearly black. There was no way to clean those, so we had to remove the popcorn ceiling. It was a messy job, but my wife enjoys projects like that.

The old furnace died many years ago, and there was no ductwork (just blew into the crawlspace). So I installed wall heaters throughout the house, using the old furnace wiring.

I replaced the 30 year old water heater and repaired or replaced all of the plumbing fixtures to stop leaks. I replaced all of the electrical outlets since they were worn out and installed new LED light fixtures.

I had the broken glass replaced in the front living room window. Only cost $400, much cheaper than replacing the windows and associated trim work.

I was able to salvage the old wood garage door with some wood epoxy filler, sanding, and repainting.

The floors were really out of level everywhere, but I used floor patch to smooth things out and installed vinyl plank flooring in the kitchen/dining/laundry. Only cost about $750. Had an inexpensive carpet installed throughout the rest of the house.

The kitchen cabinets were in rough shape and were mismatched. Rather than spend thousands on new cabinets and counters, we just sanded them down and painted. I added some cheap handles for a little "bling" and replaced the worn out drawer glides. Installed some vinyl floor tiles inside the kitchen base cabinets to dress those up, and vinyl contact paper on all the shelves and drawers. Probably spent less than $200 total on the kitchen cabinets. Didn't turn out too bad considering.

It would have gone a lot quicker if her house wasn't so far away. I put about 18,000 miles on my car that year making the four hour round trip 2-3 days a week. Once we got one of the bedrooms cleaned up and repainted, we would drive over some weekends and camp out in the house while we worked on it.

Mom paid $40K for the house 20 years ago. A realtor in the area estimated we might get $120K for it as-is if we cleaned out the garbage. We spent $6K fixing it up and sold it for $230K.

 

[Scrapr]

Any ideas how to find a developer that is honest and reliable?

Would I still pay a commission if the Realtor has a contractor in their file?

Our area has a number of small (1-5 homes/yr) to larger 50+homes/year) that tear down and rebuild.Best case they are looking to split the lot and build several homes. If that is happening in your area a drive around should find you some. That would be a direct sale and I don't believe there is a commision. Of course you want to have a good idea on home value. And you "might" be able to get a bidding war among several developers.

But it doesn't sound like your market is as hot as our market.

My MIL gets mailers probably weekly looking to buy your house.Fast close. CASH!!! That is a big red warning flag for a low sale price

Honest & reliable developer? Well,that is a loaded question. Some are,some aren't. Maybe ask for references,check the contractor licence, ask other developers & builders. Ask about any gotchas.Septic, sewer, asbestos, lead paint,zoning. The best developers close on time. But that's hard to say ahead of time

 

[gwraigty]

Nothing wrong with the look of the late 90's. That's when we built our house. But we have replaced most of the flooring. I agree, it'd be pretty grungy otherwise.

Many thanks for this topic, just in case we wind up having to deal with my husband's father's house someday. Built in 1976. Not much updated, still some original flooring, severely broken/sunken patio, original windows, basement that regularly floods, who knows what else. Plus, right now, an extremely complicated TOD deed could make 8 people in at least 6 different states co-owners.

 

[dg001]

We had bought a 60 year old house in a great school district - and over the years added new bathrooms and new $30k kitchen and other improvements. Recently, we sold that house - a developer brought it (we went through a real estate agent, and paid full commission) and is now going to just get rid of all the upgrades we made, and change the floor plan.

However, the "improvements" we put in did make a difference - it was a multiple offer situation, and the developer (who had offered no inspection or loan contingencies) had originally come in at the full price, but eventually matched the highest offer on the table, about 4% over. We took the developer offer because the other offers had inspection contingencies - risky with a 70 year old house!

The agent told us that if we had put in more improvements, the developer would probably have just torn those away anyway.

 

[ncbill]

Fixing up my relative's old home to sell.

They had very little money after they were laid-off a decade prior to their death, so while I haven't spent a lot (few thousand bucks) I've had the following done:

1. repaint where needed. they were the heaviest smoker I've ever known, so their entire bedroom had the greasy wallpaper stripped & repainted off-white. also repainted the ceilings in a couple of other rooms where the smoke stains were obvious.

2. steam cleaned the ductwork...wouldn't have bothered were they not a smoker.

3. sealed up the basement...there was still a coal chute (furnace was converted from coal to oil back in the 1950s) that would let water into the basement in heavy rain...had the chute removed and opening bricked up.

4. few electric gremlins left to chase down...open grounds on some circuits (about half the house upgraded from 2 to 3-wire in the 1970s)...want to add GFCI to kitchen/bath circuits if I can do so without having to replace the old split-bus electric panel.

Fortunately the bones (roof, HVAC) are in good shape, but the cost of dealing with the above has been frustrating...more in lost time than money...wanted to have the house listed in May, now will be August.

 

[ivinsfan]

Thanks for the comments everyone.

As I mentioned before, this house needs a LOT of work. The kitchen appliances don't work, cabinetry is a disaster, linoleum floor must be replaced, all carpeting must be replaced, needs full painting throughout, furnace needs replacing, front door replace (there are 5 locks on it), closet doors are weird, etc. These are just the things I easily remember inside.

On the outside, there is a closed structure attached to the house that needs to be demolished. Wood rampway leading to front door must be demo'd. Landscaping is a mess.

It goes on and on. There are unknowns I am sure.

Houses in this area are in the $450k range or so.

Is the house yours alone ? it's easier if you don't have to decide by committee. Sounds to me like you need a flipper...passing inspection and getting it mortgage worthy could be a big expensive hassle.

 

[pb4uski]

Is your objective to maximize proceeds or to just get rid of it? The former will be time consuming and involve risk... the latter is easier as long as it is priced accordingly as a fixer-upper or handyman project.

In the case of my mom's getting rid of it was more important than squeezing every last dime out of it but it sounds like you have a more challenging situation.

 

[BoodaGazelle]

Already lots of good replies here. We just went through this with FIL’s house, when they had to move. There is a danger in overspending, even if you think you are just doing the basics. But the flip side is that an “as is” sale may be pennies on the dollar, and that is in fact what happened to the house next door. They took at least $40-50K off of what it could have sold for. YMMV....

 

[aja8888]

Thanks, for the most part, we just cleaned, repainted, and made lots of minor repairs. We reused anything we could. Mom already had several items she had purchased and never used (like the floor tiles we used in the bathroom), so that saved us some money too. We really didn't have any major expenses, just lots of little ones that added up.

My daughter and I did the same to her Mom's (my ex) house when she passed about 5 years ago. Cleaned/painted it and did some flooring/plumbing/new toilets/etc about to the same level as you did. It took us 6 months, off and on. Probably made a 25% difference in the sold price of the house.

 

[Car-Guy]

I inherited one of these neglected houses. Everything needed work. I didn't want to mess with fixing it up or even cleaning it since it was located 150 miles away and was in a lower price ranged (125 to 150k) neighborhood. I called two of these "we buy any house" companies. Both offers were within 5k of each other which was about 1/2 of the average home selling price in the area. I actually took the lower offer since there were no strings attached, a much quicker closing guarantee and they came to me for the closing with a cashiers check. If the truth were known, I would have taken far less just to get rid of it.

I did donate the furnishings in the house to the Salvation Army but that was it.

 

[pb4uski]

Already lots of good replies here. We just went through this with FIL’s house, when they had to move. There is a danger in overspending, even if you think you are just doing the basics. But the flip side is that an “as is” sale may be pennies on the dollar, and that is in fact what happened to the house next door. They took at least $40-50K off of what it could have sold for. YMMV....

That is the calculus we all have to do. In the case of my mom's house I could look at some good comps that had been totally renovated and then sold... same floor plan/model, zip code, etc.

In our case, the difference between the sale prices of those fixed up homes and what we were able to sell "as is" was much less than what I believed that it would cost to get the house from "as is" to fixed up (not to mention the time and aggrevation of having the repairs done)... so accepting a lower price was an easy decision.

 

[Lsbcal]

Is the house yours alone ? it's easier if you don't have to decide by committee. Sounds to me like you need a flipper...passing inspection and getting it mortgage worthy could be a big expensive hassle.

It is all mine. The realtor we have decided on today agrees that a flipper or extreme DIY type will buy it.

 

[Lsbcal]

Is your objective to maximize proceeds or to just get rid of it? The former will be time consuming and involve risk... the latter is easier as long as it is priced accordingly as a fixer-upper or handyman project.

In the case of my mom's getting rid of it was more important than squeezing every last dime out of it but it sounds like you have a more challenging situation.

We will put it on the market at an attractive price and try to get a quick sale. I have no intention of leaving too much on the table though.

 

[Qs Laptop]

It is all mine. The realtor we have decided on today agrees that a flipper or extreme DIY type will buy it.

Be careful. Flippers are notorious for giving low-ball offers. We had a house flipper that offered us a lowball offer and wouldn't move off it no matter what. I countered at 3% higher than his bid and he said no. We ended up getting 24% more than his offer when we finally sold.

Keep in mind the realtor will want to sell the house and move on to the next deal. Just a little bit more money from the buyer will make a big difference to you but very little to a realtor.

For example, using 6% commission as the realtor's commission rate, if you were to sell the house for $350,000 the realtor gets $21,000. But supposing you held out for a bit more and got $360,000. You get an additional $10,000; the realtor gets an additional $600. I've got to believe the difference between $21,000 and $21,600 isn't much to a realtor, but another $10,000 in your pocket makes a huge difference.

 

[ncbill]

Be careful. Flippers are notorious for giving low-ball offers. We had a house flipper that offered us a lowball offer and wouldn't move off it no matter what. I countered at 3% higher than his bid and he said no. We ended up getting 24% more than his offer when we finally sold.

Keep in mind the realtor will want to sell the house and move on to the next deal. Just a little bit more money from the buyer will make a big difference to you but very little to a realtor.

For example, using 6% commission as the realtor's commission rate, if you were to sell the house for $350,000 the realtor gets $21,000. But supposing you held out for a bit more and got $360,000. You get an additional $10,000; the realtor gets an additional $600. I've got to believe the difference between $21,000 and $21,600 isn't much to a realtor, but another $10,000 in your pocket makes a huge difference.

Yep, there have been studies on this...the Realtor just wants to get your home sold ASAP.

But when selling their own property the Realtor leaves it on the market several months longer than for their clients in order to collect what is usually a 5-figure premium.

 

[folivier]

My DW and her 4 siblings will be facing this situation in the coming years. The house their mom owns is in a small town with very little real estate activity. Recently they installed central a/c, replaced the septic system, and repaired a few roof leaks. The house is very outdated but no one who would buy in that area would expect granite countertops, etc. I've made it very clear that we are not interested in keeping the house. One sibling is interested in buying it and moving back home. That would be the best scenario to sell it to them cheap. And to complicate the situation their 96 YO aunt lives next door in a similar house. She has no kids so probably one of my DWs siblings will inherit her house. No flippers are interested in this area. Their uncle's house took 2 years to sell.
Hopefully it'll all work out....

 

[HI Bill]

Sounds like an immense cost and effort to make the house 'habitable'. At a minimum, I'd clean out the house of all debris, vacuum, and clean the windows, unless it's truly a tear-down.

If you sell as-is, realize that you're likely to get much less than if you had done the repairs yourself. For a $450K house, I'm guessing you'll take a $100K+ hit to sell it as-is. What I'd want to determine is the cost to renovate to an acceptable level to sell, versus what you'll lose selling as-is. Also, how 'hot' is the local market. As-is buyers have to buy without full knowledge of the problems inherent in the house, and will offer a price that offers them an acceptable level of risk, so you may be selling the house more cheaply than necessary. Alternatively, if you take on the repairs yourself, you're on the hook for those surprise problems.