Common Questions Sellers Have When Selling a Home “As-Is” in California
Selling a house “as-is” can sometimes be confusing, especially if your property needs repairs. It can however be beneficial for sellers in certain situations, specifically if you don’t want the hassle, cost, and time of fixing it up.
Selling a property is a big decision for most people, and it’s important to understand your options to make the best decision possible.
1. How do I sell a house that needs a lot of repairs in California?
If you’re pressed for time and the home needs repairs, getting a cash offer could be for you. Get multiple offers from local, reputable cash buyers, and make sure to ask for a letter of credit or proof of funds. If the cash buyer provides you with a letter of credit, make sure to call and verify with the hard money lender they’re qualified. Be sure their offer includes little to no contingencies, or ways the buyer can back out of the deal. Requiring a proper amount of earnest money deposit is also key to ensure you’re dealing with a legitimate company. 1% to 3% of the purchase price deposited into a 3rd party escrow company is typical.
If the home can qualify for a conventional loan and you’re not pressed for time, you can explore the option of a conventional listing, putting the property up on the MLS, and offer seller credits for repairs to a buyer if you need to. Make sure to calculate your closing costs to see what you’re netting after the sale. This includes real estate agent fees, title fees, escrow costs, and seller credits. You can field cash offers from a company like Quick Home Offers before entering into a listing agreement with a real estate agent to make sure you’re netting the most amount of money.
2. Should I fix up my house before selling, or sell it as-is?
The answer to this depends on your budget, timeline, and goals. If you’re trying to maximize sales price, tackling high return-on-investment items like paint, garage door, landscaping, a kitchen and bath remodel, and flooring can go a long way. Gather bids for the work needed, look at comparable sales, and see if it’s worth it to make the investment.
If your goal is an easy sale without putting tens of thousands of dollars (or more) up front, an as-is sale is a perfect solution. Make sure to properly disclose any work needed during the sale process.
3. What are the pros and cons of selling a fixer-upper?
Pros:
- Avoid repair costs
- Faster closing when dealing with legitimate cash buyers
- Less stress
Cons:
- Lower sale price
- Limited buyer pool
- More negotiating on price or terms
4. How do I price a house that needs repairs?
The first step is to understand what work is needed and how much that will cost. Once you know what the cost to repair is, look at comparable sales that have been updated and subtract the cost of the work needed, plus 5% to 10% of the sales prices. Sellers sometimes make the mistake of only subtracting the repairs needed from the comparable sales prices and don’t leave any incentive for buyers to go thru the process of fixing up the home, holding costs, and other costs associated with a rehab. When listing a home conventionally, properties priced in this manner may even get bid up. If selling to a cash buyer, make sure to field multiple offers.
5. Where can I find buyers who are interested in fixer-uppers?
Investors, flippers, and cash-buying companies are your primary audience. You can also list the property on MLS with language that targets buyers looking for renovation projects, although you will be paying an agent and other fees associated with selling. Make sure to field offers with cash buyers like Quick Home Offers before you sign with a listing agent to determine what your best options are to net the most money, as you may still need to pay your agent even if you find your own buyer.
6. What should I disclose to potential buyers about the condition of my property?
Legally, you must disclose known defects, such as plumbing issues, structural problems, or mold, if there’s been a death on the property, or other material facts that might affect value like noise pollution. Transparency is crucial—it protects you from future legal claims and builds trust with buyers.
7. How do I market a house that needs repairs in California?
Focus on the potential upside. Things like a great neighborhood, good home layout, views, large backyard, ADU potential and good schools will help drive interest. Make sure to include proper keywords in your marketing like “investment opportunity”, “Needs TLC”, and “great upside potential” so that people looking for these opportunities can easily find the property.
8. What kind of inspections should I expect when selling a house that needs repairs?
Even with an as-is sale, some buyers may still request an inspection. This is usually for informational purposes and gives buyers a clearer picture of what they’re purchasing. Be prepared to answer questions or negotiate based on the findings. Cash buying companies like Quick Home Offers typically do not require formal inspections.
9. Can I get a mortgage on a house that needs repairs?
This is mostly a buyer’s concern, but it impacts you. Homes needing significant repairs may not qualify for traditional financing, which can narrow your buyer pool. Cash buyers, however, sidestep this issue entirely. Items that typically prevent a home from qualifying for a conventical mortgage include lack of flooring, roofing issues, electrical issues, broken windows, lack of heating, and other issues. An increasingly important issue in CA and around the US has been un-insurable homes. Insurance companies may drop insurance for some of these issues as well, making it difficult to obtain a loan.
10. What are the alternatives to selling my house traditionally if it needs repairs?
Alternatives include:
- Selling to a cash home buyer (like Quick Home Offers)
- Fixing and renting it out
- Offering seller financing (which may have some tax advantages for sellers)
Each has its pros and cons depending on your situation.
11. How do I negotiate with buyers who are purchasing a property that needs repairs?
Buyers will offer less for fixer-uppers sold “as-is”, citing the cost of repairs. Be prepared with repair estimates or inspection reports to support your asking price. You can also offer small concessions (like closing cost assistance) instead of dropping the price significantly.
12. What paperwork is involved in selling an as-is property?
Expect to complete a purchase agreement, a property disclosure form, and the standard closing documents. In as-is sales, the agreement will typically include an “as-is” clause stating the buyer accepts the home in its current condition. Selling conventionally will require more paperwork. Selling to a cash buyer like Quick Home Offers typically requires less paperwork. As with any sale, disclosures are very important. Be sure to disclose everything you’re aware of in writing to cover yourself legally.
13. How can I make my house look appealing even if it needs repairs?
Focus on curb appeal and cleanliness. Mow the lawn, declutter, and clean the interior. A few low-cost cosmetic fixes—like fresh paint or new light fixtures—can go a long way without breaking the bank.
14. What are the tax implications of selling a fixer-upper?
If the property is your primary residence and you meet ownership and residency requirements, you may qualify for capital gains exclusions. If the property is a rental property, the taxes you pay will likely differ from a primary residence. Always be sure to speak with your CPA before selling.
15. Should I get a pre-inspection before listing my house that needs repairs?
A pre-inspection can help you understand what to expect and be proactive in your disclosures. It can also help in pricing the home correctly. Providing an inspection report and getting a bid to fix the issues will help you understand costs ahead of time. In addition, providing an inspection report to a potential buyer will help put their mind at ease and make negotiations easier for all parties.
Final Thoughts
Selling a home as-is can be a smart and stress-free solution—especially if you’re working with the right team. Quick Home Offers specializes in buying homes in any condition. Whether your property needs a little TLC or a full renovation, we’re here to make your sale simple, fast, and fair.
Ready to sell your house as-is? Opt into the form or call / text us today at (805) 870-5749.