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Selling a House As Is: What It Means for Buyers

November 15, 2019

selling a house as is

InkkStudios/iStock

Selling a home as is sounds like a pretty sweet deal for sellers. Sellers don’t have to scurry around fixing the place up.

But what does an as-is sale mean for buyers? When looking through property listings and the term “as is” appears, some people see it as a warning.

Others, such as real estate investors, may see a house selling as is as an opportunity. That might get prospective buyers wondering what exactly does “as is” mean?

Selling a home as is

Technically, when a real estate agent lists a house to sell as is, it means the homeowner is selling the home in its current condition, and will make no repairs or improvements before the sale (or negotiate with the buyer for any credits to fund these fix-its). The term “as is” is rarely tacked on a property sales listing that’s perfect and move-in ready.

On the contrary, people often sell as-is homes that are in disrepair, because the homeowners or other sellers can’t afford to fix these flaws before selling (which would help them sell the home for a higher price).

Alternatively, a home may have been through foreclosure and is now owned by a bank, or the seller may have died and left the house to inheritors or an estate agent who have little idea what could be wrong with it but need to sell.

Whatever the reason, the current sellers aren’t willing to pretty up a home before selling it. They just want to sell the real estate and move on. All of this means that the buyer of this house inherits any problems a home may have, too.

When a real estate agent lists as home to sell “as is,” that doesn’t change the legal rights of the buyer. The listing agent must still have the seller disclose known problems, and the buyer can still negotiate an offer with the final sale, contingent upon a real estate inspection.

Pros and cons of as-is home sales

So how can “as is” be the aforementioned opportunity, if the buyer is taking on all those problems?

It all comes down to cash value. Those two short words in a listing usually indicate that the home may be considered to be a fixer-upper. The house will have a relatively low list price to start with, and the sellers might even entertain still lower offers.

A real estate agent may even list a house with serious problems as “cash offers only,” if the house’s problems could prevent it from qualifying for a mortgage.

If the prospective buyers happen to be contractors or handy with a hammer, are looking for a property to flip, or maybe just want an extreme bargain, the promise of an as-is sale could be music to their ears.

Cash buyers and corporate investors look for home sellers who want a fast sale, but they expect those sellers to offer a low list price in exchange.

Yet the downsides of an as-is property are obvious and should not be underestimated. Any number of things could be wrong with the house that are not immediately apparent to the eye. Buyers might think they’re getting a killer deal, but they could also be throwing their life savings into a black hole.

Should you buy a house that’s selling as is?

Now that you know the pros and cons of an as-is home sale, you might be wondering whether to move ahead with the sale—and how. Since these sales can be bargains, they are worth considering, although there’s one precaution buyers will definitely want to take prior to the sale: a home inspection.

A home inspector examines the house from basement to rafters and will point out any problems plaguing the place that may make the buyer want to reconsider the sale. The problems can be current or potentially in the buyer’s future, such as an old roof that may need replacing five years later.

A real estate inspection costs around $300 to $500, and typically occurs after the buyer has made a sales offer on real estate that’s been accepted and put down a deposit.

The buyer, not the seller, pays for the inspections—which makes sense, because that way the inspector is not working for the seller.

On houses that aren’t selling as is, buyers may use problems found during the inspection to demand that repairs be made (or that credits be given so they can make those repairs themselves).

While as-is home sellers have already made it clear they won’t lift a finger on that front, an inspection still serves an important purpose for buyers before the sale.

Provided the buyers place an inspection contingency in the contract, this means that if the inspector unearths problems, the buyers don’t want to address, they can walk away from the deal with deposit in hand.

“You should always elect to do a home inspection, especially on a bank-owned property where no one knew how the home was cared for and no one knows what happened right before the past owners left the property,” says Winston Westbrook, a broker and owner of Westbrook National Real Estate Co. specializing in short sales and distressed real estate.

“Yes, you lose out on the cost of the home inspection, but the cost of the home inspection is well worth it, considering the headache you would have had in the future trying to make the house livable.”

On the other hand, if the inspection reveals additional problems, you might consider offering a lower price based on estimated costs of home improvement.

Remember that, despite what the seller says in the real estate listing, a real estate deal is still open to negotiation. If the sellers have a property on the market and it doesn’t sell, they may be open to selling at a lower price.

The sellers may even make certain fixes requested by home buyers, if that’s the only way they can sell the house.

Unless it’s a hot real estate selling market and other potential buyers are competing with you, the listing agent knows that the property won’t sell until you get a deal that works for you.

The post Selling a House As Is: What It Means for Buyers appeared first on Real Estate News & Insights | realtor.com®.

7 Important Home Repairs to Do Right After Moving Out

August 28, 2019

Kativ/iStock

Congratulations: You’re moving out, and on to your next home! Now all you have to do is pack up your things and skedaddle, right?

Not so fast. If you’re still trying to sell your current home, you’ll want to make sure it looks its best, which means you might have to make a few repairs. And there’s no better time to do this than after you’ve removed all your boxes and furnishings, since this means you’ve got plenty of space to get the job done right (and with minimal mess).

Granted, you might have already made some upgrades during the early stages of sales prep … but moving out means you could uncover a whole lot more. And trust us, buyers will notice!

Of course, if you’ve already sold your home, you’re off the hook … but if not, it will behoove you to do these seven upgrades after moving out. Don’t worry, they’re fairly easy, and they’ll make a big difference helping you find a buyer who’ll pay top dollar.

1. Patch holes in walls

Seeing walls with holes—even small holes left by nails—is an immediate turnoff to home buyers, says Sarah Fishburne, director of trend and design at The Home Depot. But you don’t have to repaint your entire house to have your home looking fresh again. A little spackling, followed by spot painting—a cinch if you’ve kept some original paint—will do the trick. (If you don’t have any leftover paint, peel a dollar-size piece from the wall and bring it to the paint store so they can match the color for you.)

If you have only a few holes and scratches, you can fill them with spackling compound, which is sold in small quantifrecities. For a greater number of gashes or holes, use joint compound, which is sold in quarts or 5-gallon buckets.

2. Add a fresh coat of paint to rooms that are outdated or painted in loud colors

Love that plum paint color you chose for your master bedroom? Home buyers might not! The good news is, painting a room is an easy, low-cost project you can do yourself. Selecting the right hue, though, is crucial.

“Neutral colors are generally the safest choice, as they blend with many different decor styles,” says Hunter Macfarlane, Lowe’s project expert. “Gray is a popular color to paint a room before selling, as it gives the walls depth while still tying furniture and other decor items together.”

Moreover, “a fresh coat of paint never hurt resale value,” Fishburne says.

3. Replace old outlet wall plates

This is another quick and budget-friendly way to make a space feel cleaner and updated, Macfarlane says. Proceed with caution, however: Old wall plates can be a fire hazard if they’re cracked or damaged in any way. If you suspect there’s an issue, hire an electrician to replace the wall plates for you.

4. Clean carpeting

Dirty and dingy carpets are huge eyesores, which is why David Pekel, chief executive officer at the National Association of the Remodeling Industry, recommends that homeowners give their house’s carpeting a good cleaning after moving out. You can amp up your vacuum with rug-cleaning products such as powders, foam sprays, and liquid shampoos available at grocery and hardware stores. For stained areas, use a bristled brush to work the cleaning solution into the carpet before allowing it to dry and then vacuuming up.

To remove embedded dirt, you may need to use a powerful industrial-style carpet-cleaning machine, like a Rug Doctor, which sprays hot water with a detergent over the carpet and extracts it with a high-powered vacuum. Industrial carpet cleaners have more washing and sucking power than most consumer carpet cleaners, but they’re expensive to buy—about $400 to $700—so it’s more economical to rent one from a hardware store for about $25 to $30 per day.

5. Clean hardwood floors

Many home buyers swoon over hardwood floors. So if you have them, make sure they’re glistening after you move out.

“Wood is probably the easiest floor covering to keep clean, but you have to use the right cleaning products,” says Brett Miller, vice president of education and certification for the National Wood Flooring Association in St. Louis.

Most wood floor installers or manufacturers recommend cleaners that contain isopropyl alcohol, which dries quickly, and are available at home supply stores. To make your own solution, simply add a capful of white vinegar to a gallon of water, which will help dissolve grease and grime on the floor but won’t strip the finish. To remove shoe scuffs, rub marks with a tennis ball, which cleans without scratching the finish.

Under no circumstances should you use a steam mop, Miller warns.

“Steam is horrible for wood floors. It opens the pores in woods and damages the finish, causing irreversible damage to any wood floor,” he says. Here’s more on how to clean hardwood floors.

6. Replace or refresh old hardware

Swapping out old cabinet and door hardware is a simple, low-cost project you can tackle in a day that will make your home more visually appealing. All you need is a screwdriver and a free afternoon. Want to save some money? Keep your existing hardware and give it a makeover with spray paint—a few light coats can breathe new life and personality into rusty old knobs and pulls.

7. Improve the look and functionality of your master bathroom

A full bathroom remodel is expensive; on average, it costs $10,344, according to HomeAdvisor. Just a few changes to your master bathroom, though, can make it one of the most stylish rooms in your house.

Simple touch-ups, like regrouting and recaulking bathroom tile, will make the room look newer. In addition, swapping out inefficient toilets, faucets, and shower heads for products that aid in water conservation can add real appeal to prospective home buyers who are looking to lower their water footprint (and lower their water bill!). A low-flow toilet, for example, uses 20% less water than a standard toilet, and water-saving shower heads can help families save almost 3,000 gallons of water a year.

The post 7 Important Home Repairs to Do Right After Moving Out appeared first on Real Estate News & Insights | realtor.com®.

I Bought a House With a Pool, and Wow, Was I in Over My Head!

June 11, 2019

AzmanL/iStock

I live in a house with a gorgeous in-ground pool. When my husband and I bought the property in 2012, I swooned over visions of pool parties filled with floaties and endless summer fun.

It’s a good thing I didn’t start sending out those pool party invitations too soon. Because first, we had to figure out how to repair and maintain a swimming pool, which is no small task. Here are a few things I learned about what it takes to have a home with a pool.

Lesson No. 1: Renovating a run-down pool will drain your bank account dry

The home we’d purchased was a distressed property near Seattle that had been empty for years. Thieves had stolen anything they could, including equipment and wiring. My neighbor talked about chasing off groups of teenagers who trespassed onto the empty property and sat around the pool, throwing rocks and bottles into the water. By the time we’d bought the place, the pool water wasn’t just green. It was a menacing green, a black, lumpy morass.

We were about to discover just how expensive and harrowing pool repair can get.

swimming pool before
We’ll just clean this up in a week, right?

Sally Herigstad

For one, the pool equipment needed to be replaced. A new, energy-efficient heat pump cost $4,500. We bought a pool-cleaning robot for about $800. Just to get the pool running, we spent about $10,000.

It wasn’t just money, either. Because draining a fiberglass pool can cause the shell to shift, we had to actually clean the existing water in the pool rather than draining it. So we spent weeks dragging rubbish and rotting debris out of the murky depths. We evicted hundreds of croaking frogs and salamanders. We cleaned out gallons of pine needle sludge before the pool was even clean enough to start using the pool robot.

The day we could see the bottom of the pool was a long-awaited victory.

Lesson No. 2: Once it’s up and running, swimming pools rock!

And yet: Once all the repairs were done, our first pool party had me hooked! Friends came, and friends of friends. They brought food, and babies, and laughter! It’s a good thing I live in the country, because the shrieking and carrying on would have been heard for blocks away in the city.

I discovered why playing in a home pool is much better than going to a lake or a public pool. I control the temperature, for one thing. (I think 86 degrees is about right.) I test the water myself, so I know the chemicals are all just so. We follow our own rules, with all the floaty toys and basketball games we want.

kids love a swimming pool
Kids love a pool party.

Sally Herigstad

Lesson No. 3: Even when your pool is fixed, maintenance costs a pretty penny

I’ll admit that my expectations of pool ownership were different from the reality. I had thought that once it was fixed up, we could add a few chemicals and run the pump filters every so often, and spend long, lazy summers lounging by the pool.

First, we live in the Pacific Northwest. So which long, lazy summers? You don’t know how short our summers are until you’re scanning the weather report, looking for enough sunshine to open the pool. I’m lucky if my pool doesn’t look more like this:

pool in winter
Down season for the pool

Sally Herigstad

Second, pools require a lot of maintenance, and inevitably, repairs. Sometimes we say we should just throw cash in the water, for all the chemicals we buy and dump in the pool. Last year, the pipes sprang a leak, and the summer was half over before it was working again. We spend a significant portion of every summer working on our pool. Last summer, we spent about $500 on repairs, plus another $200 on chemicals.

Lesson No. 4: Sometimes, a pool can’t be saved

In 2015, we bought another house in Puyallup, WA, intending to use it as a construction office. It came with a gigantic old concrete pool. We thought about filling it in to create more parking space, or filling it in part way and creating a koi pond. It seemed a shame to fill in a nice pool, though, especially after the previous owner told me how long ago her mother had won $20,000 in Reno and spent it on building this one.

Eventually, we dropped the office plans and started fixing up the property to sell, at which point I thought that perhaps the pool might even be an attractive feature for the next owners. Despite my husband’s skepticism, I started watching YouTube videos on restoring pools.

My daughter-in-law Sherri was game. We fished shoes, branches, milk cartons, and other junk out of the pool.

Working on the pool
Cleaning an old concrete pool is serious business.

Sally Herigstad

We pumped it out and started scraping the loose plaster. I bought crack sealant and plaster-patching supplies. Sherri and I spent days hauling buckets full of old plaster from the depths of the pool and spraying muriatic acid on the walls so the plaster patches would stick.

Cleaning concrete pool
Muriatic acid cleans the pool, but it’s nasty stuff.

Sally Herigstad

Removing old plaster from concrete pool
Loose plaster in the old pool must be scraped and hauled out.

Sally Herigstad

Unfortunately, the more we scraped, the more the plaster came loose. It became clear that we wouldn’t just be patching the pool, we’d be resurfacing the whole thing.

To get it done right, I looked into hiring a pro—and got a bid for $20,000 to replace all the plaster, tiles, and steps. Oh, and the pool equipment would be extra. That was money we didn’t have, considering that we had already spent more money on this house than we’d planned. We eventually cut our losses and sold the house with the pool “as is” rather than risk doing an iffy repair job or spending too much money.

Lesson No. 5: Get a pool inspection first, to know if you’re getting in over your head

If you’re looking at a house that comes with a pool, how do you know whether the pool can be saved, or whether you can afford to save it?

If you have your heart set on using a pool, consider having a pool expert inspect your property before you buy the house. Be reasonably confident you can afford to fix the pool and maintain it, or no one will be having any fun with it.

While the pool at our house has lived up to all my expectations of how much fun a pool can be, I hate to think how much money we’ve spent on it. I’m sure we could have gone on some fabulous vacations with that much money. But whether my pool has a dozen small children laughing and squealing in it for hours, or I’m all alone floating in warm water and looking up at the blue sky and tall fir trees, I wouldn’t change a thing. I’d rather be in my own pool than at any exotic location on earth.

The post I Bought a House With a Pool, and Wow, Was I in Over My Head! appeared first on Real Estate News & Insights | realtor.com®.

5 Unwritten Home-Selling Etiquette Rules That Can Make or Break Your Sale

April 4, 2019

5 Unwritten Home-Selling Etiquette Rules That Can Make Or Break Your Sale

venuestock/iStock; realtor.com

Selling a house takes, well, salesmanship. In other words, you have to prep your house so it looks its best. You have to open your door to strangers who’ll traipse through your home, open closets, and ask all kinds of questions. And, you have to do all of this without getting annoyed or overly emotional!

To help clue you in to some moments that might test even the mellowest home seller, here are five home-selling etiquette rules that often trip people up. Keep these in mind to ensure that you don’t annoy your listing agent, or scare off that special buyer.

1. Don’t take offense when your listing agent says your house ‘needs work’

Your listing agent might actually recommend that you make some preliminary fixes or tweaks before you even list the house. Don’t be offended by this advice—your agent isn’t trying to criticize you as a homeowner or a human being; he’s just trying to help you achieve your shared goal of selling the house quickly and for as much profit as possible.

“This is one of the most valuable things I do as a listing agent,” explains Bill Golden, a longtime Realtor with Re/Max Metro Atlanta Cityside. “You may not be willing to do everything I ask, but know that this is coming from years of experience. You want to create a welcoming environment.”

2. Don’t view lowball offers as insults

If someone makes an offer on your home that you think is so low you feel insulted, you might be tempted to ignore the person altogether—but doing so would be a mistake. Someone who makes a lowball offer might be testing the waters or trying to establish room to negotiate. Or it could be a novice at home buying who doesn’t realize the offer is insulting. At least keep the door open to further negotiations.

“This strategy is one that is always recommended to my sellers,” says Jen Horner, a real estate agent with Re/Max Masters in Salt Lake City. “Take the emotion out of the process, the seller should focus on the numbers at hand and if there may be an opportunity to close the gap between the two parties. You will learn quickly if the buyer is serious if they engage your counter and decide to stay in the purchase discussion.”

Matt Van Winkle, a real estate agent in Seattle, agrees, noting that the lowball buyer might simply be following bad advice.

“Some buyers feel the need to lowball; it makes them think they are ‘negotiating,’ so don’t discount it,” he says. “Always counter to make sure that you can still engage buyers who are getting bad advice.”

3. Do respond quickly to offers

No matter how you decide to respond to an offer—be it to accept, counter, or even decline—do so as quickly as you can. Most offers come with a deadline, but that doesn’t mean you should wait until that deadline to reply. Remember, your potential buyers are just as eager to find their next home as you were when you bought your house. It’s frustrating, from a buyer’s perspective, to have to wait on a response, so be courteous and answer as quickly as you’re able to.

4. Don’t tag along during the home inspection

Once you’ve accepted an offer, the buyer will likely hire a home inspector to check out your house for any problems. Of course you want to follow along. Who wouldn’t? Not only is there a strong curiosity factor at play, but any major problems that are uncovered could put you back into negotiations or give the buyer a reason to back out of the deal. But following along on the inspection is a bad idea for several reasons.

First, any criticisms made during the inspection will likely feel personal—like you’re being accused of not taking good care of your home—and you might get the urge to respond and defend your house (and yourself). A huge no-no! Second, having the homeowner lurking around during the process puts the inspector (and buyer, if present) on edge. Resist the urge, and make yourself scarce.

“Buyers feel strange about having the seller around during an inspection, so it is courteous to respect their privacy and let them take a look on their own,” Van Winkle says.

5. Do agree to reasonable requests for repairs

After the home inspection, there’s a good chance you will be hit with requests for repairs. The buyer has a right to request repairs, or a deduction from the selling price. While you don’t want to get nickel-and-dimed with requests for every little thing, it’s also not in your best interest to reply with a flat no to reasonable requests that are turned up by the inspection, unless you listed the home “as is” or already priced it under market value to reflect significant repairs you anticipated it needing.

Why? Because once the issue is revealed through the inspection, you can’t just ignore it. If it’s a costly issue, the buyer can (and seriously might) back out of the deal altogether if you don’t make a concession. And if that happens, you’ll now be required to disclose that issue to future potential buyers. All in all, don’t let a few repairs keep you from the closing table, because going back and relisting your house won’t be any better the second time around.

Even better? “Before your listing goes live, your real estate agent should walk through potential scenarios that you may encounter given your current market,” Horner says. “Are closing cost concessions normal? What are typical repair requests that may arise during home inspection? Should you fix or not fix prior to listing? It is always better to shed light on potential scenarios before they arise so that you have the time to think through how you might respond.”

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Buying a Home? 7 Unsettling Emotions You’ll Feel Before the Deal Is Done

November 8, 2018

Buying a home may be a financial transaction, but it’s a highly emotional one, too. And while there are highs—like the moments you know you’ve found The One or you get the keys to your new home—you may also go through periods of high anxiety or hopelessness before you close the deal.

Ask any homeowner about their experiences buying a home, and you’ll hear a similar refrain: Purchasing property is utterly nerve-racking. With so many moving pieces, buying a home can feel like a high-stakes juggling act—only you don’t have time to practice.

As a real estate agent over the past four years, I’ve specialized in working with first-time buyers. Although each home sale is unique, I’ve noticed buyers experience some of the same ups and downs during the home-buying process.

Here are seven things only home buyers understand.

1. Online photos can be deceiving

Odds are good you’ll be spending a huge chunk of time looking at properties online, but listing photos can be misleading. Professional photographers and listing agents alike are capable of disguising flaws of all shapes and sizes. The only way to truly know what a house looks like is to see it in person.

2. Open houses are fun—until they’re not

Going to open houses gives you the opportunity to see properties without having to deal with the hassle of coordinating showings. However, it’s easy to get worn out. If you’re serious about buying a home, you’re attending open houses every weekend—which can get quite cumbersome, especially if you’d prefer to be out brunching with friends or attending Junior’s soccer matches. The important thing to remember is that your house hunt won’t last forever, in spite of how it may feel in the thick of things (see our next point).

3. Buying a home can feel like a never-ending slog

Finding a great home—one that meets your needs and (hopefully) checks off a lot of your “wants”—takes time. With all of my past clients, I showed each of them at least five properties before we made an offer on a home. (One buyer looked at probably close to 30 homes before we found The One.)

The lesson: You have to be patient, because it could take a while for you to find a house that you love.

4. Anxiously waiting to hear back on an offer

No one likes playing the waiting game after submitting an offer on a home but, unfortunately, this is simply part of the home-buying process. Whether or not you’re going up against other offers, the seller needs time to review each bid carefully. Furthermore, each state has its own legal contract that home buyers must use when making an offer on a property, and some jurisdictions require you to submit a mound of paperwork.

Once you’ve submitted an offer, though, the best thing you can do is wait. To minimize the pain though, I typically recommend home buyers attach an addendum stating that their offer expires in 24 hours. I do this for two reasons: It prevents the seller from being able to use your offer to shop around for a better one, and it gives you an exit strategy if you decide you want to walk away and look for another home.

5. Disclosures and home inspections? Terrifying

Unless you’re buying a brand-new house, the seller is required to provide you with property disclosures about the home’s condition. These documents can be a bit unsettling, as can a home inspection.

But don’t fret: These documents err on the side of too much detail, and often make a problem seem far worse than it really is. Make sure to talk them over with your real estate agent so you know what the repair work will truly entail.

6. The disappointment of not getting everything you want

If you’re buying a house, you’d better be prepared to negotiate. When you submit a lowball offer on a property, you should expect the seller to make a counteroffer. Both parties may have to make concessions in order to agree on a sales price.

A request for home repairs is another big point of contention. Home inspectors are trained to find every single flaw with a house, no matter how big or small. If the inspection reveals a major issue (e.g., a cracked foundation), that should absolutely be something you discuss with the sellers to see who will pay for repairs. However, you shouldn’t nickel-and-dime the sellers by asking them to fix every minor thing that’s wrong with the house; if you do, the deal could fall through.

Note: I always recommend including a home inspection contingency when making an offer on a property, unless the house is a short sale or it’s being sold as is, in which case you don’t typically have room to ask for repairs. A typical home inspection costs $300 to $500.

7. Getting a hand cramp at closing from signing all those forms

At settlement, home buyers sign a lot of paperwork to make the sale official—meaning your hand will definitely be sore by the time you’re finished writing your John Hancock on the last document. But trust me, it’s all par for the course—and well worth it, as I’ve seen time and again home buyers’ eyes light up once they’re handed the keys.

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