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Should You Sell Your Home As-Is?

Selling your home can come with a long to-do list. You may need to clear the clutter, increase your curb appeal, update fixtures, replace outdated kitchen cabinets, etc. – and all of these require time and money in many cases. No wonder it’s tempting to sell your home as-is and hope for the best.

Sure, rather than exerting a lot of effort into updating your house (even though it could sell more quickly and for more money), selling your home as-is can save you money and the hassle of dealing with home improvements.

Of course, there’s no right or wrong answer – each option comes with its own pros and cons. Before making a decision, keep the following things in mind to arrive at the outcome you want.

What It Means To Sell A Home As-Is

Selling your home as-is means you’re selling the property in whatever state it’s currently in. No repairs are going to be made, and whoever purchases the home does so with the understanding that whatever state the home is in, that’s what they’ll get.

The term “as-is” will be included in the closing documents – the purchase and sale agreement – and the buyer will need to sign the paperwork in order to proceed with the transaction.

Don’t assume that labeling a property “as-is” allows you to skip disclosing any known issues with the house. You can’t just put up a listing price and think you can avoid all of the usual seller obligations.

As a seller, you’re legally required to answer questions honestly when it comes to any defects or other existing problems – the exact definition can differ from state to state. Of course, you don’t need to point out every drafty window or tiny dent in the wall, but if there are major concerns, you’ll need to disclose those.

These can include:

  • Previous flooding
  • Termite damage
  • Known electrical or plumbing issues
  • Structural defects like foundation cracks
  • Legal issues such as a cloud on the title
  • Roof leakage

Consider Your Local Real Estate Market

When deciding to sell your home as-is, it’s important to consider the potential value of your property and how much demand there may be for your location. For example, if you live in a highly desired neighborhood and your house has minor flaws, you may be able to get away with not making any upgrades or repairs and still be able to attract numerous buyers.

On the other hand, if there are multiple homes popping up for sale in your neighborhood and it’s been on the market for a while even with fancy upgrades, you may have a harder time entertaining an offer. That’s not to say you can’t price your home lower to attract buyers, but the longer your home sits on the market, the more likely it is you may need to lower your listing price even more.

You May Have Work Harder To Convince Buyers

Even if your home is in a good location, you may still have a harder time attracting potential home buyers. That’s because the term “as-is” typically has a negative connotation. Many home buyers may not want to deal with repairs or renovations or may assume there’s something really big wrong with the house – like defects that will require them to shell out big bucks or be forced into major repairs.

If you disclose some serious issues with the home, buyers may assume you’re desperate or make other negative assumptions. They may not be as willing to work with you on the purchase price, or they may try really hard to lowball you – they could even go as far as to ask for repairs during the home inspection process.

In this case, consider getting a licensed contractor to give you a few quotes on what it would cost to make repairs or replace defects in the home. For example, let’s say your roof and HVAC need to be replaced, and it’ll cost around $20,000 in total. Consider knocking down your listing price down by that amount to attract buyers.

The Closing Process May Not Go As Smoothly

The good news is that if someone puts an offer on your home, they’re likely the kind of people interested in fixer-uppers and understand it’s on them to make renovations and repairs. That doesn’t guarantee, though, that the buyer will follow through with the closing process.

Typically, there is a home inspection contingency in the purchase contract that gives the buyer the right to hire a home inspector to go through the home to see what condition it’s in. Afterward, the buyer can issue a request for repair, which asks for the repairs to be completed or additional compensation. You do have the right to refuse, but the buyer may have the right to walk away from the deal, especially if the inspection report uncovers major issues.

If the buyer does walk away, you are now legally obligated to share what was found in the report if there are major issues. It could mean even fewer potential buyers or a larger price reduction.

That’s not all.

You may need to worry about the home appraisal contingency – your buyer’s mortgage provider may require one. The lender loans the amount it believes it’s worth. So if an appraiser thinks the home is worth less than the agreed upon purchase price, the buyer may need to cover the difference. The lender could also require that you make repairs. If you refuse and the buyer can’t get financing, then you’re out of luck.

Proceed Carefully

Selling an as-is home can be challenging, as you may be dealing with lowball offers, possible repairs and more bumps in the closing process. But it can be worth it. You can hire a home inspector yourself to understand your property inside and out so you can avoid surprises or use it to convince buyers your home is the one for them.

Whichever option you choose, be sure you understand the process of selling a home without the help of a real estate agent and hire trusted professionals when it makes sense.

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The Finances Of Selling Your Home While Buying A New One

Buying and selling a home at the same time can be complicated. You need to figure out your timing, wade through tons of paperwork, work out financing –the list goes on. If you want your home sold so you can get the cash to buy a new one, it can certainly be stressful.

Ideally you can close on both properties on the same day so you’re not paying any more than you have to. However, it might be that you close on a house and then begin the process of selling one, but the financials may not make sense to you. While you can’t control the entire process, there are some general things you can do to make it as smooth as possible.

Weigh All The Pros And Cons Of Buying A Home Before Selling Yours (And Vice Versa)

Part of figuring out the finances of selling and buying a home at the same time depends on what you intend to do. Will you buy a home before selling or the other way around? Whichever option you choose, you’ll want to see how much your home could sell for as this could help you figure out a budget for the new home. It might be a good idea to get an appraisal or inspection to see if there are any ways you can increase the value of the home or if there are repairs you’ll need to make before listing your home.

Once that’s complete, figure out how much existing equity you have by subtracting what’s left on your mortgage from your current home’s market value. This amount can go toward a number of items related to your home but you won’t be able to use it until after your home sale is officially closed.

Here are some points worth considering when deciding whether to sell your home before buying and vice versa:

Selling Before Buying

  • You may be able to use existing home equity to put towards your new home purchase.
  • You might need to consider higher moving costs if you need to find temporary housing between homes.
  • You’ll know how much equity you have to put toward your new home.
  • You might need a temporary housing situation if your home sells before you find a new one.

Buying Before Selling

  • You can move into your new home without worrying about temporary housing.
  • If you negotiate a rent-back provision (when you sell your home on the agreement that you can rent the house from the new owners for a certain period of time), you won’t feel pressured to buy a new home right away.
  • You may not have enough cash up front (unless you consider a bridge loan) to put down a competitive offer on a new property.
  • You could find that contingent offers on your existing home means less desirable offers.
  • If you feel rushed to sell in order to use your existing equity for your new purchase, you may end up taking a lower offer.

Crunch Your Numbers

It’s time to know your numbers. Reach out to both your mortgage lender and your financial planner to see what’s feasible based on your financial situation. The amount of liquid cash, the amount of equity in your home and the loan products you qualify for can all factor into which path you take.

Understanding your numbers is important so you know how much money you need for both homes and when. Whether you sell your home with or without an agent, you want to know what types of fees you could be paying.

For example, if you decide to sell your home without an agent, you’ll need to consider closing costs and other fees like the ones you’ll pay a real estate attorney or the ones to list your home on a multiple listing service (MLS). If you need to make repairs before listing your home, you’ll need some cash set aside to take care of them.

In all situations, you’ll need to have a down payment for the new house. How much that will be depends on whether you intend on using the proceeds from your house sale to fund the new house.

Other considerations include moving costs and gap housing. Moving may not cost a lot, but it can be expensive to find temporary housing between selling your home and closing in on a new one.

Let’s say you want to sell your home first before looking for another one. In the meantime, where will you live? You can find temporary housing while you look for a new house, meaning you’ll need to come up with funds for that even if you negotiate a rent-back provision.

Once you take all these factors into consideration, come up with an approximate budget and decide whether you’ll need to take out a loan temporarily to cover some of the costs.

Determine If You Need A Personal Or A Bridge Loan

If you find that you need a little financial help, you can consider a personal loan or a bridge loan. A personal loan is an unsecured loan that you can use for almost anything, such as moving-related costs. Rates can be fairly favorable, but it all depends on your creditworthiness. This includes your credit score, income and other existing debts. The good news is that personal loans can be for small amounts (sometimes as low as $1,000) all the way to large ones.

However, a personal loan is generally not allowed if you need funds for a down payment. On the other hand, a bridge loan is a short-term loan that’s offered by a bank specifically to cover a down payment for your new house until you receive cash proceeds when closing your existing one. If this is something you’re interested in, you’ll need to speak with your lender as soon as possible because not all financial institutions offer bridge loans and it can be hard to qualify for one.

Don’t Rush It

Buying and selling a home can be a nerve-wracking process, but don’t let fear and anxiety guide your decisions. Avoid feeling like you have to accept the first offer that comes in because you want to access your home equity quickly or feel pressed to pay for two mortgages. Likewise, don’t compromise heavily on the type of home you want because you need housing –there are always short-term rentals.

At the end of the day, considering and planning for any upcoming challenges and risks can help lessen the stress that may come with this major life transition.

 

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Is Selling Your Own Home Right For You?

Selling your own home can be a lot of work, but the savings could be worth it. Like all major decisions, there are advantages and disadvantages to bypassing a real estate agent and striking it out on your own.

However, is it the right choice for you? It could be if you stay organized and remain patient throughout the process. But if you’re in a rush to sell and don’t remain diligent, then you could be better off with a real estate agent.

Here are some aspects to consider when deciding if selling your own home is the right choice for you.

It’ll Still Cost You To Market Your Home

When a real estate agent lists a home for sale, it goes on the Multiple Listing Service, or MLS. This is a database that can be accessed by other real estate agents in the local area. Your MLS listing can be found on other real estate websites and accessed by thousands of real estate agents and, by extension, millions of potential buyers online.

You’ll receive a lot of exposure on the MLS and the work a listing agent will work on your behalf to market your property. If you were to sell your own home, the property won’t be listed in the MLS.

A study conducted by the National Association of REALTORS found that 90% of home buyers went searching online for listings and information during the home buying process. That means it’s a good idea to have your listing on as many large websites as possible so that it has a higher chance of being found. In this case, you may be able to negotiate with a real estate agent to list your home on the MLS for a flat fee, which can be a few hundred dollars.

Other costs can include taking photographs for your listing, staging your home and preparing flyers and other items when hosting an open house. If you’re not willing to do the research, you might need to get an appraiser to advise you on the market value of your home so you can figure out how much to list it for.

You’ll Need To Handle All Negotiations

A real estate agent acts as the middleman between all negotiations between the parties, including the buyer’s agent, escrow and title agents, the real estate attorney and the financing institution. If you were to sell your home yourself, you’ll need to handle all negotiations.

This means you’ll need to learn the ins and outs of the negotiation process – it’s not just about price. You’ll need to look at a buyer’s offer and requests to see if you’re getting a good deal, including negotiating for repairs when a home inspection is completed. Understanding each step of the negotiation and closing process is crucial so you can meet all legal requirements when selling your own home.

Real Estate Attorneys Can Be A Life Saver

Speaking of hiring a real estate attorney, your state may legally require you to have one – something else you’ll need to pay for when selling your home. Even still, you may want the help of a professional on your side.

There could be lingo you’ll need to understand, such as what the buyer’s and seller’s rights are. Hiring a real estate attorney can help you navigate paperwork and give advice on the legality of the closing process. Unless you’re extremely experienced in real estate legal documents, you don’t want to risk overlooking forms or disclosures that could result in a lawsuit or the whole transaction falling through.

It Can Take A Lot of Time

It’s a real estate agent’s job to sell homes, so these professionals can be available most hours to show homes, handle negotiations and helping sellers navigate paperwork throughout the closing process.

What this means for you is you might have to drop what you’re doing at a moment’s notice to show your home to prospective buyers or answer their questions. Don’t forget the time it could take you to research a fair market value for your home, take photos and stage it. You’ll also need to be home during open houses if you choose to go that route.

Then there’s the negotiation process and making sure you’ve handled all parts of the closing process within the required time frames of your contract.

Generally speaking, the longer the home is on the market, the less it will sell for. So be prepared to dedicate time to sell or else you may be forced to drop the price to encourage buyers.

Choose Carefully

It can be really tempting to think that selling a home without a real estate agent is a walk in the park – you need to be realistic about how much time and effort it takes. If you take all factors into consideration and would rather not deal with the hassle it can take, then a real estate agent can be worth their commission. Otherwise, save yourself the money and do it yourself, and learn more about the real estate market in the process.

If you’re planning to sell your home on your own, the ForSaleByOwner.com partner package can make sure you stay on track and keep everyone on the same page – plus there are a few tools to get your home seen.

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8 Home Improvements To Make Your Home Sell Faster

If you’re thinking of selling your home within the next few weeks or months, preparing your home to go on the market can help you get the best price. Aside from making sure all major areas in the home are in good working condition, there are other simple home improvements that can entice buyers and get you to a sold home faster.

While the following home improvements seem like minor changes, they can be the difference between multiple home offers and none at all.

Give Your Kitchen A Facelift

Kitchen remodels can set you back thousands of dollars, but unless your kitchen has seen better days – think broken cabinets and decor best suited to the 1970s – you can make some dramatic changes by making small tweaks.

You can do simple things like replacing hardware, including drawer pulls, handles and sink faucets. Check your cabinet doors to make sure they close properly and aren’t crooked. If you have mismatched appliances, consider ordering new matching panels for them.

If you’re feeling adventurous, paint your cabinets to give them a facelift or even replace cabinet doors if the rest of your cabinetry is intact.

Make It Bright And Airy

Homes that appear dark and dingy are a turnoff for many buyers.

To help make your home as bright as possible without adding windows, swap your curtains with sheer ones, ideally in brighter colors (white is also good). Remove any outdated draperies and make sure to keep window treatments as open as possible when showing the home.

Clear The Clutter

Yes, it’s pretty much common sense, but it bears repeating – having a home that’s clean and free of clutter is more appealing to buyers. Paring down your possessions and having plenty of space in the home will make it easier for buyers to envision themselves living in the home.

Tidy up shelves, clearing as much as you can, and store extra items in your garage or, if you need more space, in a storage unit. Possessions to remove include seasonal items, toys, and bulky and excessive furniture.

While you’re clearing out clutter, consider rearranging furniture so it looks less crowded.

Increase Storage

Clearing out the clutter from your closets can show prospective buyers there can be plenty of storage space – a major selling point for a home. If you have small storage areas, spend some money on adding closet systems to your pantries and bedroom closets to maximize space. You can take it a step further and add in other types of storage, like a small shed in the yard or shelving systems in the garage, to showcase how much space there is for storage.

You can find many of these items in home improvement stores.

Paint Can Go A Long Way

If you have holes, scratches or kids’ drawings on the walls, it’s probably a good idea to clean and patch those areas. Painting the walls can also really freshen up a space, make it bright and help a buyer see themselves living in the home.

Painting neutral colors like white, grey and tan is best if you want to attract as many offers as possible. Painting the walls can take a weekend or less and won’t set you back a ton of cash.

Don’t Forget Your Bathroom

Besides kitchens, bathrooms are one of the places that buyers remember most. Like kitchens, you don’t need to spend thousands of dollars on a remodel. Making changes like switching up the hardware and light fixtures and adding in shelving for extra storage can do wonders for the space.

Update Flooring

Dingy and outdated carpet can turn off even the most eager of buyers. If you’re looking for a budget-friendly option, rent a carpet cleaning machine and get the flooring looking nice and new. Otherwise, it could be worth it to replace the flooring with new carpet, laminate flooring or even tile.

Get Some Curb Appeal

As the saying goes, you can only make one first impression – make sure it’s a good one. Aside from making sure that the outside of the house is clutter-free, work on the curb appeal. Consider some potted plants or shrubbery, a nicely mowed lawn and a freshly painted door. Even changing up the hardware, like adding new doorknobs and light fixtures, can go a long way.

Let’s Get That Home Sold

With some effort and a little bit of cash, you can make some home improvements that will appeal to prospective buyers and hopefully sell your home faster. You’d be surprised at how much minor changes can improve prospective buyers’ opinions of the property.