| Selling

We get it. Sometimes you just want to sell your home and be done with it. You might also have circumstances that keep you from investing a bit now to see a higher return tomorrow such as financial challenges, health issues or life-sucks-at-the-moment situations. We get that too. 

This could be a job for selling as-is, your friendly neighbourhood strategy for dicey and not so dicey scenarios. 

Here we look at what you have to lose, what you have to gain, and what you can expect when selling as-is.  

What Exactly is an As-Is Listing?

Selling as-is means you won’t be doing anything to make your home more presentable or desirable. It includes an as-is clause in the purchase agreement telling buyers they’ll be the ones taking on the costs for any work that needs to be done. BUT this isn’t a 100% buyer beware, get out of jail free strategy for sellers. Your agreement still requires full disclosure. But you’ll have a kind of Zen-like calm knowing a) you don’t have to do any prep work or b) accept offer contingencies regarding repairs — even if it could cost you a sale. Water off a duck’s back. 

Wait What? What’s Disclosure?

In Ontario, the seller has a duty to disclose any known material defects in the property by submitting a SPIS (Seller’s Property Information Statement). This protects the buyer and provides all the necessary information they need to make an informed decision. Although this puts you at risk of losing sales or profits, it also protects you from liabilities related to issues buyers find in the home once they move in. 

Your SPIS lists known defects, renovations, and other property information such as an ongoing roof leak you never repaired, pests you didn’t control, or mould you didn’t abate. By law, you must also reveal what are called “latent defects” that aren’t obvious in an inspection, including the following:

  • Anything that makes the home uninhabitable
  • Anything that makes the house unsuitable for the buyer’s stated purpose
  • Anything that makes the home unsafe 

And be prepared for some unexpected things that can catch you off guard. For example, if you’re selling your home because your neighbourhood is unbearably noisy, as the seller you don’t have to mention it unless the buyer asks you outright specifically about noise. Then you have to answer truthfully. Also, your real estate agent does have to share this information so there’s no way around it. 

There are also “known stigmas,” which can include, a sketchy history with a grow op, murder/suicide, or a notorious character associated with the home. And we’re 100% serious about this – paranormal activity. So, if your walls are bleeding or you think your house is haunted, your agent has to share this information with the buyer as well. 

Are you looking for more home selling resources? Read these blogs next:

Why Would I List My Home As-Is?

There are several reasons you might choose to list as-is:

  • You know the house is in disrepair and don’t have the funds to fix anything before selling
  • You aren’t willing to put in the work, time, and effort to bring the home up to snuff to get full price
  • You live in a primo neighbourhood where houses sell like hotcakes, good condition or not
  • It’s an estate sale and anything you get from the sale is pure gravy
  • You’re in a rush to sell due to things such as divorce, illness, job location change, etc.
  • Your house really isn’t in bad shape as far as you know and you just want to get the property sold with minimum effort
  • You’re in no rush to sell and are fine waiting to get a fair offer knowing your home is in rough condition

What is the Risk of Selling As-Is?

The main risk of selling as-is is that you won’t get the full value of your home for the following reasons:

  • The buyer wants to make up for the money they’ll have to invest to make the home move-in ready 
  • The low price is an incentive for buyers 
  • The buyer gets more negotiating power when you sell as-is
  • Your home might sit on the market too long, so you settle for low ball offers

There’s also a higher risk of liabilities even with the as-is clause in the purchase agreement. If the buyers find something seriously wrong with the home and can prove you failed to disclose it, you might have to cover the repair/replacement costs. As-is lawsuits are harder cases for a buyer to win, but stranger things have happened. This is where that honest SPIS comes in. 

Home inspection risks

When a buyer requests an inspection that reveals something like a foundation issue you didn’t know about, there’s no specific legal requirement for home sellers in Ontario to disclose previous inspection reports. However, you’re now aware of this latent defect. It’s best to fess up and disclose it to avoid legal challenges. And that really sucks because you’re now selling a home with a bad foundation, which is a huge hit to your listing price and your buyer pool. That’s why as-is sales tend to favour offers that waive the inspection. 

What does due diligence mean in real estate? Read our blog to find out right here.

Are There Any Advantages of Selling As-Is?

Sure. You save money up front, you can actually get a great price if there’s nothing scary-wrong with your home, and you don’t have to worry about home staging and such. Today, there’s a much wider audience looking for fixer uppers with agents scanning new listings each week for as-is deals. There are also flippers and investors willing to pay cash and close fast on as-is properties. As a result, you might even start a bidding war. You might. 

When selling as-is, you have less to worry about including:

  • Investing time and money in those finicky and not so finicky repairs 
  • Pro stagers invading your home, telling you to put stuff in storage, or messing with your collection of vintage kitsch flea market finds
  • Keeping your home presentable for buyers and viewings
  • Annoying buyers asking for endless or unreasonable repairs in their contingencies (the worst!) 

What’s the Safest Way to Sell As-Is?

If you still want to go the as-is route despite the possible risks, there are a few things we can suggest to help cover your behind including:

  • Don’t have a pre-selling inspection that might reveal issues you sincerely didn’t know about. Once revealed, you’ll have to disclose them. 
  • Complete your SPIS in full detail and don’t leave anything out that could catch you up once the buyers move in.
  • Be prepared to see buyer after buyer walk away.
  • Understand the realistic price you can expect so you don’t pass up perfectly good offers given the as-is condition of the sale. 
  • Include a 24-to-72-hour escape clause allowing you to walk away from an offer if a second buyer submits an offer on the property. Keep in mind that the first buyer will usually include a “right of first refusal” clause giving them the right to choose to waive or fulfill conditions like the inspection to finalize the sale).
  • Work with a savvy real estate team like us who understands the as-is process and will work hard to get you the highest price!

Curious about working with a real estate agent? Here are some blogs you should read next:

What Should You Expect When Selling As-Is?

If inventory is low, you’re more likely to see multiple buyers interested in your home. While flippers and investors with more capital to invest in repairs might be willing to waive an inspection, buyers who intend to move in won’t be as likely to afford the risk. As a result, you might find a parade of inspectors traipsing through your home, clambering onto your roof, and shimmying into the corners of your attic and basement looking for issues. Smart buyers might use their inspection to prevent other offers from coming in during their inspection period, so you want a real estate team who’s going to help keep these scenarios from making your life hell. Also, if you luck out and get a bidding war, you can look for the offers waiving the inspection yet not drastically reducing the price. That’s as-is gold!

Other things might include:

  • In a buyers’ market, far less interest, far less offers, and much lower offers
  • Buyers walking away depending on what the inspections reveal (and that worst case scenario where you’re now stuck with disclosing those findings)
  • Low ball offers, especially if the house sits on the market for weeks or is in a less desirable neighbourhood
  • Hard ball negotiators such as investors and professional flippers trying to bully you into taking unfair offers (we’re not afraid of these guys BTW and we’ll make sure they don’t take advantage of you) 

And What About Staging – How Is that Better?

Staging allows us to highlight the good points of your home, so buyers “get it.” It’s designed for homes in fair to good condition that feel outdated, or where buyers might find it hard to imagine how to use certain rooms. For example, a bedroom you turned into a dressing room filled with racks of clothing needs to be restaged as a bedroom. 

If your home is in poor condition with many issues both cosmetic and disrepair wise, or worse, is uninhabitable, staging the home is exceedingly difficult and very costly. It can also be construed as misrepresentation, which means you’re trying to cover up the true condition of the home. This is not good and frankly, illegal for us real estate agents. That’s not what we mean by staging!

Conditions where selling as-is makes more sense than staging would include:

  • Severe electrical issues—dang that knob-and-tube wiring, etc.
  • Serious plumbing problems – lead pipes, corrosion, leaking water heaters, oh my!
  • Severe and/or extensive roof damage that needs replacement STAT
  • Abatement needs for dreaded things like lead paint, black mould, or asbestos 
  • Known termite or pest infestation or pest related damage (yuck, yuck, and yuck) 
  • Severe and serious foundation issues (every buyer’s worst nightmare)
  • Any form of safety issues 
  • Failing or out-and-out broken HVAC 

You also might want to sell as-is when your home is safe enough to live in, but just has too many issues to contend with, such as: 

  • Non-threatening electrical and plumbing problems
  • Significant roof damage, wood rot or foundation issues
  • Old, soon to conk out HVAC system
  • Noticeably damaged and seriously outdated kitchen and bathroom(s)
  • Severely damaged flooring, faucets, light fixtures, stairs, etc.

These are the typical things people expect and accept in an as-is property. Staging doesn’t work in these conditions as it’s like putting lipstick on a pig.

Where we might recommend you consider investing minimal time and investment is when your systems and structure are in good condition, but the rest of the house needs some TLC like:  

  • Removing clutter but not like hoarder-level clutter
  • Cleaning a really dirty home, but not an infested home or where there were like 18 cats living there 
  • Steam cleaning dirty carpets or dealing with some staining on floors 
  • Repainting peeling old paint not related to leaks
  • Replacing old faucets and light fixtures 
  • Doing some weeding and lawn mowing  
  • Dealing with some quick exterior cosmetic fixes like repainting the front door, repairing minor wood rot, and repainting peeling paint on things like the front porch or window frames, etc.
  • Getting rid of foul smells 

This basic prep work isn’t really staging per se but more like tidying up. However, these steps can help you see an increase in your selling price and help make back your tiny cleanup investment to boot. 

The Bottom Line

Selling as-is can work wonders, especially when your home is in the right neighbourhood. It’s also becoming a higher demand type of property for investors, flippers and home buyers which means your home might not sit on the market for months. You can use the as-is sale when you want fewer pre-listing headaches and understand it might present higher risks during the selling process. 

Still have questions about selling as-is? Call The Christine Cowern Team at 416.291.7372 or email us at hello@christinecowern.com with any questions or to set up a call. We’d love to work with you!