Selling a home "As Is"

[Mikeinfrank]

We had a home built in 1977 and have quite a bit of deferred maintenance such as needing new siding, windows, etc.

The positives are AG zoning, a nice barn and suburban setting in southeast Wisconsin. Don't have to buy another place, as we already have a nice spread. Proceeds will provide for nice vehicle upgrade and L3901 with lots of goodies.

I'm worried about as is cause buyer will need some pretty deep pockets.

 

[Talenel]

I know a guy looking for a place in SE WI, but why would a guy looking for a fixer upper need that deep of pockets?

 

[D2Cat]

Are we really suppose to make a comment about a piece of property we can not see?

 

[Missouribound]

"As is" and "Fixer upper" are synonymous. Deep pockets are really not part of that equation unless you are referring to the inability to get a loan on those type of properties.
What you let go in terms of repairs will now bite you in the a$$ when you sell it.
I'll bet you already know that.

You could throw some money into it now and make it acceptable for conventional loan types. Other than that you are at the mercy of the market.

It may not end well.

 

[Daren Todd]

I think it would really depend on what price your asking for home versus what others are going for in the area. Based on similar size and needs.

If a person figures they are getting a good deal, then they won't have an issue with upgrades and repairs. Now if the house is priced high, then those same things become hard to swallow.

 

[fruitcakesa]

You should always get some comps for your area to try and be in the ball park price wise and have an idea what repairs will cost.

 

[Howling]

Buyer may not need deep pockets. Just the right bank / mortgage.

We bought our current house AS-IS/ foreclosure. The mortgage was structured to include extra money for the repairs needed to get in to the house. Decade later still working on it.

List it and make sure buyers know it is AS-IS with problems as price reflects that.

 

[greeno]

Sold two houses so far in my life.

Never got the money back that I put in making it “ready for sale”.


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[CaveCreekRay]

Just remember, if your buyer requires a mortgage (because he needs to hold cash for the remodel) your sale may be dependent on the appraisal.

If the appraisal comes in way low, that is all you will get for the place, because that is all the buyer can borrow unless some other buyer has the cash to make the deal happen.

As someone who just did a big remodel, the pool of buyers wanting to take on such a project is declining as Baby Boomers retire and downsize. Fewer people want to take on a big project because, 1. They don't want the hassle and cost of hiring someone else to do the project and 2. They don't know how to do the basics themselves.

Look at comps and get a couple real estate people to give you honest appraisals. Will a sale at that price yield the money you need to do what you want? If not, you may have to upgrade some things yourself to sell at a decent price.

And remember: If you do get a buyer and agree on a price, you are subject to "discovery" during the inspection process. Every item discovered in the inspection will affect the price negatively. If the roof is bad, the heater needs replacement and the house needs a full exterior paint job, all that comes off the price. If they find the foundation is cracked, that comes off too. The buyer can walk unless you agree to his terms or to fix the problems that meet his requirements.

 

[shootem604]

We bought our place as a "fixer-upper" and that was reflected in the price. We had a "5 year plan" that is now about to begin its third iteration. However, the property is now worth three times what we bought it for, based on our property tax assessment. "sweat equity", indeed.

 

[skeets]

Buildings come and go,, but property stays forever

 

[lugbolt]

Bought my place as-is, mortgaged. It was well within appraisal and well under comps. And needed nothing but an owner.

Looking at a property as we speak, cheap, nice area, been in extended family for generations. Dunno what to do with it, flip or rent. Like the idea of income as rental and hate the idea of capital gain tax. Wish I could hang onto it for a cabin but it's not what I want for a cabin, too far from the river (1/4 mile or so) and on a major highway.

 

[SidecarFlip]

Buildings come and go,, but property stays forever

Exactly. The Load isn't making any more land. Why I buy land over dwellings. Besides I own enough dwellings now.

 

[D2Cat]

Lugbolt, check with your tax person. You'll discover the advantage of rental income over earned income.

 

[bearbait]

Renting isn't for everyone. I tried it when we decided to retire to the camp, stress, stress and more stress. First one I had was great then his girlfriend broke up with him and he got into the drugs, called me one night saying that I was trying to kill him because a light bulb blew, out the door with him. Next was a couple that seemed good until 3 or 4 months later no rent check. I drove 4 1/2 hours to go see them and found the house which we rented fully furnished empty. We called the cops and managed to get everything back but more stress. Never again, we sold it shortly after and never looked back. I still like to think there are more good than bad in the world however when it comes to money that changes everything.

 

[Mikeinfrank]

Thanks for all you comments. After interviewing three realtors, I think we tend overlook all the positives and fixate on the negatives. We were assured that we have location, and rural setting, and a big beautiful barn....the rest can be fixed. The demand is good.

We're listing next week and we'll do fine.

 

[William1]

I'm selling a home 'as-is' right now. If the place was in 100% shape, it would be worth X. But it is not. It needs Y spent. So I am selling it for Z.
X-Y=Z
The plus for a buyer is they get it exactly how they want it. The down side is they have to live through the remodeling.

Locaton, location, location.

 

[lugbolt]

Exactly.

One of my coworkers owns several rentals. All low-rent. Headache after headache, stressed continually, always leaving to put out this fire or that one. I've messed with it in the past (in the form of property management) and it's not for me. I am mostly a hard person to work with. If someone don't like the way I say something, they can go on down the road and it won't bother me. Got that from my dad who was a veteran in the '60's, grew up in a VERY poor family (same as I did) so whatever came out of his mouth was final. The downside? Renters have more rights than the landlords do, or it seems. You can't just kick someone out because they're on drugs (at least not here), and since drug use is rampant all over the place here, it makes for a huge issue-both from a legal standpoint and moral standpoint.....and yes I feel quite strongly against use of any illegal drug. Alcohol as well. The place I managed for a little bit, one of the tentants was a terrible alcoholic. We warned him several times of his abusive and destructive behavior, but it doesn't matter since the drug altered his mindstate and he was totally addicted to it. A lot of the house was damaged because of it. Sheetrock walls, ceilings, bathroom destroyed, etc. The house was a non-smoking house but again, the alcohol changes your mind so it didn't matter to him. After he was finally able to be evicted, we had to take him to court for the damages done to the house. Problem with renters....most of them don't own anything and don't have any money, and the laws are such that you really can't do anything by suing them, which meant about $8,000 came out of the property owner's pocket to fix the damage. But on the opposite side, renting is the only way a lot of people think they can own a home and that's false. There are homes on the market that are priced low enough that most anyone can own, and a lot of times cheaper than renting. The issue therein is that many of those homes get bought up immediately by....landlords and companies that rent them out. So if one pops up, you gotta be real quick!

 

[D2Cat]

This thread is like a typical tractor thread .... I've got a problem, let me tell you how it is.

I'm on the other end of the teeter-totter.

Oh, I've had to get rid of a tenant, but it only took 90 days at the most. And the sheriff was there at the posted time to let the tenant know he would be trespassing when the clock passed that time, and would be arrested. And I've filed paperwork in small claims court and got a judgement against a couple tenants who were judgement proof so it's just a formality. However, if they ever have a tax refund due, the attorney's bird dogging them get 60%, so it's worth it just to make them remember their stupidity.

So I can think of 3 parties have caused me grief.

I had an American Family Insurance office in place for 17 years. I had one lady rent for about 6 years, then moved out to govt. subsidized housing. After about 3 years there she called me and wanted to move back! Have one residence the ins. co. paid a premium rent (150% of normal rate) because their client needed residence while their brunt home was rebuilt!

I am thankful I started in the rental business young and with commercial property, then expanded to residential. It's been a good relationship with me. Several tenants have contacted me to ask if they could use me as a reference for a home loan or another rental.

I personally think it's much less head aches then many folks have at whatever career they choose, putting up with bosses and co-workers.

I think the answer is a multi-page lease that details every imaginable situation that can arise. It was developed by real estate attorney. The tenants have the utilities switched into their name with a confirmation number from the utility co. and lease signed, rent check and security deposit before they get a key.

 

[shootem604]

I don't rent out "homes" - I have serviced RV pads, which means I don't have to worry about anything getting destroyed, and they aren't "protected" by the ridiculous tenancy laws we have here.