Selling a house “as-is” can be difficult for many New Jersey homeowners. On the one hand, repairs and upgrades to a property can be time-consuming and expensive. Selling a house “as is” allows homeowners to avoid these costs and sell the property quickly and easily. On the other hand, selling a home “as-is” may result in a lower sale price and potentially even fewer interested buyers.
So, how much do you lose by selling a house in New Jersey “as-is”?
The answer is not simple, as the amount you lose will depend on several factors; the condition of the property, the local housing market, and the type of sale you choose. In general, however, you can expect to receive less for a house sold “as-is” than you would for a similar property that has been repaired and updated.
Condition of the Property
One of the key factors that can impact the sale price of a house “as-is” is the property’s condition. Suppose the property is in good condition, with only minor repairs needed. In that case, the difference in sale price between a move-in ready property and one sold “as-is” may not be that significant. In this case, the convenience and simplicity of selling “as-is” may outweigh any potential loss in the sale price.
However, suppose the property needs significant repairs and upgrades. In that case, the difference in sale price between a repaired and updated property and one sold “as is” can be considerable. In this case, buyers may be hesitant to purchase a property that requires a lot of work. Also, the lack of repairs and updates will make the property much less attractive and lower its value. In some cases, if the home needs significant repairs, you may not be able to sell it to a retail buyer. A bank will only lend on the property if the house passes a township certificate of occupancy requirement. Selling your home as-is to a professional home-buying company may be your best option.
The Local Housing Market
The local housing market can also impact the sale price of a house “as is.” In a hot housing market, where demand for homes is high and few properties are available for sale, a house in “as is” condition may still be in high demand and command a good sale price. In this case, the convenience and simplicity of selling “as is” may still be an option for sellers on the retail market without seeing a much lower sale price. This was the case during the height of COVID when there was minimal inventory in very hot real markets throughout the county. Buyers had to be less picky during that time and were willing to look at “fixer-upper” properties.
However, in normal and slower housing markets, where demand for homes is lower and more properties are available for sale, a house sold in “as is” condition will generally be less attractive to buyers. In this case, buyers may be able to find other properties that are in better shape and do not require as much work. The lack of repairs and updates on a house in “as is” condition may make it less appealing and lower its value substantially depending on the inventory level.
Type of Sale
Some New Jersey sellers want to avoid the headache of dealing with repairs before selling their houses. Therefore, the homeowner’s selling route will impact how much money they may forfeit when selling their home “as-is.” To clarify, New Jersey homeowners have two options to sell their homes.
The first option is going through the “retail” market, the traditional way of selling via a Realtor on the MLS. This requires that the house is in good, mortgageable condition so that it can appeal to most buyers. A Realtor will likely advise making obvious repairs before listing the property on the open market. They will market your home to as many people as possible, so expect to keep the house clean and available for multiple buyer showings. At the end of the process, there will be closing costs such as a 5-6% Realtors commission and potential credits to the buyer for home inspection repairs.
The second option is selling “as-is” to a professional home-buying company like Halo Homebuyers. Some sellers choose the latter option because they want a faster, easier, and more convenient way of selling their home. The homeowner will generally receive less for a house by selecting the professional home-buyer option because they are paying for the convenience. Usually, a seller can expect to give up 10% – 20% of their potential proceeds, compared to if they made the repairs themselves and sold the home with a Realtor. While the professional home-buyer route may not be the right fit for every homeowner, it can be an excellent option for those who value ease and convenience.
Overall, it’s challenging to determine precisely how much you will lose by selling a house “as is,” as it will depend on several factors. In general, however, you can expect to receive less for a house sold “as is” condition. If you want to know your options or receive a free preliminary estimate on your home, do not hesitate to reach us at (908) 547-0404. You can also submit your information through our website, and we will reach out to you with more specific numbers on your property.