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SELLING "AS-IS" - Does That Still Work Today?

Good afternoon from Windy Chicago, Donkeys and Elephants (and assorted other animules) -

The two words for this afternoon - "AS-IS".   If you are a Real Estate Professional, is it wise to use these words to describe your listing?  Home Buyers - how do YOU react when you see these two little words?  Neither buying, selling or working in Real Estate right now - what do these words mean to you?

As a Real Estate Listing Agent, I only use the words "AS-IS" on the MLS and in property promotion and marketing if the property is a burned out home, or an estate sale with no surviving family around to clean and fix it up.  I advise my clients these two little words can have a more powerful NEGATIVE impact than those three famous words - "I Love You!" - have a potentially very POSITIVE impact.

Saying "AS-IS," I explain, implies DESPERATION - that you want to sell at ANY price. "Lowball Me."  It also says the property is in absolutely horrible condition, even if it is not, and that could thwart otherwise-qualified showings.

Some might not even inquire about a showing on an "AS-IS" listing - and Listing Agents would not even know it, because they didn't get the call, email, or website click.

Those that DO make an offer usually make one that touches the sub-basement, and these potential buyers are hesitant to come up on their offering price, because they, again, see desperation.

Buyers - or you civilians in general - do you feel the same?

In today's market here in Chicago and nearby, there is an exploding number of short sale properties (those whose ultimate sales prices will likely be below the outstanding mortgage balance), bank-owned foreclosed properties, and other distressed properties, whose owners may be in the midst of a divorce or other life-rattling event.

As such, many of their Listing Agents warn boldly, "AS-IS".  The sellers, or the lenders, don't even want to entertain later claims for credit or repair during the five-day post-contract inspection period here.

Some of these properties are in rough shape - but some are fine, ranging from somewhat messy, to pristine.  But still, the "AS-IS" tag hangs around their necks!

Often times, in practice,  buyers that do view the properties first offer low - and then ask for repairs ANYWAY!

Ultimately, the question becomes whether using "AS-IS"language in a listing does more harm than good.  If you avoid the two little words in printed advertising and on the MLS, you can still state your "AS-IS" case VERBALLY to the buyer or their agent before or when they present their contract.

But at least you'll get an offer you can react to - rather than a buyer who walked before hand.  A buyer neither you nor the seller will ever know!

Your take on this?  Please share!

DEAN & DEAN'S TEAM CHICAGO

Comment balloon 10 commentsDean Moss • October 26 2008 03:13PM

Comments

My personal take on As-Is is pretty laid back. It isn't a negative to me as long as the seller will allow my buyers to have a home inspection. I don't usually recommend my seller's to use this verbage, but if I see it, I don't go running the other direction. There are so very many reasons that a listing could be sold As-Is. I figure if it is the home for my buyers, we'll write an offer and go from there.

Posted by Alisha Harrison, Allyn, Belfair and Hood Canal real estate expert! (John L. Scott, Belfair) almost 10 years ago

I agree- it all goes along with educating our clients! Many sellers want to list as-is to avoid out of pocket expenses. Many cant afford them. But don't realize that marketing as-is lowers the value of their home by $$$.

Posted by Leah Leighton, Realtor - Long and Foster - Levittown Pa (Long & Foster Real Estate - Levittown- Bucks County Pa) almost 10 years ago

Wooo.  You hit a hot button.

Fact is, in my area, MD and VA, real estate is sold "as is".  It clearly says so in the contract of sale.

However, it is also sold "as is" with conditions or contingencies. 

Putting a big fat "AS IS" in the listing says to my buyers that the home needs a lot of work, when in may, in fact, not need work. 

"As is" is a much abused term.  Sellers like it because they think it means that they don't have to fix anything.  Fact is, sellers never have to fix anything.  Fact also is, buyers can void a contract if the seller doesn't agree to certain requested repairs of defects. 

I don't know why agent insist on chasing buyers away with silly stuff in the MLS. I can overcome it but often homes will be eliminated from a tour just because of silly stuff in the remarks.

The banks believe that using the "AS IS" paragraph and eliminating the "property condition" paragraph means that a buyer is going to take a property no matter the condition.  Nonsense.  With a home inspection, buyers and get significant concessions based on defects found in the inspections.  Or, they don't buy.  Banks have to make a decision.  Of course, they often make the wrong one.

 

 

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) almost 10 years ago

I think you're right on...I hear a lot of feedback from the Realtors I work with that they try to stay away from "as-is" all things considered.

Posted by Loren Johnson, CMPS almost 10 years ago

As Is does not give me a bad impression as a buyer's agent.  As a seller's agent I avoid using the words in the listing.  We can always tell the other agent's verbally or counter back.

Posted by Steve Hewson, Denver Metro Comnulll Real Estate (KW Commercial Real Estate, LLC - Denver) almost 10 years ago

Short sales have to be AS-IS. If there is an issue at walkthru before closing, the seller has no funds for it, the lender will not take less that what they saw on the HUD1. Buyers can still do a home inspection for informational purposes, but not for repairs or a credit from the seller.

Posted by Richard Mielke, REALTOR, Gettysburg Pennsylvania Real Estate (RE/MAX Results) almost 10 years ago

I don't say  "as is" but I have been known to say "in need of TLC" .   We in the business understand that TLC is Time/Labour/Cash   but some of the buying public still reads this as Tender Loving Care! 

Posted by Susan Emo, Kingston and the 1000 Islands Area (Sotheby's International Realty Canada - Brokerage) almost 10 years ago

Hi Dean, Great post!  The words 'as is' can sink an absolutely beautiful home with nothing wrong with it.  I don't care for as is in my listings under any conditions.  I think it scares 95% of buyers, no matter what connatation the seller or list agent intended it to have!

Posted by Sandy Shores FL Realtor®, Melbourne Real Estate, Brevard County Real Estate, Florida's Space Coast (M & M Realty of Brevard Inc.) almost 10 years ago

Hi Dean,

I don't use as-is.  Short sale or REO often will use the term "seller will do no repairs" and of course we disclose short sale, distressed or REO.   I will take a close look at an as-is listing to see if it has the right value for my clients... and of course we always inspect.

List and Sell (and if it's a fixer just say its's a fixer)   Gary @ RentonHomeFinder

Posted by Gary McNinch, Broker, Renton WA Real Estate (Better Properties Real Estate) almost 10 years ago

If the person refuses to update, fix or otherwise take care of problems, then using AS IS is appropriate.  But, we as agents need to remember the rule, the property is AS IS -- AS DISCLOSED.  As an agent you had better disclose it all. ~ Evelyn

Posted by Evelyn Panning (Property Connections Realty Inc.) almost 10 years ago

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