Which types of homes are sold as-is? Homes sold as-is often need some work or are cosmetically outdated. It’s not a label you’re likely to put on a listing in pristine, move-in-ready condition. As-is sales often attract investors searching for their next flip or buyers seeking a bargain, perhaps on a home in a great location with lots of potential. Hernandez reports California homes selling in distressed, as-is condition have been typically loved and well-worn by one family for many decades. These homes are usually built in the 1970s or later and owned by older baby boomers. “They’ve not necessarily grown out of the home,” says Hernandez, who has 18 years of experience in the market, “but they don’t have the resources to keep up with it.” The result is years of deferred maintenance. What problems do you have to disclose in California? Selling a house as-is in California doesn’t mean sweeping known problems about the house under the rug. Prior to listing your home or requesting an offer, fill out the California Association of Realtors Real Estate Transfer Disclosure Statement so that you know it’s taken care of. According to the document, disclosure of the property’s condition is “in compliance with Section 1102 of the civil code.” The seller also certifies by the close of escrow the property will be in compliance with the State Fire Marshal’s standards for operable smoke detectors and the Health & Safety Codes requiring water heaters to be strapped in place. The form will walk you through documenting what you know about the features of the home, from the TV antenna to the number of remote controls for the garage door and the quick-release mechanisms on bedroom windows. You’ll also be prompted to fill out information about malfunctioning electrical systems, plumbing systems, or other structural components. The form specifically asks the seller to disclose the presence of the following: Hazardous materials such as asbestos Features shared with neighbors, such as common driveways Encroachments/easements Rooms or construction completed without a permit or non-compliant with building codes Flooding or drainage problems Compacted or other fill Settling issues such as slippage or sliding Damage from fire, floods, earthquake or landslide Zoning violations or nonconforming uses Neighborhood noise problems Deed restrictions Homeowner’s association authority over the property Any lawsuits by or against the seller that may affect the property California sellers must also complete an additional disclosure form, the Natural Hazard Disclosure Statement, which shows whether the home is in zones predisposed to earthquakes, flooding, fire, or wildland risks. The Golden State also requires sellers to let a buyer know that information about the location of registered sex offenders is available from local law enforcement agencies and on the state-operated website. California’s disclosure rules are complex. So, the California Association of Realtors created a comprehensive sales disclosure chart. No matter what method you choose to sell your home, it’s required to make these disclosures to the best of your ability. Hernandez says all sellers must complete the Natural Hazards Disclosure and Transfer Disclosure Statement. However, California does allow some exceptions from additional buyer requests for disclosure about certain items. Sellers are exempt from responding to some disclosures if they haven’t lived in the home and/or if they are “transfers by a fiduciary in the administration of a decedent’s estate, a guardianship, conservatorship, or trust except where the trustee is a former owner of the property.” Review your options to sell as-is in California The main options to sell a house as-is include: List as-is with the help of a real estate agent A great real estate agent will provide assistance throughout the process of listing and selling a home as-is. An agent gives simple presentation tips to improve marketing, helps to set an appropriate price that reflects the home’s condition, and works to find a buyer willing and eager to buy your home in its current state. Because he has extensive experience dealing with non-traditional properties, Hernandez works with the owners to maximize the home’s assets — and potential profit — with minimum effort and investment. “We’re not showing it as a distressed home,” Hernandez says. “We’re marketing a previously loved property that needs a little bit more TLC from the next homeowner.” After the home is decluttered and emptied, Hernandez usually provides a punch list of suggested small improvements that make the home appear less dated or worn. For example, he commonly brightens the interior by taking down dramatic, big 1970s/1980s-era valances and window coverings. If the structure seems sound, a coat of paint and new carpet can help freshen up the space. Not only do those relatively inexpensive updates attract buyers, but they also improve the property’s chances of being eligible for financing. Sell directly to a cash buyer Someone needing to sell their home as-is can also work directly with a property investor or house-buying company in lieu of listing on the open market, where it may be difficult to get an offer from a limited buyer pool. We Buy Houses operations buy as-is at a discounted rate and generally seek out homes in need of significant repairs. These companies can help sellers cash out quickly, and many will cover a seller’s closing costs. The level of integrity and customer service you experience can vary, even within an established house-buying company that strives to maintain consistent business standards. This is because many We Buy Houses companies are franchises and often use independent investors or local wholesaling outfits. Your experience greatly depends on the character of the person or group making the offer. If you are considering a cash offer, vet the company thoroughly. Check reviews, read testimonials, and research its presence and performance in the market. And, of course, read the buying agreement carefully before signing. With an as-is sale, it’s important to work with an agent who understands the market, can maximize the sales price with some small fixes, and has the resources to help clients with what they need done. Rich Hernandez Real Estate Agent Close Rich Hernandez Real Estate Agent at The Omni Group- Coldwell Banker Currently accepting new clients Years of Experience 18 Transactions 489 Average Price Point $386k Single Family Homes 335 Steps to list as-is with the help of a real estate agent Find an agent willing to list the home as-is Your choice of real estate agent always matters, especially when selling a property as-is. It’s important to find the right match. You’re looking for an agent who doesn’t shy away from listings that need a little TLC and maybe has a strong network of investor connections. Your agent should also be willing to go the extra mile on marketing. Considering that 77% of buyers won’t consider purchasing a home that isn’t move-in ready, an as-is sale likely has a reduced buyer pool from the start. In looking for an agent to sell a distressed, as-is property, Hernandez recommends seeking a Realtor who has experience with maintenance deferred listings and a well-honed list of auxiliary service providers. For example, Hernandez recently worked with a client who inherited a home when her mother passed away. The client couldn’t bear to part with her mother’s possessions or the property for three years. By the time she decided to sell, the client was in her 70s and had significant physical limitations. Hernandez called upon his network of professionals to help the client sort through the home’s contents and decide which items to keep, donate, consign, or sell in an estate sale. “With an as-is sale, it’s important to work with an agent who understands the market, can maximize the sales price with some small fixes, and has the resources to help clients with what they need done,” explains Hernandez. Beyond just having an idea of what’s best for the seller’s particular situation, Hernandez says that a great as-is agent should be able to provide examples of properties they’ve successfully sold for other homeowners in a similar situation. Consider a pre-listing inspection A pre-listing home inspection is the same as a standard home inspection except that the seller pays for it before listing their home on the market. It may sound like a counterintuitive step for an as-is sale, but getting the inspection results upfront can illuminate any issues that could impact the value of the home and inform an accurate pricing strategy. If a buyer requests further deductions to the price based on their own inspection, you may be able to point to how the estimated cost of certain repairs was already baked into the list price. Hernandez does not recommend the seller pay for a pre-listing inspection. “We already know the property is distressed, and the sellers are going to disclose anything they know about,” says Hernandez. So, there’s no need for the homeowners to further probe the property’s condition. “Buyers can do their own inspection,” says Hernandez, “but the sellers still aren’t going to fix anything.” Price to reflect as-is condition The median sales price for homes in California hit $886,560 in July 2024, a 6.5% increase from the same period last year. Hernandez says that homes sold as-is in the area typically sell for 20%–30% less than regular listings. Some of the top factors that impact the value of an as-is listing in California are clear signs of deferred maintenance, including: You can start with a free estimate from HomeLight’s Home Value Estimator (HVE). Our HVE combs public data, including tax records and assessments, and pulls recent sales records for other properties in your neighborhood. Using a short questionnaire, we also factor in specifics about your home, such as the property type and described condition. Input your address, and we’ll provide you with a preliminary home value estimate in under two minutes. What’s Your California Home Worth? Get a near-instant real estate house price estimate from HomeLight for free. Our tool analyzes the records of recently sold homes near you, your home’s last sale price, and other market trends to provide a preliminary range of value in under two minutes. Do ever-so-light preparations Even for as-is home listings in California, Hernandez typically recommends sellers complete the following: Declutter and/or vacate: Empty the house of all possessions so you can see the condition of every square inch of the space and make simple, inexpensive improvements. Clean: Removing dust, spider webs, and dirt not only improves the appearance but also helps prep the home for work to be done by the seller or buyer. Paint: If the house is structurally sound, a fresh coat of paint makes a great impression on buyers and their lenders. Carpet: Rip out stinky, stained old carpet. If possible, replace with new cost-effective floor coverings, which can make the house not only more attractive but also habitable. Landscape: Buyers can’t appreciate the architecture of your house if they can’t see it or get to the door. Trim overgrown plants, mow the yard, and invest in some seasonal color, either planted in the ground or displayed in a few well-placed pots. Address simple things that involve the senses: While most buyers begin their property search online, their in-person experience can seal the deal or break it. So, any cost-effective improvements to heighten the way the property looks, smells, or feels are a good investment. “You’re going to be moving anyway, so first declutter and clean,” notes Hernandez. If the property doesn’t need a big overhaul, Hernandez says his top three priorities are landscaping, painting, and carpeting. “I want to make sure we’re getting a return on investment,” Hernandez says. “Can I get $1.25 or more for every $1 I put in?” Besides generating the biggest bang for the buck, Hernandez says, “If the home is not in bad shape structurally and the sellers invest in minimal yard work, new paint, and carpet, then buyers can get financing and live in the home while they fix it up.”
