How Much Do You Lose Selling House As is In Washington

What Does It Mean To Sell a House As-is?

Selling a house as-is means putting it up for sale sans repairs or renovations. It can be as simple as packing your things in boxes, getting rid of the clutter of daily life, and then listing the property.

There are many reasons why a seller would sell as is in Washington State, and chief among them is that the house is in disrepair and the seller doesn’t have the funds to cover the costs. Another reason is that the house was foreclosed and is now owned by the lender, and lenders generally want to get rid of the property by selling it as soon as possible to recoup their costs. Alternatively, the original owner may have died and left it to the heirs, who then decided to sell.

But whatever the reason, when the property is listed as-is, buyers already expect to do some repair or rehab work before it can be fully habitable. According to a 2023 Home Spending report, Americans spent an average of $13,667 for renovations and repairs, corresponding to a 6% increase compared to 2022. From this, it can be concluded that there is a growing market for fixer-uppers since more and more owners are willing to do the renovations themselves.

But therein also lies the catch: since these buyers accept the property in whatever condition it’s in, they also accept the risks that come with it. And this acceptance comes at a price, which is typically why as-is properties generally sell for less than their move-in ready counterparts.

• Will I Lose Money if I Sell My House As-is?
• Pros of Selling As Is
• Drawbacks of Selling As Is
• How Much Profit Do You Miss Out On When Selling As is?
• Tips and Things to Consider When Selling Your Home As is
• What Are The Options in Selling a House As-is?
• Final Thoughts:  How Much Do You Lose Selling a House As is

Will I Lose Money if I Sell My House As-is in Washington?

If you’re selling as-is, it’s exceptionally rare to get market value for it, so just basing off the financial criteria alone, it would definitely look like you’re set to lose money. But then, since you’re not waiting for rehab works to finish before you can sell, you get money into your pocket faster. And for many people, time saved is as good as money saved, so you don’t necessarily lose selling your Washington home as is.

Factors that Influence your Home’s Selling Price

Calculating how much money you miss out on when you sell your house as is can be complicated. You can’t lose money you haven’t earned yet, after all. So instead, let’s delve into the factors that influence your home’s sale price so you’d have an idea what to do to increase it somehow.

Property’s Condition

Your asking price leans heavily on your home’s present physical condition. If your home is reasonably well-kept and there aren’t any structural issues or health hazards present, you can sell it for a good price–sometimes, it can be for more than its current market value, depending on other factors further down this list.

Needless to say, if a home requires major repairs or is close to being a tear-down, expect to receive lower offers for it.

Prospective Buyers

Some buyers, generally first-time homeowners, look for a home they can readily move into, and are thus turned off by the amount of work that an as-is property might need. On the other hand, there are buyers who specifically seek out problem properties because it presents an opportunity to gain instant equity by doing the repairs themselves.

Real estate investors and house flippers in Washington belong to the second type of buyers. Since they want to grow their money through real estate, homes selling at a discount to their fair market value are attractive. Fixer uppers, when given the proper treatment, can easily sell for multiples of their purchase price, like this California home bought for $199,000 and is now valued at under $1 million.

These buyers pay in cash, close fast, and even pay for closing costs. This is in stark contrast with traditional buyers which take 30 to 45 days to close on a deal here in Washington. You’re also spared from paying commissions to real estate agents since the transaction is directly between buyer and seller. If you’re in a rush to sell, cash buyers are your best bet. Kind House Buyers can buy your house 100% Free; our process is easy and quick, without paying costly fees. If you have any real estate inquiries check out our frequently asked questions or give us a call at (253) 216-2497 !

Improvements

Even if you’re set on selling as is, little improvements can still be done to dramatically increase how much you can make off your home. Replacing busted light bulbs, or giving your windows a simple wash can boost your asking price far more than the amount you spent to make this happen.

Location

When scouting for a property, location plays a big part in a buyer’s decision-making. Living in a home that is well-situated, such as being close to schools, commercial establishments, and offices, leads to a better quality of life. For example, if you have a shorter commute to your workplace, it leaves you with more time to spend with your family.

In addition, if there is a planned or ongoing development in the neighborhood, the likelihood of the property’s value increasing in the next few years rises dramatically, and that potential could be priced in. Buyers would jump at the chance to buy it before they are priced out of the market once the development in the area is completed.

Market Trends

In an extreme seller’s market, there’s hardly any price difference between an as-is sale and a conventional one. Market behavior follows the Law of Supply and Demand such that when there’s a dearth of supply and buyers don’t have a lot to choose from, they tend to get what’s available. 

Pros of Selling As Is

As is home sales in Washington are often marketed as excellent investment opportunities for buyers, so it’s natural to wonder if it can be a winning scenario for the seller too. 

You Save Time

This is probably the biggest advantage of selling as is.

If you sell the traditional way, sprucing up your home is a requirement to attract potential buyers. It can involve more than just staging so it looks good on photos. You may need to fully or partially replace the roof, update the dated kitchen, or give your walls a fresh coat of paint. All this takes time and energy, which you may not have.

When you sell as is, all you need to do is put it on the market or hire a realtor to list it on the MLS and wait for offers to come in.

At the end of the day, you can sell quickly because your prospective buyer is cognizant of the risks associated with buying an as-is property, hence they have already priced that in their offer. Discussion on possible repairs won’t be part of the negotiation anymore.

You Save Money on Repairs

Since you’re not repairing anything, there’s no need for you to dip into your savings or take out a loan to pay for the rehabilitation work. In this way, you avoid the strain on your finances and you can focus your energy in finding a buyer.

You Avoid Stress

Much like a doctor’s diagnosis after your annual physicals, a home inspector’s report can be equally worrying. The inspection report would tell you everything that needs to be repaired, and afterwards, you’ll need to shop around for contractors who can do the job. Vetting the legit contractors and those who’re only after a quick buck is a whole other and equally stressful ballgame. And then, after you hire a firm, you still have to check on them from time to time to see if the works are proceeding smoothly. And after, everything is said and done, there’s another massive job of cleaning and staging the house for the sale.

Selling as-is allows you to dodge all the stress, headaches, and hassles of renovations.

Drawbacks of Selling As Is

You Have a Shallower Buyer Pool

The majority of first time homeowners, which comprise 32% of the buyer pool in 2023, generally want move-in ready homes. And because you’re selling an as-is property, which likely needs repairs, you can bid these potential buyers goodbye.

Additionally, buyers who are dependent on financing may find it impossible to get a loan approved on a fixer-upper, so they’re off your buyer pool as well. That is, unless they can get approved for a government-backed FHA 203(k) loan.

And now, your buyer pool is restricted to cash buyers such as investors, flippers, and cash offer companies, so your marketing efforts will be geared towards them.

You Will Settle for Less than the Market Value of Your Home

When buying real property as-is, the buyer accepts everything warranty free. This brings with it a lot of risk because certain issues in the property can quickly snowball into something expensive which can decimate the projected profit margins of the investor. Thus, the buyer would definitely try to drive the price down to factor in the repair value and added contingencies to ensure profitability.

How Much Profit Do You Miss Out On When Selling As is?

Most real estate professionals, such as developers and investors, use the so-called 70% rule to determine whether a property is worth investing into. According to the rule, an investor must pay no more than 70% of a property’s After Repair Value (ARV) net of repairs.

To illustrate, say we have a house with an ARV of $200,000. The cost to repair and renovate is estimated to be $50,000. This value will be deducted to the ARV, and 70% of that amount will be the investor’s cash offer, which is 70% of $150,000 = $105,000.

Now, let’s see how this offer holds up against you doing the repairs yourself, so you shell out the $50,000 necessary, so you list the property at its ARV of $200,000. You also choose to hire a real estate agent, and therefore they’ll be entitled to a 6% share ($12,000) of the selling price. And since this is a conventional sale, you will pay for the closing costs, which can be up to 3% of the ARV ($6,000). Summing it all up, we have:

$200,000 – $50,000 (repair costs) – $12,000 – (commissions) – $6,000 (closing costs) = $132,000

Comparing the two ($105,000 vs. $132,000), you lose about 20% of what you could have made when selling as is versus doing the repairs yourself. But then, considering the effort and money you need to spend to earn that 20%, it’s up to you to decide if it’s worth it.

Tips and Things to Consider When Selling Your Home As is

Have Your Home Professionally Inspected

Selling as-is doesn’t absolve sellers of the responsibility to disclose, even in states where it isn’t required.

Refusing to disclose known issues is a lawsuit waiting to happen when it is inevitably discovered later on. Additionally, you can’t stop a buyer from doing their own inspection, and this could result in a loss of trust between both parties if they discover that you haven’t been honest with them.

And while it’s understandable that you may not be aware of all possible issues, especially if you don’t live in the property you’re selling, it’s recommended to have the property inspected by a professional. It costs $340 on average, and is well worth the cost because the inspection could alert you to the presence of mold, asbestos, lead, or other health hazards. The inspector will also look at all your major systems such as your electrical wirings and sanitary pipings. 

When all its flaws are laid out, your inquiries are sure to come from serious buyers who have the capability and willingness to undertake the necessary repair and renovation works.

On the flip side, an inspection can also tell you if everything is in good working order, which is essentially an endorsement and can be a boon to your asking price.

Get a Cost Estimate for Repairs

The inspection report gives you a complete picture of all the work your house may need, whether it’s a major repair involving the HVAC system, or minor ones such as replacing a faulty door knob or a leaking faucet. Using this, you can get in touch with contractors and request quotations from them.

Here are the price ranges of some repair works done by owners prior to selling a property:

Minor repairs: exterior repainting works ($3,000) and landscaping ($9,000)

• Moderate repairs: kitchen remodel ($35,000-$70,000)
• Major repairs: extensive foundation repair ($15,000-$50,000) and roof replacement ($11,500 but can be up to $80,000 depending on the material)

Declutter and Deep Clean

Even if you can’t spare the few thousand necessary for a new paint job, you can try pressure-washing your home’s exterior. Washing away grime and years’ worth of dust off your facade can make it look like new.

And, as mentioned above, simply cleaning your windows to let in the sunlight can work wonders when you’re taking photos of the interior. If you present your house well, you can bump your asking price a little bit, even if you’re selling as-is.

Set a Realistic Price

As a seller, naturally you’d want to get the most revenue out of the sale. However, setting a price is a balancing act. Pricing too high and you run the risk of having your prospects run in the opposite direction without ever setting eyes on your property; however, pricing too low could mean a loss on the money you could have made. 

Generally, you want to sell your Washington house for a price you’d be able to afford your next home (or, at the very least, the downpayment), plus the moving costs, especially if you’re moving to another state.

To accomplish this, here are a few ways to determine your selling price:

Comparative Market Analysis (CMA)

Doing a Comparative Market Analysis is also known as “running comps”, and involves looking at comparables–that is, recently-sold properties in your area that are roughly similar to yours in size and features–to establish a baseline in pricing your house.

This calls for a bit of research and some legwork since you may need to ask around the neighborhood.

Alternatively, if you’re working with a real estate agent, a CMA is part of their job description.

Home Appraisal

If you have no prior experience with real estate, or if you’re not confident in doing the CMA yourself, why not call in the pros?

An appraisal is a professional opinion on your home’s fair market value. The licensed real estate appraiser calculates the property value based on the following factors:

• Market conditions: buyer’s or seller’s market?
• Area: is it in a nice part of the town?
• Property Data: age, total floor area, number of bedrooms and bathrooms, upgrades done, and physical condition.

It costs between $350-$600, something you can easily make back since you’ll never end up underpricing your home.

If you are looking to sell your house fast for cash, Kind House Buyers offers a seamless and stress-free selling experience. We buy houses on a timeline that aligns with your needs, eliminating the hassle of repairs, renovations, open houses, or costly fees, our services are entirely free. To get started, contact us today at (253) 216-2497 . For more information visit our about us page or check out our testimonials to see what our happy clients say.

Focus on the Positives, But Don’t Forget the Negatives

See the appraisal criteria above? That should clue you in what features of the house you can emphasize in the listing. For instance, an open floor plan remains popular, so if you’ve got that, don’t be shy about it! You can also accentuate other unique selling points such as your property’s proximity to parks, schools, and the like.

On the other hand, since you’re selling as is, your home is definitely going to have its flaws. It’s important to mention them, not only to comply with the disclosure laws, but also to ensure you’ll get serious inquiries because your potential buyers will know what they’re signing up for.

What Are The Options in Selling a House As-is?

Sell through a realtor

When selling through an agent, you’re going to be required to do some minor repairs and improvements so they can market your house effectively. An inspection will also be called so you won’t be caught flat-footed when your buyer opts for one. To illustrate, let’s say your home has a list price of $300,000. Let’s see how much remains after all expenses and commissions are taken out:

• inspection: $300
• repainting: $3,000
• commission: $18,000
• closing costs: $9,000
• other costs (staging and minor yardwork): $3,000

Your total expenses are $33,300. On top of this, the buyer estimated repair costs to be $20,000 and asked that this be discounted.

You end up with $246,700 after selling with a realtor.

Sell to a cash buyer

When selling to investors, you can truly sell everything “as is, where is”. Even if your house is close to being a teardown, you probably won’t scare them away; some of them even seek out distressed properties, eager to return them to their former glory.

According to a University of California study in 2023, cash buyers pay 11% lower than mortgaged buyers. And while you’ll be forced to accept a lower offer, cash buyers are generally sure buyers, eliminating the risk of you being left in the lurch. They also close quickly because they’re chasing after fast returns on the money they’ve put out.

For a conservative estimate, using the same example, let’s say an all-cash buyer gives you an offer for 80% of your list price. That’s an instant $240,000 for you! No inspection is needed, and you don’t pay for the closing costs, so the entire offer is yours to keep.

Final Thoughts:  How Much Do You Lose Selling a House As is

There’s no formula to calculate exactly how much you lose when selling your house as-is. Sometimes, you’ll have no choice on the matter, especially if you cannot afford the repairs; or maybe, even if you can’t afford it, you find that your time and energy is in short supply. In any case, there are ways to mitigate the potential financial loss, as outlined above.

And, although you generally take home less money from an as-is home sale, you can’t deny that it is more convenient for you. Come to think of it, the difference isn’t all that much after all.

Thinking of selling your property as-is? Here at Kind House Buyers, we buy all kinds of homes in absolutely any condition! You don’t have to be self-conscious about the state of your house–in all our years in business, we’ve seen it all!

You also don’t have to do anything else except fill in our form below with your phone number, property address, and email to get our cash offer delivered straight to your inbox!

Our services are available throughout Washington, including Everett, Olympia, Seattle, Spokane, Tacoma, Vancouver, Yakima and many other cities! Curious to know about our process? Call us at (253) 216-2497 , look for Keith or Krixelle and we’d be glad to help!

Additional Resources To Help Sell Your House In Washington