"As-Is" versus "Credit-to-Buyer" versus "Pristine"
January 29, 2008
Real estate agents meeting with potential sellers generally are confronted with a seller's desire to sell "as-is". This can be especially true in a declining market in which a seller as seen the value of the property decrease. The seller feels that making repairs or cosmetically enhances the property is "throwing good money after bad". "As-is" can work if a seller is willing to substantially discount a sale price - often much more of a discount than the real cost of making necessary improvements.
Recognizing that the carpet needs replacing or one of the appliances is out of order, a seller may volunteer to offer a "buyer credit" to cover the broken or outdated items. The argument is that a buyer will wish to choose the color of the carpet or may wish to completely remodel a kitchen, etc. While this argument can be accurate, the credit offered is usually not sufficient in a buyer's mind to cover the costs that they feel will be necessary. The other issue with not making the improvements is that many buyers have a difficult time imaging how the house will look after the improvements.
Then there is the seller who has watched the home improvement network and has learned that "staging" and "updating" will generally be recouped in a faster sale for more money. While the seller may not get the total improvement investment back, the quicker sale will eliminate those mortgage payments and permit the seller to move on.
Obviously, which strategy a seller will select will be influenced by the seller's financial ability. Once a real estate agent has made suggestions as to preparing a home for sale, the next step before making a final choice should be to get estimates from licensed contractors. Having real bids can have several advantages. First, the seller will better be able to decide whether to make the improvements as they may be less costly than anticipated. Second, the seller will be able to show a buyer the bids so that a buyer has a more accurate idea of the actual cost to replace carpet, paint or purchase appliances.
Bottom line, in a declining market such as we are presently experiencing, a quick sale can result in a higher price than might be attainable in a few more months. My experience says that "pristine" will bring the best price.
Real estate agents meeting with potential sellers generally are confronted with a seller's desire to sell "as-is". This can be especially true in a declining market in which a seller as seen the value of the property decrease. The seller feels that making repairs or cosmetically enhances the property is "throwing good money after bad". "As-is" can work if a seller is willing to substantially discount a sale price - often much more of a discount than the real cost of making necessary improvements.
Recognizing that the carpet needs replacing or one of the appliances is out of order, a seller may volunteer to offer a "buyer credit" to cover the broken or outdated items. The argument is that a buyer will wish to choose the color of the carpet or may wish to completely remodel a kitchen, etc. While this argument can be accurate, the credit offered is usually not sufficient in a buyer's mind to cover the costs that they feel will be necessary. The other issue with not making the improvements is that many buyers have a difficult time imaging how the house will look after the improvements.
Then there is the seller who has watched the home improvement network and has learned that "staging" and "updating" will generally be recouped in a faster sale for more money. While the seller may not get the total improvement investment back, the quicker sale will eliminate those mortgage payments and permit the seller to move on.
Obviously, which strategy a seller will select will be influenced by the seller's financial ability. Once a real estate agent has made suggestions as to preparing a home for sale, the next step before making a final choice should be to get estimates from licensed contractors. Having real bids can have several advantages. First, the seller will better be able to decide whether to make the improvements as they may be less costly than anticipated. Second, the seller will be able to show a buyer the bids so that a buyer has a more accurate idea of the actual cost to replace carpet, paint or purchase appliances.
Bottom line, in a declining market such as we are presently experiencing, a quick sale can result in a higher price than might be attainable in a few more months. My experience says that "pristine" will bring the best price.
posted by shirley harry at 9:02 AM
1 Comments:
We purchased 40901 Cheyenne Trail in Beaumont "as is." Problem is the required disclosure wes not adhered to. There were rips in most screens and patio, rain ground water on grass does not drain for up to a week. The inspector reccommended by the agent was not good and missed illegal couplings on gas lines, imprpperly installed plumbing, most elec. outlets were worn and plugs fall out. Two of the 3 patio/carports are big leakers, gutters were filled with pine needles. and, more.
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