Take my house, please
January 13, 2010 1:44 AM Subscribe
Selling a house "as is" -- how do we do this?
So, I'm in the running for a dream job on the opposite coast. Mr. Libraryhead can work remotely. If the offer comes in, we'll be packing our bags. Only, we have to get out of this mortgage first.
We own a single-family house in a high-priced suburb of Boston. We were underwater for a while, but values are back up recently, and Zillow says it's now worth roughly what it was when we bought in 2006. (Their estimate for the value is about 10% more than we actually paid, as it was in 2006.) So far so good. Except, some maintenance issues have cropped up recently, and I'm not sure how to handle a sale with them in mind. Specifically, the exterior of the house needs to be painted and there's a decrepit in-ground swimming pool that most likely needs to be removed. There's no way this work can be done till spring, and I don't want to wait that long to put it on the market. (There are also some minor problems inside, but we can fix those.)
Most likely we'll contact a realtor once we're sure the move is on, but first I'd like to try getting the word out in our local network, and that means we need an asking price.
Bottom line, we're not looking to make any money on the deal. If we come out with our little bit of equity intact, that would be great, but I'm more concerned with getting out fast. We couldn't afford to pay the mortgage + rent on a west coast house for long.
With the cross-country move, I'd be happy to throw in the appliances, a lot of furniture, even the (42-inch flat screen) TV. Would this be a plus? or more of a PITA?
Advice please!
So, I'm in the running for a dream job on the opposite coast. Mr. Libraryhead can work remotely. If the offer comes in, we'll be packing our bags. Only, we have to get out of this mortgage first.
We own a single-family house in a high-priced suburb of Boston. We were underwater for a while, but values are back up recently, and Zillow says it's now worth roughly what it was when we bought in 2006. (Their estimate for the value is about 10% more than we actually paid, as it was in 2006.) So far so good. Except, some maintenance issues have cropped up recently, and I'm not sure how to handle a sale with them in mind. Specifically, the exterior of the house needs to be painted and there's a decrepit in-ground swimming pool that most likely needs to be removed. There's no way this work can be done till spring, and I don't want to wait that long to put it on the market. (There are also some minor problems inside, but we can fix those.)
Most likely we'll contact a realtor once we're sure the move is on, but first I'd like to try getting the word out in our local network, and that means we need an asking price.
Bottom line, we're not looking to make any money on the deal. If we come out with our little bit of equity intact, that would be great, but I'm more concerned with getting out fast. We couldn't afford to pay the mortgage + rent on a west coast house for long.
With the cross-country move, I'd be happy to throw in the appliances, a lot of furniture, even the (42-inch flat screen) TV. Would this be a plus? or more of a PITA?
Advice please!
Personally I'd do everything I could to get the problems fixed. You'll lose considerably more on the selling price of the house because of these obvious cosmetic failings than you would spend on putting them right. A house that is ready to move into with no work is always going to attract more interest.
But assuming that you've tried everything and can't get the work done, my approach would be to at least get some competitive written quotes for the work and make sure they're presented to any prospective buyer; that way, you can essentially say "The house will be worth x with this work done, which costs y, so I'm asking for x-(y+z)", where z is some reasonable discount you're willing to offer to offset the hassle of the new owner having to arrange to get the work done.
Throwing in appliances is always a good thing, provided they're in good condition and reasonably new. It won't hurt to offer furniture too, but be prepared to get rid of it if the realtor thinks it's not going to help your sale.
posted by le morte de bea arthur at 3:38 AM on January 13, 2010 [1 favorite]
But assuming that you've tried everything and can't get the work done, my approach would be to at least get some competitive written quotes for the work and make sure they're presented to any prospective buyer; that way, you can essentially say "The house will be worth x with this work done, which costs y, so I'm asking for x-(y+z)", where z is some reasonable discount you're willing to offer to offset the hassle of the new owner having to arrange to get the work done.
Throwing in appliances is always a good thing, provided they're in good condition and reasonably new. It won't hurt to offer furniture too, but be prepared to get rid of it if the realtor thinks it's not going to help your sale.
posted by le morte de bea arthur at 3:38 AM on January 13, 2010 [1 favorite]
If that's all that's wrong, put it on the market and see what offers you get. I've sold a house with lots more wrong with it. (What we did was pay for our own inspection and have the report available for buyers to see.)
Is the exterior painting at all something you could handle? If so, maybe do that, since flaking paint could give a bad impression. I wouldn't worry about the swimming pool-- it'd likely cost more to fix than it impacts the price.
Getting the furniture would probably be a hassle rather than a plus; people have all too much of their own. But appliances are nice. (I moved to Massachusetts a few years back and was surprised that appliances don't always come with the house... they do in Illinois.)
posted by zompist at 3:45 AM on January 13, 2010
Is the exterior painting at all something you could handle? If so, maybe do that, since flaking paint could give a bad impression. I wouldn't worry about the swimming pool-- it'd likely cost more to fix than it impacts the price.
Getting the furniture would probably be a hassle rather than a plus; people have all too much of their own. But appliances are nice. (I moved to Massachusetts a few years back and was surprised that appliances don't always come with the house... they do in Illinois.)
posted by zompist at 3:45 AM on January 13, 2010
I'm not sure of the laws in your state, but logic would dictate that as long as you spell out all of the needed repairs there shouldn't be any issues w/ liability after the sale. I've known people who have sold their houses furnished for an increased price, so it is possible to list it as such (i.e. house for sale $300K; furnished $350k). Leaving just appliances and not furniture is very common as well.
posted by melissasaurus at 5:27 AM on January 13, 2010
posted by melissasaurus at 5:27 AM on January 13, 2010
If all else fails and you really really can't do cosmetic stuff which (as others have said) will greatly improve the look and feel of the place, think about marketing the property as a "renovator's dream" or similar.
In which case, space, ease of conversion, neighborhood, access to good schools etc become more important. Think about preparing a pack and informing yourself fully on how great the house is because of its location.
I'd also consider mocking up some basic plans for what you really wanted to do, so that your story becomes less of "our house is a bit crap, but we really need to move" and more "we had great plans and it's such a wrench to have to move before we saw them through."
In sales negotiation, weakness is a discounting opportunity. However, it's also true that - as anyone who's not been able to walk away from a determined seller in a Middle Eastern souk knows - people do buy because they empathise with the seller and want to help them, regardless of whether they rationalise it to themselves like that.
If you feel your furniture etc is a bonus to prospective buyers then use it as a negotiation tool once you get onto price. Don't casually mention that you'd be happy to let them go if someone bought the property because any buyer will mentally factor them into whatever price they have in mind.
posted by MuffinMan at 5:35 AM on January 13, 2010
In which case, space, ease of conversion, neighborhood, access to good schools etc become more important. Think about preparing a pack and informing yourself fully on how great the house is because of its location.
I'd also consider mocking up some basic plans for what you really wanted to do, so that your story becomes less of "our house is a bit crap, but we really need to move" and more "we had great plans and it's such a wrench to have to move before we saw them through."
In sales negotiation, weakness is a discounting opportunity. However, it's also true that - as anyone who's not been able to walk away from a determined seller in a Middle Eastern souk knows - people do buy because they empathise with the seller and want to help them, regardless of whether they rationalise it to themselves like that.
If you feel your furniture etc is a bonus to prospective buyers then use it as a negotiation tool once you get onto price. Don't casually mention that you'd be happy to let them go if someone bought the property because any buyer will mentally factor them into whatever price they have in mind.
posted by MuffinMan at 5:35 AM on January 13, 2010
There are lots of houses in my area (which is not your area) that are being offered as-is right now. (A lot of them seem to be estate sales or elderly owners who can't afford to do the repairs.)
The key for me, as a prospective buyer, to be comfortable with this is to feel like I know exactly what "as-is" means for this particular house. You think it's only the paint and the pool (and the pool can be a pretty huge turn off depending on the buyer - e.g., if it's in such disrepair that it needs to be filled in, would a family with young kids even look at the place? OMGDEATHTRAP!), but until you have the house inspected, you really can't know for sure. So yes, pay for your own inspection and make the results available. But also be prepared for buyers to want to give your place their own extra scrutiny, and adjust their offers based on *their* inspections, estimates, and appraisals.
Plus, in the case of the pool, you're telling buyers that there will be a known (sizable?) out-of-pocket expense coming up almost immediately. If I were to buy your place, I wouldn't necessarily have that kind of money lying around after I had just made a down payment. So perhaps think in terms of concessions instead of just discounts. Slightly higher offer price, but you give the buyer money back so that they have the cash to do the repairs.
As to furniture, yes to appliances and no to everything else (unless a buyer specifically inquires about your spiffy TV/couch/armoire and would that possibly convey?). No matter how nice you think your furnishings are, the buyer will almost cetrainly want to get rid of some portion of it (that rug has got to go), and has now essentially paid you to dispose of your stuff.
IAJAPB (I am just a prospective buyer). A good seller agent is going to know so much more about your options. Find one soon.
posted by somanyamys at 5:58 AM on January 13, 2010 [1 favorite]
The key for me, as a prospective buyer, to be comfortable with this is to feel like I know exactly what "as-is" means for this particular house. You think it's only the paint and the pool (and the pool can be a pretty huge turn off depending on the buyer - e.g., if it's in such disrepair that it needs to be filled in, would a family with young kids even look at the place? OMGDEATHTRAP!), but until you have the house inspected, you really can't know for sure. So yes, pay for your own inspection and make the results available. But also be prepared for buyers to want to give your place their own extra scrutiny, and adjust their offers based on *their* inspections, estimates, and appraisals.
Plus, in the case of the pool, you're telling buyers that there will be a known (sizable?) out-of-pocket expense coming up almost immediately. If I were to buy your place, I wouldn't necessarily have that kind of money lying around after I had just made a down payment. So perhaps think in terms of concessions instead of just discounts. Slightly higher offer price, but you give the buyer money back so that they have the cash to do the repairs.
As to furniture, yes to appliances and no to everything else (unless a buyer specifically inquires about your spiffy TV/couch/armoire and would that possibly convey?). No matter how nice you think your furnishings are, the buyer will almost cetrainly want to get rid of some portion of it (that rug has got to go), and has now essentially paid you to dispose of your stuff.
IAJAPB (I am just a prospective buyer). A good seller agent is going to know so much more about your options. Find one soon.
posted by somanyamys at 5:58 AM on January 13, 2010 [1 favorite]
I would not sell the house "as is" - that is a loaded term, and generally implies that there are things wrong with it that you are not willing to fix and possibly disclose. It puts the onus on the buyer to find problems.
I think the message you want to send (if it's true) is "The house is in good shape and we'll stand behind it in an inspection, but there are a few defects we are aware of. It's not possible to fix those defects during the winter, so we'll give the buyer a credit to fix them." Providing estimates (as mentioned earlier) would help as well.
As to the furniture, I'd say include the appliances and have your agent mention that the furniture could be included and is negotiable. That's what we did - the buyers ended up paying a few hundred extra for some pieces that were perfect for the spaces they were in.
posted by true at 6:19 AM on January 13, 2010 [1 favorite]
I think the message you want to send (if it's true) is "The house is in good shape and we'll stand behind it in an inspection, but there are a few defects we are aware of. It's not possible to fix those defects during the winter, so we'll give the buyer a credit to fix them." Providing estimates (as mentioned earlier) would help as well.
As to the furniture, I'd say include the appliances and have your agent mention that the furniture could be included and is negotiable. That's what we did - the buyers ended up paying a few hundred extra for some pieces that were perfect for the spaces they were in.
posted by true at 6:19 AM on January 13, 2010 [1 favorite]
You should also be wary of what an as-is sale does to your list of potential buyers. Anyone hoping to get in on the $8K first-time-buyer credit is probably going to be financing with some sort of first-time-homebuyer loan, and many of those have really strict rules about the condition the house can be in. When we were looking this summer, we saw a couple of places whose realtors basically told us "FHA won't sign off on this, sorry" and sent us on our way. Their due-diligence people have been known to delay closings until the seller takes care of something that seems really trivial on its face (poor condition of exterior paint, trifling issues with the chimney, etc.).
Also, true has it exactly right. "As-is" is a really loaded term in a market full of houses that the owner has walked away from and that have been quietly decaying ever since. You can lay out the parameters of what you will and won't stand behind in your P&S, and the two major items that you've mentioned are both weather-dependent, and thus aren't likely to raise a lot of red flags with potential buyers.
posted by Mayor West at 6:30 AM on January 13, 2010
Also, true has it exactly right. "As-is" is a really loaded term in a market full of houses that the owner has walked away from and that have been quietly decaying ever since. You can lay out the parameters of what you will and won't stand behind in your P&S, and the two major items that you've mentioned are both weather-dependent, and thus aren't likely to raise a lot of red flags with potential buyers.
posted by Mayor West at 6:30 AM on January 13, 2010
We sold a house eight years ago that needed a lot of minor repairs and cosmetic work--interior painting, new flooring in some rooms, that kind of thing. We were able to do it because we were in a very desirable neighborhood where houses didn't come on the market very often; the buyers were willing to take the house in the shape it was in in part because there wasn't a comparable house in the neighborhood but in better shape, if you know what I mean. If you are competing with similar houses on the market, in similar neighborhoods, that don't need big-ticket maintenance jobs right away (the painting and the pool), it may be very hard to do.
Your real estate agent is the one who can help you figure out how to approach this so that the house sells, whether that's pricing it carefully, offering some money toward those repairs, offering to pay buyers' closing costs... The agent is out there buying and selling houses right now, in this market, and knows what people are looking for, and what incentives might help them want your house.
Personally, as a buyer I would see a decrepit pool as a problem I was not willing to take on. There would have to be something really extraordinary about the house for me to do that. One way you might help a buyer like me decide it was OK would be to have estimates, as someone said up-thread, so I would know exactly what I was getting into (and those estimates should include removing/filling the pool, and remediating the yard afterward). Or to offer cash at closing specifically toward that expense.
posted by not that girl at 6:32 AM on January 13, 2010
Your real estate agent is the one who can help you figure out how to approach this so that the house sells, whether that's pricing it carefully, offering some money toward those repairs, offering to pay buyers' closing costs... The agent is out there buying and selling houses right now, in this market, and knows what people are looking for, and what incentives might help them want your house.
Personally, as a buyer I would see a decrepit pool as a problem I was not willing to take on. There would have to be something really extraordinary about the house for me to do that. One way you might help a buyer like me decide it was OK would be to have estimates, as someone said up-thread, so I would know exactly what I was getting into (and those estimates should include removing/filling the pool, and remediating the yard afterward). Or to offer cash at closing specifically toward that expense.
posted by not that girl at 6:32 AM on January 13, 2010
Best answer: You can certainly remove the inground pool immediately. It's really just a couple guys with jackhammers, a bobcat and a dump truck to haul debris/bring in new fill.
You can advertise the house as including an $x,000 allowance for new paint. The furniture I would sell on craigslist. Everyone's got furniture, and unless yours is particularly nice, it'll be a pain for the buyers to get rid of.
The appliances almost always convey with the house, as will the TV if it's mounted on the wall.
posted by electroboy at 6:42 AM on January 13, 2010
You can advertise the house as including an $x,000 allowance for new paint. The furniture I would sell on craigslist. Everyone's got furniture, and unless yours is particularly nice, it'll be a pain for the buyers to get rid of.
The appliances almost always convey with the house, as will the TV if it's mounted on the wall.
posted by electroboy at 6:42 AM on January 13, 2010
Be prepared to sell it for less than you think. I'd get estimates for painting and for repairing/removing the pool, and point out that the price reflects those anticipated costs.
I think the tv would be a plus, probably not the furniture. Have a big sale. Take good pictures, sell on craigslist.
posted by theora55 at 7:01 AM on January 13, 2010
I think the tv would be a plus, probably not the furniture. Have a big sale. Take good pictures, sell on craigslist.
posted by theora55 at 7:01 AM on January 13, 2010
Why wait to talk to a real estate agent? You'd be under no obligation to list with them right away, or ever. Let them advise you as to whether an "as is" sale is feasible for your particular property. Also, Zillow is highly unreliable (according to real estate agents I've talked to). An agent will be able to give you a more realistic idea of what your house should list for and what it will sell for.
posted by Wordwoman at 8:33 AM on January 13, 2010
posted by Wordwoman at 8:33 AM on January 13, 2010
There's this kabuki-like nature to the house transaction process, in my experience: you both agree on a price for the purchase and sale. then, there's a round of "oh, my, look at all this stuff wrong with the house that my inspector found. i can't possibly pay this. i want them fixed or $N off the price." "well, okay, you're right, there are problems. we'll fix this subset and knock $X off the price instead." (often $N/2=$X)
so, everything's negotiable. i wouldn't worry about it.
you might want to get estimates for the stuff for your own edification, and so you're negotiating from a position of knowledge, but don't stress to hard about the issues themselves.
posted by rmd1023 at 10:02 AM on January 13, 2010
so, everything's negotiable. i wouldn't worry about it.
you might want to get estimates for the stuff for your own edification, and so you're negotiating from a position of knowledge, but don't stress to hard about the issues themselves.
posted by rmd1023 at 10:02 AM on January 13, 2010
Response by poster: It didn't occur to me that the pool could be taken out immediately. I'm calling for bids now. We'll figure out an allowance for painting and landscaping, but that's not nearly so much of a red flag to potential buyers as the big pit in the back yard. Thanks, everyone for the advice.
posted by libraryhead at 11:55 AM on January 13, 2010
posted by libraryhead at 11:55 AM on January 13, 2010
You don't really need to even remove most of the pool. I'd just demo it to 2 feet or so below the soil surface, punch a few holes in the bottom so it drains freely, then backfill, using the broken up concrete and trucked in backfill to bring it up to grade, with a couple inches of good quality topsoil on top so you can plant grass.
Also, make sure they do some compaction of the backfill, or you'll have a pool shaped depression in the backyard after awhile.
posted by electroboy at 1:58 PM on January 13, 2010
Also, make sure they do some compaction of the backfill, or you'll have a pool shaped depression in the backyard after awhile.
posted by electroboy at 1:58 PM on January 13, 2010
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posted by libraryhead at 1:49 AM on January 13, 2010