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There’s a lot of misinformation out there about the differences between an as-is offer for a home and a traditional retail sale offer. Since we often purchase homes as-is, we thought we’d share how our offers compare to traditional retail sale offers, to give you a better picture of the differences between the two.

In case you’re new to the term as-is sale, it’s good to know that it’s a sale where you and the buyer agree to a price for your home exactly as it already is.  No repairs, no cleanup, and no hassle. An as-is sale is very different from a traditional sale, which is why it’s helpful to see where the price differences in your offer come in. Here’s a point-by-point comparison of as-is home sale offers and traditional retail sale offers so you know which is best for you when you’re ready to sell your house:

Traditional Sale vs. As-Is Sale For Cash: The Complete Breakdown

If you’re ready to sell your home, and think an as-is sale for cash might be the option for you, reach out to the Hometown Development team. We’re here to work with you, on your timeline, to get the most value out of your home sale and get on with the rest of your life.

Selling Fees

There are a number of fees associated with a home sale, from closing costs to title transfer, and even paying your realtor. Let’s look at how those fees differ between the two offers:

Traditional Sale

In any home sale, you have to have a title company work to transfer the title of the home to the new owner. In a traditional sale, the process is a little more complicated, since your buyer is purchasing the home with a loan from the bank. You’ll need to pay title insurance, transfer taxes to your state or county, and title closing fee. You’ll also have to pay the title company to do the work. Other costs associated with a traditional sale include:

HOLDING COSTS – During the closing process, which can be anywhere from 60-90 days, you are responsible for all property taxes and insurance fees that accrue. These are called holding costs because they’re costs that accrue while you’re holding the home for the new buyer.

REALTOR COMMISSION – When you list your home on the market, you hire a realtor. At the end of the process, your realtor will take a percentage of the sale prices as commission. If you sold your home for $125,000, your realtor would take $7,500 of that as their commission.

As-Is Sale

In an as-is sale, you still have to pay for transfer taxes and title insurance, but the process is a little less complicated because your offer is in cash. When you work with a real estate investment firm to sell your home for cash, they will waive any additional fees associated with the title company, so all you pay is the cost of the title insurance and transfer taxes. That’s it.

Since you’ll close in as little as 5 days, there are no holding costs. There are also no closing fees. Finally, you don’t need a realtor to sell your home as-is, so you pocket every penny of your cash offer.

Costs to Repair your Home

Traditional Sale

In a traditional sale, any offer you receive that is financed by a loan must have an inspection. Since the people buying your home will take out a loan from the bank to cover their purchase, the bank has to know that they’re making a solid investment.

An inspection will be conducted, and depending on what the inspector finds, you’ll be required to make improvements, which typically average between $20,000-$40,000, but can go much higher depending on the state of your home. You may either complete the repairs yourself, or the estimated cost of repairs can be taken out of the original offer.

As-Is Sale

In an as-is sale, your home is being purchased as-is. Since a real estate investor will be paying in cash, with no help from the bank, they don’t need to have an inspection done. This means you won’t have to make any repairs. Again, all the money from an as-is offer goes straight into your pocket.

Financing Contingencies

To finalize a traditional home sale, the buyer’s lender also requires an appraisal, to ensure that the home is worth however much the buyers have agreed to pay.

Traditional Sale

If the lender’s appraisal comes back as less than what the buyers are offering to pay for your home, the buyers will ask for a concession or price reduction. Without a price reduction, they will be unable to take out a loan for your home and must back out of the sale.

As-Is Sale

In an as-is sale, no banks are involved. The buyer has the money they need to purchase your home on-hand, and they require no loans. As such, they won’t have the home appraised, and will simply pay you for the agreed upon price.

Time to Close

Depending on your situation, the time to close is an important aspect of a home sale. If your home is in danger of foreclosure or if you need to move to a new location quickly you may not have time to wait around for your home to close. Here’s the difference between the two sale options:

Traditional Sale

In a traditional sale, it can take anywhere from 60-90 days to close on a home. This is because all of the details of the sale must be taken care of and because your buyer must secure a loan that will cover the cost of the home. There’s a number of details to iron out, and even if your home moves off the market immediately, the closing process in a traditional sale takes time.

As-Is Sale

You can name your closing date. Again, because an as-is sale is a direct transaction done between you and the buyer, with no middlemen or unnecessary paperwork, it can be done quickly and on your timeline.

The Offer

In both sale situations, traditional and as-is, you’ll receive an offer for your home. Let’s say your home was worth somewhere around $125,00 on the market.

Traditional Sale

It’s important to remember that when you sell your home on the market, all of that $125,000 won’t go into your pocket. You’ll have to pay for:

  • Transfer Taxes and fees
  • Title Insurance and fees
  • Closing Fees
  • Realtor Commission
  • Repairs and Renovations
  • Holding costs
  • Financing Contingency

And you’ll have to wait 60-90 days to see your money. All of those fees and costs added up will bring the money you actually pocket down to around $85,000.

As-Is Sale

If your home is worth $125,000 on the market, you’ll likely see as-is offers around $85,000. While this looks lower than that $125,00, remember that the only things you pay for are:

  • Cost of Transfer Taxes
  • Cost of Title Insurance

And you get money in your pocket in as little as five days. No repairs, no realtor commissions, no closing fees, just money to you, for your home, quickly.

Bottom Line

In the end, the money you get from an as-is sale is fairly comparable to what you end up with at the end of a retail sale. The money you save in repairs, fees, and most importantly, time, make an as-is sale and cash offer an attractive alternative. Best of all, you can close in as little as 5 days, helping you move on quickly, with plenty of money in your pocket.

Still not sure which type of sale is best for you? Request a personalized comparison today. We’ll provide you with a customized breakdown of our offer versus what you’d get from a traditional offer. You’ll be able to see line-by-line the pros and cons of each option based on the market value of your home.

Request Your Personalized Comparison

Does an as-is sale seem like the right option for you? Give Hometown Development a call! We’re a local real estate investment company with roots in West Michigan. We pride ourselves on making fair, cash offers to homeowners based on the real market value of their home. If you’re ready to sell your home, we can help.

Contact us online, or call our office at 616-379-3090 for your cash offer today.