Selling a House As Is? Here's How Much You Could Lose

Costs of selling a house as is | Factors that affect your sale price | Is selling a house as is worth it? | FAQs

When it comes to how much you lose selling a house as is, there's really no easy answer. 

If your home is in decent shape and you live in a desirable area, you might attract multiple buyers willing to pay full asking price (or more) for your home. But if your home requires extensive repairs and you need to sell it ASAP, you might only get half its potential worth.

For many homeowners, listing a home in as-is condition is the more convenient choice, even if it results in a lower profit. You can save time and money up front by avoiding repairs and appealing to buyers who can close quickly for cash. 

However, if market conditions favor buyers or you're competing with homes that are fresh and up-to-date, an as-is sale can work against you. This is especially true since buyers will still be able to request inspections and negotiate the price.

To gain some clarity on the financial aspects of selling as is, we asked top listing agents and real estate investors from across the country to weigh in.

Costs of selling a house as is

When considering the costs of selling as is, a lot hinges on your home's location, the specific repairs and updates it needs, the state of the housing market, and the buyers looking to purchase in your neighborhood. Your personal financial situation and the amount of equity you have in your home will also come into play. 

"Fixing up a house does not necessarily have a dollar for dollar return on investment, especially for items like roof, plumbing, etc.," cautions Sammy Lyon, associate broker at Dow Capital in Los Angeles. "In most cases, my advice is to disclose the known issues, let the new buyer do their own due diligence, and be prepared to give a credit for any major repairs."

"Sometimes, less is more when it comes to pre-sale home improvements," agrees Jave Blackburn of WeBuyAnyHouseAsIs. However, the investor cautions that market conditions will also determine whether you make a profit or loss when selling as is. 

"In a seller's market, as-is sales can be more lucrative due to high demand and low supply," says Blackburn. "However, in a buyer's market, making key repairs can significantly increase the home's appeal and value."

When it might make financial sense to sell as is

• If your house needs major repairs and you need to sell ASAP, selling as is to an investor might be your only option — but they may only pay you 50–70% of its potential worth. 
• If demand for homes in your area is particularly high, buyers may be willing to pay a premium regardless of its condition. For example, a study of recent millennial home buyers found that a majority would tolerate mold, leaky roofs, and even asbestos to get into a house.[1]
• If the repairs aren't going to add a lot of appeal for buyers, listing at a lower price and offering the buyers a repair credit may be a better financial decision than putting money in yourself.
• If you have considerable equity in your home, you can still make a profit even when selling as is. Putting money back into the house for enhancements may actually hurt your bottom line — especially if the repairs don't add value or align with buyers' tastes.

When it might make financial sense to make repairs before listing

• If you live in a neighborhood where most of the homes are up-to-date, it may be worth putting in the money up front to bring it in line with the competition and appeal to a broader pool of buyers.
• If your home needs only minor updates to make it move-in ready — and you can afford to make the improvements — your efforts may offer you a worthwhile return on investment.
• If there's less demand for homes in your area. “If there is low inventory and high demand in your area, you’re going to be able to sell your home as is," says Elisha Lopez, a licensed broker with Ocala Realty World in Central Florida. "If there’s an excess of inventory, the seller needs to make any repairs needed to entice the competition and encourage buyers to put an offer in on their home.”
• If your home is unlivable in its current state, consider making the repairs or be prepared to accept an offer from an investor. "Unless you're in a hot second-home market, few people will have the means to live elsewhere if major improvements are going to displace them," says Sharlys Leszczuk, a real estate broker with Windermere West LLC.

If you do choose to make improvements before listing, "focus on necessary repairs and updates with the best return on investment," advises Joy Aumann of Luxury SoCal Realty. "Don’t over-improve for your neighborhood." 

In particular, says Aumann, "I would not advise spending money on cosmetic fixes like granite counters or bathroom tile before listing. Stick to general decluttering, neutral paint colors, and essential repairs. Updates rarely match every buyer’s taste, anyway."

Blackburn recommends consulting with a real estate expert to understand your local market's demands and what repairs (if any) make sense for you.

Factors that affect your sale price

Your home's condition 

As a general rule, buyers will factor in the repairs they'd have to make themselves when calculating their offers, so the better shape your house is in, the higher the offer. 

If your home needs major work to make it livable, your buyer pool will likely be limited to cash buyers, such as investors. These bargain hunters typically offer 70% or less of your home's potential worth. 

When considering whether to sell as is, here's a good question to ask yourself, advises realtor Sharlys Leszczuk: "Would the improvements require the buyer to make alternative living arrangements once the transaction closes, or are they improvements that they could make while living in the home?" 

Not only can the prospect of having to live elsewhere deter buyers from making an offer, says Leszczuk, it can also affect their ability to get a mortgage to purchase the house — since lenders might consider the purchase too risky. 

How your home compares to other properties in the area

A desirable location may offset some of your losses — especially if you're in an area where a lot of revitalization is happening, leveling up a buyer's chances of seeing the home value appreciate.

"It’s important to evaluate the competition and see what has sold in your area to get a feel for what the buyers are looking for," advises Suzanne Seini, CEO and Owner of Innovate Realty in Irvine, CA. 

“If investors and buyers are looking for a home in a certain neighborhood, they might be willing to pay top dollar no matter what the condition of the house is,“ says Seini. "But if you see homes selling in your neighborhood for a high premium that look new and updated, it may be a good idea to upgrade your house to the same level." 

How strong the local housing market is

"In a seller's market with low inventory like we have now, you may be able to sell as is and still get a good offer," says Joy Aumann, who sells luxury real estate in Southern California. 

As an example, Aumann recalls a recent client who was able to sell their home as is, even while needing a new roof and plumbing repairs. "The home sold for only $30,000 under list price…they were thrilled," recalls Aumann. 

However, Aumann notes that less competitive markets may yield a different outcome. "In a balanced or buyer’s market, it’s usually best to make repairs if you can afford it," the realtor says. "Freshening up the home with paint, new floors, and fixtures can yield a much higher sale price that covers your costs."

Who buys your house

Traditional buyers

The average buyer typically isn’t looking for a home that needs repairs. However, one in three home buyers would consider purchasing a fixer-upper if they got a great deal.[2]

If you're in a desirable area, you may be in an especially good position to attract a traditional buyer looking for a bargain. 

For example, realtor Cynthia Cummins recalls helping a longtime homeowner sell her residence in order to downsize and move into assisted living: 

"There was a lot of deferred maintenance in the home, but it was a legacy property located in one of the most prime neighborhoods in San Francisco. The target audience was likely to be a monied end user who would take on a significant project and end up with an up-to-the-minute dream house."

After putting approximately $75,000 into repairs, staging, and minor cosmetic improvements, the house ended up selling for $500,000 more than the "as is" price other realtors had quoted.

"Luckily the seller had the funds to do that work and it was an excellent return on investment!" says Cummins.

Investors

Generally, homes with serious issues are more likely to attract private investors and companies that buy houses for cash. These buyers offer a quick sale, but they often pay 70% or less of the home’s after repair value (ARV. Investors will also subtract their estimated repair costs from the offer.

Some investors may be willing to offer as much as 85% of your home market value if the location and profit potential are right. That's why it's important to compare multiple offers before selling your home to a cash buyer. 

iBuyers

iBuyers like Opendoor may pay even closer to fair market value for your home. However, the company is  currently only available in about 50 major metros. It also has stricter purchase criteria than other kinds of investors. iBuyers generally prefer homes in relatively good condition that can resell quickly without needing to invest  a lot of money into repairs.

Is selling your house as is worth it?

"Selling a home as is makes the most sense when the cost of repairs would exceed the added value they would bring or when the home needs such extensive work that buyers would be unlikely to see past it," explains Ryan Nelson of Rental Real Estate. 

However, you should be prepared to sell your home for a lower price than if you fixed it up before listing. With an as-is sale, says Nelson, "you'll typically attract cash investors or house flippers as buyers rather than traditional home buyers. So you stand to lose thousands compared to fixing issues first."

If you're curious what your home could sell for as is vs. with improvements, Clever Real Estate may be a good place to start. With Clever Offers, you can compare fair cash offers from a variety of local and national investors to the sale price you'd get with an agent — for no added fees or commissions.

That way, you can get a fair understanding of your home's before and after repair value, talk to a realtor about estimated repair costs, and decide whether the cost of making improvements outweighs the potential loss of selling as is. 

Comparing options is completely free, and there's no obligation to move forward with an offer or listing.

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