The View from South of the Potomac River: "As-Is" ... but at Market Price

"As-Is" ... but at Market Price

Market Rate "As-Is", What am I Missing?

 

I was setting up a tour of single family homes to take out some new buyer clients of mine tomorrow and I am seeing a lot of this in the Northern Virginia area, which goes something like this...  "Well maintained by owner for past 1-4 decades" or "Original owner with meticulous service history on property",(you get the drift on the verbiage in the MLS), but sold in "As-Is" condition.  My sincere question to anyone who can explain it so I understand, why sell a home in "As-Is" condition if it has been well maintained AND is being listed at market price? 

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Here in Northern Virginia, specifically Arlington County & Alexandria City, there is little to nothing below $300K for a fee simple property.  You can get a condo for that price, but then for the most part it is a matter of appliances and HVAC that can be covered by a home warranty.  Inventory has been very limited over the past 18-24 months, particularly at the lower price points, so is it attributable to an extreme sellers market?  I don't see where that is in play.

My first reaction to something that is being sold under this condition is that there should be some discount to the normal market price, since it doesn't provide for the normal request for repairs after a home inspection has been conducted.  Now just to show I am normal, I'm not talking about an estate sale where Aunt Hattie lived for the past 30 years and who knows how she maintained it, I am talking about owner occupied properties where there should be some actual knowledge about the property.

Do agents think and advise their clients that they will net more at settlement from this type of listing versus going through what I consider to be the normal process of a home inspection and then a potential negotiation on the results?  It may sound more convenient to the seller, but I can't wrap my head around why it works for the buyer, in the absence of an extremely rare property.  If a property is being listed at market price, shouldn't it be subject to normal market terms?

Please share your thoughts on either side and thank you in advance.

 

AJ Heidmann ~ CRS,  ABR

Cell 703-474-1260 ~ Office 703-717-6324 ~ Fax 703-839-8283

AJ@AJHeidmann.com

www.AJHeidmann.com

McEnearney Associates, Inc.

4720 Lee Highway, Arlington, VA  22207

Licensed in Virginia

Comment balloon 6 commentsAJ Heidmann ~ CRS • January 11 2014 09:12PM

Comments

Hey A.J.

I see those listings with 'as is' but they tend to be distressed properties.  I agree with you that well maintained properties should be subject to an inspection and request for repairs to be completed.

Best of GREAT success to you in 2014!

Posted by Jordon Wheeler, J W Group Real Estate Sales and Service (The Jordon Wheeler Group) over 6 years ago

AJ, my guess is they do it because they can in this market. What they fail to see is that an as-is always raises a red flag and buyers and their agents wonder what is wrong with the property.

If a property has been meticulously maintained, then why discourage inspections? Because they can.

Posted by Andrea Bedard, M.A.; REALTOR® Silver Spring, MD and beyond (Thompson Company, REALTORS®) over 6 years ago

AJ, "SOLD AS IS" is a hangover from distressed property days. IMO it may be seller knows there are minor things wrong but doesn't want to take the time or cost to repair and wants to get a certain net. Otherwise, like you say, why have it listed at market value but listed "as is"? If I were the listing agent, I woud not recommend an owner-occupied seller to advertise it that way. 

Posted by Pamela Seley, Residential Real Estate Agent serving SW RivCo CA (West Coast Realty Division) over 6 years ago

Jordan - I don't know if sellers think that it is a magical condition that allows them not to make repairs, but it raises doubts in a buyers mind

Andrea - Spot on!  I am assume that the inventory picture on your side of the Potomac is similar to mine, so what I was trying to get to is why do they think it is an advantage, as it does raise questions in the buyers mind.

Pamela - Penny wise and pound foolish is how I look at it... thanks for commenting.

Posted by AJ Heidmann ~ CRS, YOUR Alexandria & Arlington, VA Real Estate Expert (McEnearney Associates, Inc.) over 6 years ago

I see this and conclude that the seller has no funds to do any repairs and doesn't want the hassle. Many sellers are totally unreasonable with their net proceeds expectations   

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) over 6 years ago

Debbie - I understand what you are saying... but it isn't it the role of the listing agent to explain the potential consequences (obviously the seller makes the final decision)?  If the seller doesn't have the cash or want to deal with repairs, then price it for condition and sell "As-Is".  I guess I am just hoping for a wave of realism to flood the Northern VA market.

Posted by AJ Heidmann ~ CRS, YOUR Alexandria & Arlington, VA Real Estate Expert (McEnearney Associates, Inc.) over 6 years ago

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