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Maura Sullivan |
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Maura Sullivan ~ Your Northern Virginia Realtor
Woodbridge VA Real Estate - Prince William County Real Estate - Fredericksburg V
SELLING YOUR HOME ¿AS IS¿
By: Maura Sullivan
When you think about selling your home you have many things to consider. Does it show beautifully? If not, do you wish to put money into it to get it to show at its absolute best? Do you have the cash flow to do this?
An important fact to know is that most purchasers will want a ¿Home Inspection.¿ I, for one, would steer my clients away from writing an offer on a home without that contingency. It¿s for their protection. It¿s the home inspector¿s job to find things wrong with the home (that¿s what they¿re paid for.) They work for the buyer. There are very few homes that don¿t have items that need to be addressed in some fashion but you need to know what¿s ¿cosmetic¿ versus ¿a true home inspection item.¿
Once the home inspection has been completed, the purchaser¿s agent normally has 1-3 days to get the ¿summary¿ of the items that need attention written into an addendum and presented to the listing agent. The listing agent, in turn, presents this to the seller. They then have 1-3 days to return the addendum, with the resolution decided, back to the purchaser¿s agent.
If, say, there are 12 items on the addendum, the seller and the listing agent can determine what items the seller will address. You may find you don¿t want to address everything listed. Some of these issues may be cosmetic (carpets, paint, cracks in the driveway, wood rot, etc.) In this case, you scratch through and initial the items you will NOT address and then sign the addendum reflecting the ones that you will. Remember, too, that one item HAS to be addressed. That is smoke/heat detectors. It is required by law that smoke/heat detectors are on each level of the home and in normal working order.
The listing agent then faxes back to the buyer¿s agent the addendum and they then present that to the buyer¿s for review. When this occurs, you are in ¿counter¿ (meaning simply that the contract is not fully ratified and that you¿re still back and forth on the terms of the offer). The seller can still be receiving ¿back up¿ offers should other people be interested in writing an offer on the home. In the event the purchaser¿s want ALL the items addressed and refuse to sign the addendum, then their agent informs the listing agent and they inform the sellers. DETERMINE IF ANY OF THESE ISSUES ARE DEAL BREAKERS. The contract is not fully ratified until all parties sign and initial off on the offer!
Should the seller decide that they truly don¿t wish to either fix all the items the purchaser wants addressed or escrow the funds in at settlement to take care of these items, then that particular deal is over and either a ¿back up¿ offer is accepted OR the home gets put back on the market. The purchaser is entitled to get back their ¿EMD¿ (earnest money deposit.)
This entire process from beginning to end can take anywhere from 1-2 weeks depending on the time line written in the offer.
The way to get around this is to sell your home ¿AS IS.¿ Basically ¿what you see is what you get.¿ This requires striking through paragraph three of the sales contract and initialing off on paragraph ¿C¿ (under CLAUSES) of the Virginia Contingencies/Clauses Addendum of the sales contract. Paragraph three (Equipment, Maintenance and Condition) is where it is stated that: ¿The purchaser accepts the Property in the condition as of the Contract Date except as otherwise provided herein. The seller warrants that the existing appliances, heating, cooling, plumbing, electrical systems and equipment, and smoke and heat detectors (as required by Federal Law), will be in ¿normal working order¿ as of the possession date. The seller will deliver the Property in substantially the same condition as on the Contract Date and broom clean with all trash and debris removed.¿
If you strike through this paragraph you are truly selling your home ¿AS IS.¿
The purchaser can still have a home inspection but it will be for ¿informational purposes¿ only and any items found can not delay the settlement or cause the purchaser¿s to ¿back out¿ of the contract without them losing their earnest money deposit. The seller would be entitled to that money.
Paragraph C (CLAUSES) states: ¿AS IS¿ Property Condition: ¿The property is sold in it¿s ¿AS IS¿ physical condition, to be determined as of the (A) contract date, (B) the date of the home inspection, or (C) other (be sure to check the appropriate box.) It continues by saying ¿The seller makes no representation of warranty, express or implied, as to the condition of the Property or any equipment or system contained therein. All clauses in this contract pertaining to Property condition, termites or compliance with city, state, or county regulations are hereby deleted from this contract. The seller will have no obligation to make repairs to the electrical, plumbing, heating, air conditioning or any other mechanical system, equipment or fixture. Smoke detectors WILL BE INSTALLED required by the laws or regulations of the appropriate jurisdiction. ¿
Determine with your agent at the beginning how you wish to sell your home. Be sure you know your options and discuss in detail anything you know that might be wrong with your home. This will definitely determine how you proceed.
Expect to get less for your home by selling it this way. The CMA (comparative market analysis) your agent prepares for you will reflect the going price for homes in your subdivision/area that are similar in age, square footage and bedroom/bathroom totals to your own home. Many of these will show beautifully and will have had substantial upgrades, additions, amenities and features that your home does NOT offer. You can¿t compare apples to oranges.
Your agent should discuss in detail the monetary return to you if you fix up certain items that will get your home to show at it¿s best!
A good basis to determine a potential ¿appraised¿ value is to take your ¿assessed¿ value and multiply that by 33%. The assessed value of your home is always less than what its appraised value will be. You are taxed on the assessed value. The purchaser¿s lender sends out an appraiser to determine your appraised value. No lender will lend more money than what the home appraises for.
It is important to remember this when determining a sales price on your home!
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