Selling a home as-is; is it worth it?
Because I deal with a lot of downsizing and estate-type sales, I come across sellers that want to sell as-is; without warranties on the home. And that's fine & does add some protection for the homeowners. But as a real estate professional, what does that mean to buyers? As I just watched a home sit for months then sell, I thought this was a good time to share lessons I've learned over time. Skip to the end if you want to hear the story of how this particular lost $150,000 or so with an as-is sale!
1. First and foremost an as-is home DOES NOT SELL FOR THE SAME PRICE as other homes. If there's only one take-away for a reader that is the one I want to emphasize, which is why it's all caps, underlined, italic and bold. If you want to sell for what other comparable homes sell for you need to make the home similar to other homes.
2. Selling as-is does not remove the obligation for disclosing latent defects - and is not a totally buyer beware situation. A latent defect is one that has been covered up by the seller or a defect that would affect safety of the home and would not be discoverable with a routine, non-invasive home inspection.
3. Selling as-is does not remove the obligation of the seller to fix something (like an appliance) if it breaks between the sale & closing. In the standard agreement of purchase and sale, all buildings on the property and all other things being purchased shall be and remain until completion at the risk of Seller. So, if it worked at the time of the agreement, it still has to work. If it was broken, it can stay that way.
4. Selling as-is does not mean a buyer won't ask for a home inspection as one of their offer terms.
5. Selling as-is is good for estate properties where a POA or trustee does not have the information on the home's systems, condition or chattels because they have not lived in the house. Again, the trustee & POA's need to understand #1.
6. Buyers do not pay more for potential. They actually pay less - often they not only inflate renovation costs, but they add a 'hassle' tax.
A Cautionary Tale: How Overestimating Value Cost One Seller $150,000+
Houses requiring significant updates—or those with unpermitted work—can be challenging to price accurately. When sellers reject market reality, the financial consequences can be severe.
Recently, I worked with some sellers where similar homes that were well-maintained or updated routinely sold around $1.2M. However, these owners suffered from the endowment effect: they placed high monetary value on their personal emotional attachment to the house and neighborhood, assuming buyers would pay extra for features, street & neighbourhood they personally loved.
In reality, the home’s layout & style was unpopular with buyers, general maintenance had been deferred, and it had an outdated heating system that required expensive upgrades before any interior cosmetic renovations could even begin.
To maximize interest, we launched a full marketing campaign—complete with professional staging, video, and open houses—pricing strategically to set an offer date. At the end of the week, we received two strong offers, including a firm offer well over asking with a favorable closing date.
The sellers refused both offers.
Months later, the home was re-listed with another agent. It sat on the market for over six months before finally selling for $125,000 less than the initial firm offer they had turned down. When factoring in six additional months of property taxes, utilities, carrying costs, and maintenance, the owners lost more than $150,000.
Key Takeaways Before You List
How often have you wondered whether a buyer will love your home’s unique quirks as much as you do? What if assuming they will ends up costing you thousands? Before bringing an as-is home to market, consider these three questions:
- Is my home genuinely comparable to recent top-dollar sales in the neighborhood?
- What specific features or mechanical upgrades are buyers discounting for in today's market?
- How much will taking on these repairs cost a buyer in time and money?
Proper pricing and clear expectations from day one are what ultimately protect your equity. If you are preparing to downsize or manage an estate property in Toronto, having an objective assessment of value makes all the difference.
