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The Pros and Cons of Buying a House As-Is

Dusty Rhodes • September 2, 2024

If it’s your first time buying a home, you may expect it to be move-in ready on day one. However, not all homes are at their best when the paperwork is signed. If you’re looking at home listings for properties that are being sold “as-is”, there’s a strong chance that they may need repairs or renovations. 


What Does It Mean When a House is Sold As-Is? 


When a house is sold as-is, it typically means that it is being sold in its current condition. The seller won’t make any improvements, repairs or changes. It’s not uncommon for homes that are sold as-is to need significant renovations or repairs. Frequently, homes that need to be torn down are sold as-is. 


Reasons to Purchase a House As-Is 

  • Low list price: An as-is home is often listed below market value because of its condition. It’s generally safe to assume that the seller and buyer both know that the home will require significant updates or repairs. 
  • Desirable land or location: Some people buy an as-is home for the land it sits on. This type of sale can be particularly interesting to buyers who want to tear down a house and build their dream home in a specific area. 
  • Fast sale: In some cases, a seller may want to get rid of their home quickly. As-is sales typically involve less negotiation between the buyer and the seller, leading to a quicker transaction. 
  • Less competition: Because an as-is home may require significant expenses after purchase, there could be less competition from other buyers who lack the funds to repair, upgrade, tear down or flip an as-is home. 
  • Extra funds to renovate: Since as-is homes often come with a lower price tag, you may have the funds to update and personalize a property to your exact specifications. 
  • Investment opportunities: Real estate investors may seek an as-is sale as an opportunity to renovate and flip a home for profit. There’s a similar appeal for investors who want a rental property, since they can control the cost of updates and repairs. 


Potential Drawbacks of Buying a House As-Is 

  • Renovation expenses: A home sold as-is may require costly repairs. This could include addressing concerns like a leaking roof, mold or structural issues. The home’s plumbing, electrical and HVAC systems could also require repair or replacement. 
  • Possible health hazards: A home that’s in rough condition could have health risks, including pest infestations and the presence of asbestos or lead paint. It’s wise to get the home professionally inspected for these issues prior to purchase and take the necessary precautions when repairs begin. 
  • Hidden expenses: Even with a home inspection, there could be hidden issues. Corroded pipes, rotten wood or foundation issues could lead to a costlier renovation than expected. 
  • Inflexible sellers: Sellers of as-is homes often want to avoid negotiation. They are also less likely to accept an offer that gives the buyer an opportunity to cancel the home sale and recover their earnest money deposit. For example, a contingent offer that requires a successful home inspection may be viewed as unfavorable by the seller. 


Financing a Home that’s Sold As-Is 


There are fewer mortgage options for buyers who want to finance the purchase of an as-is home. This is especially true with Federal Housing Administration (FHA) loans, where the Department of Housing and Urban Development has minimum property requirements that must be met. 


Some conventional loans also require a lender-issued home inspection to secure a mortgage. If the results of such an inspection give the lender pause, repairs will need to be made before the sale can move forward.   


These conditions may be a barrier for many homebuyers. Still, Michael C. Weiner, a real estate agent with Coldwell Banker Warburg, says that securing a home loan on an as-is property is not more difficult if the buyer is in good financial standing and does not overpay. 


“First, a bank has to want to loan a buyer money (thus, strong financials), and then the property needs to be appraised for the purchase price or more for the collateral against the loan,” says Weiner. “Before submitting the offer, a buyer should have a pretty good sense of what the property is worth and what it will cost to make changes – because once the sale is complete, it’s all on the buyer.”


Tips for Buying Real Estate As-Is 


“As-is doesn’t necessarily mean that the property has issues,” says David Harris, a real estate agent with Coldwell Banker Warburg. “It means that the seller isn’t making any upgrades or improvements.” Harris offers the following tips for buyers who want to purchase a home that’s sold as-is.


1. Have a Property Inspection 


You may already be anticipating expensive repairs when you buy a home as-is, but you should still get it inspected. “While it does incur a cost, spending the money brings peace of mind,” says Harris. “Even if you are okay with performing minor upgrades or if you expect to make improvements, having an inspection can help assess the scope of work to be done as well as inform whether or not larger issues are present.”


2. Ask Lots of Questions 


As a buyer, it’s crucial to learn as much as you can about the property. “This is one of the most important financial transactions some will ever make,” says Harris. “Ask when the last time any work was done to the electrical or the roof. Ask if there were ever any leaks or water damage.”


3. See the Property on a Rainy Day 


The effects of a rainshower can tell you a lot about potential issues with the home. Harris notes that, “The best time to see if there are any roof issues or leaks in the basement due to foundation or plumbing issues is to see the property when it’s raining.”


4. Review Financials on Investment Properties


“If it’s an investment property that’s currently being rented, ask to see the rent roll and operating expenses,” says Harris. “Find out if the tenants are paying rent on time.” If the property is vacant, your real estate agent should run comps for similar rentals in the area. Harris advises buyers to “See what types of rental properties are in demand in that particular neighborhood.”


Additional Considerations: Buying a House As-Is


The buyer is generally assuming more risk and less opportunity for negotiation when buying a house as-is. Still, a home inspection and the disclosure regulations in your area should provide a clearer picture of the home that you plan to purchase. In some cases, these findings may provide an opportunity to renegotiate the purchase price. 


Negotiating an As-Is Purchase


When a home is listed “as-is,” the seller is often less likely to negotiate. However, you don’t want to pay more than the home is worth, especially if you had the house inspected and found major problems. An experienced real estate agent can help you navigate the process, and you can always ask the seller to adjust the purchase price if they refuse to make repairs themselves. 


Seller Disclosures Are Almost Always Required 


In most states you will be entitled to a Seller’s Disclosure when you purchase a home. This legal document is also known as a property disclosure, and it requires the seller to provide information about the property to the best of their ability. This includes undisclosed details about the home that may give buyers pause, and it helps protect the seller from potential lawsuits after the sale.


The Seller’s Disclosure is typically part of the closing process. The information that it contains will vary depending on the disclosure laws where house is being sold, but most property disclosures typically include:

  • Appliances that convey with the sale.
  • A checklist of known issues that the seller must confirm, if they exist.
  • Questions that the seller must answer about the property.
  • The opportunity to provide further information about issues specified in the disclosure.
  • The opportunity to disclose information that is not specified in the document. 


Consider a Home Warranty 


A home warranty will not cover preexisting conditions or known issues when you purchase a home, but it may provide some peace of mind if you’re concerned about unexpected repairs. 


In general, buying a home warranty will offer some protection for your home’s fully functional appliances, as well as the plumbing and electrical systems if they are in good working order. 


Assemble the Right Team to Buy a Home As-Is


Purchasing a home that requires extensive renovations is a complex process, and you’ll benefit from the expertise of an experienced real estate agent, attorney and contractor. In some instances, you may also need an architect to help you understand the scope of your project. 


“Your attorney will be able to search for several potential problems, such as open jobs filed with the city for renovations that were not closed, which can be costly,” says Dan Ragone, real estate agent with Coldwell Banker Warburg. “Invite your contractor and architect to visit the property and get estimates on what it would cost to make the property livable for you and consider this cost in the asking price to make sure you’re getting the best deal.” 


In a best-case scenario, Ragone suggests making an all-cash offer or getting a mortgage pre-approval in case there are multiple bids on the property. 


Should You Buy a House That’s Sold As-Is? 


If you have the budget and the vision, an as-is property can be the humble beginnings of your fully renovated dream home. However, it could also be challenging if you’re not prepared for the time and effort that a fixer upper will require. 


Be prepared to ask plenty of questions during the buying process, ensure that you have the budget to renovate, and seek out an experienced real estate agent to help you negotiate the deal.

Source: Homes.com



Dusty Rhodes Properties is the Best Realtor in Myrtle Beach! We do everything in our power to help you find the home of your dreams. With experience, expertise, and passion, we are the perfect partner for you in Myrtle Beach, South Carolina. We love what we do and it shows. With more than 22 years of experience in the field, we know our industry like the back of our hands. There’s no challenge too big or too small, and we dedicate our utmost energy to every project we take on. We search thousands of the active and new listings from Aynor, Carolina Forest, Conway, Garden City Beach, Longs, Loris, Murrells Inlet, Myrtle Beach, North Myrtle Beach, Pawleys Island, and Surfside Beach real estate listings to find the hottest deals just for you!

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The Secret To Selling This Spring: Start the Prep Work Now

By Dusty Rhodes • February 17, 2025
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41 housing markets where inventory just tipped in favor of buyers

By Dusty Rhodes • February 10, 2025
Among the nation’s 200 largest housing markets, these 41 metro areas now have active inventory at or above 2019 pre-pandemic levels. While homebuyers and home sellers still see headlines about the housing market being a seller’s market and national home prices reaching all-time highs, a deeper look reveals that several regional housing markets have shifted, giving homebuyers some power. During the pandemic housing boom, from summer 2020 to spring 2022, the number of active homes for sale in most housing markets plummeted as homebuyer demand quickly absorbed almost everything that came up for sale. Fast-forward to the current housing market, and the places where active inventory has rebounded to 2019 levels (due to strained affordability suppressing buyer demand) are now the very places where homebuyers hold the most power. At the end of January 2025, national active inventory for sale was still 25% below January 2019 levels. However, more and more regional markets are surpassing that threshold. Among the nation’s 200 largest metro area housing markets, 41 markets ended January 2025 with more active homes for sale than they had in pre-pandemic January 2019. These are the places where homebuyers will be able to find the most leverage or market balance in 2025.

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By Dusty Rhodes • February 3, 2025
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In some locations, rental prices can easily cover your mortgage payments. Depending on how much you have left on your mortgage or if you have a low mortgage rate, the rental income from your old house may cover the monthly payments, plus homeowners insurance and property taxes you pay. However, if you’ve recently purchased your house and are looking to rent it out, your mortgage payments may be too high for a lease to cover them. Take a look at houses that compare to yours with regard to size and location. This should give you a ballpark figure on what price your house can lease for. If you aren’t on a tight timeline to leave your current home, take notice of how quickly similar houses in the area take to lease. If rental properties stay empty for more than a few weeks, you may have trouble finding consistent tenants. A real estate agent can help match you with a tenant or give you an idea of your rental prospects. They can also give you insight into whether your location is desirable for tenants. For instance, if it’s near a university or larger employer, you may be able to rent to students or to employees who relocate for that large employer. However, if the house is far from the city center, or you’re located in a residential neighborhood, you may have trouble finding tenants. Do you need equity from your current home? Why are you leaving your old house? Are you purchasing a new home? If you’re planning to upgrade to a larger home, you may need the money from the sale of your old one to place a down payment on your new house. If you have enough equity in your current home, it may make more sense to sell the house instead of renting it. If you’re able to afford the down payment on your new home without selling your current one, usually about 20%, then renting out your old one makes sense. What is the market like in your area? The housing market isn’t consistent across the country, and even different parts of larger metro areas may be more or less robust. If the current market is slow and you think you can sell your home for a higher price in a few years, then it may make sense to rent the house until housing prices rise again. However, if it’s a sellers’ market and you can get the maximum selling price for your home, then selling it may be the better option. Keep in mind that houses that have been rental properties, often have a harder time selling afterward. You may have more wear and tear in the home if multiple tenants have lived there, which may mean spending more to prepare it to show and sell. An experienced real estate agent in your area can help you determine the top vales of your home and whether or not the current market can support that selling price. Agents who have been in the area long enough to become familiar with the housing market are in a good position to help you determine the best time to sell. Will you live in the house again? Consider whether you plan to live in the house or the area again. You may be in a situation that requires temporary relocation, and you plan to return to the original home in a few years. Having a good tenant to live in the house can ensure that your home stays in good condition instead of sitting empty. You’ll also have income from the rental property and building equity in the old home and your new one. Do you have the time and money to be a landlord? For those who are new to investing in rental properties, it may seem easy to rent out their current home and enjoy passive income while paying down their mortgage. However, if this is your first time being a landlord, you may find leasing your property yourself challenging. First, landlords are responsible for making major repairs to the house. 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However, if you’re planning to build a portfolio of rental properties, then having one company manage them may be a better option. Property managers can help ensure that your house or houses stay full, including working with local agents, having open houses for prospective tenants, and quickly running background and credit checks for those applying for a lease. As a passive landlord in this situation, you’re able to free yourself of the obligation for emergency repairs and the time searching for people to live in your rental property. Consider rent-to-own Another option when you’re considering whether to sell or rent your house is to engage in a rent-to-own agreement. In these situations, the tenant will place a down payment on the house and make lease payments to you for a specified period. After the lease is up, then the tenant has the option to purchase the home. During the time they’re making lease payments, a portion of those payments will go toward the final price of the house. This option may work for you if the housing market in your area is stagnant, allowing you to cover the mortgage without entering into a long-term obligation to a rental property. These rent-to-own options can be beneficial for tenants, too, as their financial situation may improve enough over time that they’re able to obtain a mortgage. What makes a house a good rental property investment? Does your house have the potential to be a good income property? There are a few things to consider before listing your house for rent. You may have to make some minor repairs and upgrades to your property to attract good tenants who will take care of the house and pay on time. Fresh paint and carpet are usually a must and are required in some areas. The location of your investment property is one of the most important things in determining whether you’ll have steady tenants or be responsible for covering the mortgage out of pocket if the house sits empty. 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