Buying “as-is” is sometimes misunderstood

Maybe you are looking to buy a house or you want to sell one. You have heard of buying or selling “as is”. It just means that what you see is what you get and that the seller will not make nay repairs or changes.


It doesn’t mean that the buyer can not have an inspection. A complete home inspection is necessary and part of the home buying process. In the case of “as-is”, it is even more important.

Buyers have the right to know what they are purchasing as-is. Sellers will not make repairs but if the purchase is inspection contingent the buyer can cancel the purchase.

If buyer inspections are not allowed my advice is to pass on the house because it may need expensive repairs. Government entities and corporations sometimes sell houses and will not turn the utilities on so that the house can be inspected.

Selling “as-is” does not give the owner permission to deliberately hide property defects, nor does it protect them from lawsuits.

Corporations and government entities that sell real property do not always fully understand what “as-is” means and may prohibit inspections or hide material facts.

Several municipalities including St. Paul require truth in housing or tie of sale inspections. Selling as is does not mean that the house is exempt from such inspections.

In a general way, all houses are sold as-is. If the buyer has an inspection and the homeowner makes a repair the house is then sold “as-is”.

Expensive mistakes made by homeowners

It is possible to spend too much time and money selling a house. Sometimes sellers get carried away and spend money they won’t get back.

A complete remodel of the kitchen is a great example of spending too much money to sell a house. Homeowners who lower their asking price because the kitchen is dated end up with more money in their pockets because the immediate return on investment for a new kitchen isn’t 100% it is more like 75% depending upon the price range of the house and its location.

If the kitchen is damaged or unusable then it should be repaired or upgraded. Go ahead and replace twenty-year-old appliances with new appliances that are comparable.  It is important to keep it in character and the price range of the house.

Fresh paint, a new backsplash, and some new lighting cost a lot less than a new kitchen and the return can be more than 100% if the house is on the market for a shorter period of time and gets multiple offers because of it.

Even during the current seller’s market pricing is important. A lower price list price can mean a higher sale price as the home sells faster with more offers.

If the goal is to live in the house for the next several years then remodeling the kitchen makes sense but if the goal is to sell the house now for top dollar consider making smaller less expensive improvements.

When getting a house ready to sell start with cleaning and decluttering.

After that consider repainting rooms in lighter more neutral colors that will make rooms appear and cleaner. Replace the golds and yellows and jewel tones with shades of white, beige, and grey. Tough-up painted trim.

Make repairs where needed. In the eyes of a home buyer, needed repairs may look huge and expensive.

It is important to look at selling your house as a business transaction.  It can be hard to be detached which is one of the reasons why people hire real estate agents.

Sale prices higher than asking prices

One of the most common questions home buyers ask is how much should they offer when they find a house they want to buy.  Sometimes they ask if on average

spare change

local home sellers are getting more or less than the asking price.

Right now on average home sellers are getting about 4% more than the asking price of their St. Paul home. However, I strongly advise against using averages. If a house is already overpriced it doesn’t make sense to offer that much more than the asking price.

So far home buyers are willing to pay over the asking price and over the value of the house. Some are putting in extra cash when the appraisal is low and the loan amount isn’t enough to cover the price.

However, knowing that on average home sellers in St. Paul are getting more than the asking price does give buyer’s a feel for the housing marketing.

Highest mortgage interest rates in a decade

Mortgage rates went up to levels that we haven’t seen since 2009. It should be noted that 2009 was during a recession and housing market crash. Housing prices have more than doubled since then here in the Twin Cities and in other parts of the country. In the early 2000’s rates were at 6 and 7% but houses did not cost as much as they do today.

It is likely that the higher rates will cause homeowners to reconsider selling. It is too soon to tell if it will dampen buyer enthusiasm. Homebuyers are making offers and competing with one another to make the highest offer so that they can buy a house. . . at least as of this week.


Mortgage rate chart
Mortgage interest rates hit 5.11%


First time home buyers competing with baby boomers

First-time home buyers looking for smaller homes in St. Paul are often competing with older homebuyers who want to downsize. This has been the trend for the past few years.

The younger buyer sometimes has an advantage because they don’t have a house to sell and some older buyers have an advantage because they can pay cash.

The number of cash purchases is up. In 2021 about 30% of home purchases were cash which is up from 2020 when it was less than 25%.

There are also investors who can pay cash and the number of houses that are being bought by investors is rising.

The only upside to the situation is that when people downsize they often have a house to sell.

In the next 8 to 10 years we should start to see a shift in the housing market as more baby boomers reach their 80s and in twenty years there may even be more houses for sale than there are buyers.

The best way for buyers to navigate the housing market this spring is to be flexible and ready to act quickly. Take advantage of holiday weekends and stay in town and make an offer. Houses often go on the market on Thursday with offers due by Sunday.

The first can be the best offer

blue house

It is possible to get multiple offers on your home for the asking price or more and then lose all of the offers and have to start all over again.

The offers are lost after the buyer backs out or fails to get financing and the other offerers have moved on.

The second time around it almost always takes a lot longer and the second round of offers are not as good as the offers in the first round.

The first offer isn’t always the best but good or great offers should be taken seriously. They feature excellent financing approved for a qualified buyer and may also include a large downpayment and a convenient closing date.

I had on sale last year where the buyer allowed the seller to leave furniture and junk behind. The buyer also offered an amount over the asking price with no contingencies. The sellers accepted and did not wait for more offers.

It is also true that an offer in hand is worth a lot more than possible future offers.


Also see: All offers have to be presented