‘As Is’ : ‘Be Careful’ Is Best Advice to Both Buyer and Seller of an ‘As Is’ House : ADVICE TO SELLER : Needed: Willing Agent

The little frame house was in terrible condition. But after its 80-year-old owner contracted Alzheimer’s disease--and had to move to another state to live with relatives--her grown daughter needed to sell the place quickly.

The daughter had neither the time nor money to rectify years of neglect at the house. So she priced it at a discount--and sold it “as is” within just a few weeks.

“We had 15 or 20 people waiting in line for the house. They knew it was a bargain,” says Gini Pielke, the agent who listed the home.

The house was priced $8,000 below comparable houses in good condition, and the buyers, a middle-aged couple handy with home repairs, could see the potential there.

Realty agents generally caution against selling a house in poor condition, because the seller usually must take a big hit on price by selling “as is.”

Cosmetic improvements, particularly cleaning, painting and yard work, are among the most cost-effective changes a seller can make. And some repairs--such as replacing a leaky roof--must be done to satisfy the buyer’s mortgage lender.

Still, a crisis sometimes makes pre-sale improvements impossible. Perhaps there’s been a serious illness, or death, in the sellers’ household. Maybe there’s been a divorce or a job loss.

“Sometimes you just have to get your priorities straight and do what you have to do--even if that means selling ‘as is,’ ” Pielke says.

If you’re in that position, real estate specialists offer this advice:

--Find a willing agent to take your “as is” property.

Some agents feel a certain shame about listing a house in poor condition. Real estate is a cooperative enterprise and an agent knows his peers will see the property in conjunction with his name. So, some agents can’t be coaxed into taking a home that shows poorly--even if the flaws are merely cosmetic.

“We all want the ideal--to be proud of our listings,” says David McIlvaine, who sells homes through the ERA chain.

But an enterprising agent will see the marketing possibilities of an “as is” property that is well-priced. You need to find an agent who will put some energy behind your listing.

--Price your home at a discount.

Without a price break, your house will move slower than frozen molasses. Obviously, pricing will depend on the severity of your house’s problems. Heed your agent’s advice, but generally, figure on cutting about 10% off the price of comparable properties in good condition, says James Bateman, a Coldwell Banker agent.

--Get estimates on the cost of repairs.

Should the dishwasher be replaced? Then get information on the cost of a new one, including installation, and show that to would-be buyers. Ditto for the hardwood floors that should be refinished, or the carpet that should be replaced.

Potential buyers may be comforted by a rough estimate of expected improvements. “By doing that, you’ve taken away the unknown,” McIlvaine says.

--Target your marketing.

Is the house ideally located to serve as a rental unit once fixed up? Then ask your agent to direct advertising toward investors.

On the other hand, if the house is in a family-oriented neighborhood, target prospects might be first-time buyers willing to put in “sweat equity” to bring the home up to neighborhood standards. One way to appeal to first-time buyers: Have your agent prepare a flyer that suggests financing arrangements and that highlights the small monthly payments on your bargain-priced house.

--Use positive phrasing in ads.

“Calling your house a ‘handyman special’ gives it negative connotations--as if it is in total disarray,” McIlvaine says. Another phrase to avoid is “distress sale.”

Emphasize the positive with phrases such as “great opportunity,” “cosmetic repair only,” or “instant equity,” he says.

--Stress the bargain element with comparable sales.

Does your home offer the same square footage as a nearby house that is priced $20,000 higher? Is it a steal relative to another neighborhood property that lacks a family room?

Be as open in making these comparisons as MCI is with rival phone company AT&T.; Ask your agent for a list of comparable homes that are on the market or have recently sold, and attach the list to your marketing brochure, McIlvaine suggests.

“It’s to your advantage to show a significant benefit on price,” he says, “because many people identify immediately with a bargain.”