As you start your home search, you notice some properties are marketed for being sold as-is. What does this mean when buying real estate?
A home being sold as-is means the seller is unwilling to make repairs or offer credits for any issues with the property.
In some cases, the entire property is listed under as-is condition. Other times, the seller states a specific part of the home is as-is. Some common examples of specific as-is elements are fireplaces, pools, and a shed or garage.
With a typical transaction, a home inspection and appraisal will take place after signing a purchase agreement. Based on the report from the inspector, the buyers can go back into negotiation with requests for repairs or credits due to issues with the home. In some cases, there are conditions too severe, and the buyer may back out of the deal.
If a contract is signed for an ‘as-is’ property, the buyer must be willing to accept the home exactly as it is. If there are issues with the property, including structural damage, mold, or nonfunctioning systems, the seller is not responsible for fixing them.
Seller Disclosure + Home Inspection
Often, the seller lists a home as-is because it is in disrepair. While the seller is required to disclose all known issues, they may not be aware of every complication.
A home inspection is still a smart move when buying an as-is property. This will inform you of all the work that must be completed, and give you a sense of how much money you need to put into the home.
When to Buy As-Is
As-is properties can be appealing to the right buyer. These homes are often priced below market value, making it a deal for someone who loves refurbishing homes. In some cases, the buyer may be more interested in the land, and is willing to tear the existing structure down to build new.