Many houses are sold “as-is”, meaning that they're sold in their current condition. Indeed, most Residential Purchase Agreement forms have a pre-printed “as-is” clause stating, very clearly, that the property is sold without any warranty and in its present physical condition.
If you’re buying such a property, it’s in your best interest to conduct the necessary research and properly assess the house to ensure that you’re getting value for your money. This short guide can help.
What Does it Mean to Buy a Home “As-Is?”
The term “as-is” means that the seller is selling the home in its current condition, and will not make any repairs or improvements, or provide the buyer any credit to cover these expenses. Legally, an as-is clause also releases the seller from any future responsibilities or liabilities regarding the home’s condition.
Not All As-Is Properties are Lemons
One of the biggest misconceptions about as-is homes is that they are in severe disrepair. Not all as-is homes are lemons. Yes, the majority of them will need significant updates and repairs. However, others are great houses needing just a few smaller-scale fixes.
A homeowner, for example, can list a home for sale “as-is” because they inherited the property and don’t have the money to fix a few appliances. One foreclosure realtor, for instance, recently listed a home for sale “as-is” because it was missing a furnace and the bank was not going to foot the bill for the replacement!
It would have cost the buyer about $2,000 to install a new furnace. But since most home buyers are wary of as-is property sales, very few people even bothered to inquire about the property and thus missed out on an excellent opportunity.
What to Consider When Buying a Home As-Is
Going from the above discussion, it’s evident that you can still get a very good deal when buying a home as-is; you just need to be smart about it. The following considerations will come in handy;
Different sellers may choose to sell homes as-is for different reasons. As mentioned above, for example, the seller might not have funds to make the required repairs. Or, maybe the seller doesn’t want to go through the hassle of making repairs, perhaps for fear of making more issues. Finally, some owners might not know if the house has certain issues and may, therefore, choose to list the home as-is to avoid future legal battles with the eventual buyer.
Is an inspection clause allowed?
Ideally, you need an inspection when buying an as-is home. But, don’t expect the seller to be the one to discuss inspection with you. It’s the duty of the buyer to get a “conditional on inspection” clause in the purchase offer. A conditional inspection clause allows you to decide whether or not to buy the property based on the outcome of the inspection.
Do you accept the risk?
Once you understand why the home is listed “as-is” and have an inspection report, the final question you should ask yourself is whether you’re willing to take the risk. Are you prepared to do the repairs? Do you have the funds, resources, and time to make the necessary improvements? If the answer is yes, pursue the deal.
The Bottom Line Is – You Have Options
You can walk away from the deal or negotiate the final sale price. Additionally, the seller has a legal obligation to fully disclose what they know about the condition of the home. So, don’t be afraid. If you come across a home on sale as-is, and you’re interested in the property, feel free to check it out and ask questions.
The Michael Stoltzfus Group is located in Lancaster, PA and serves the Lancaster County and Central Pennsylvania area. We work diligently to help home buyers and sellers like yourself achieve their home goals. With extensive experience and knowledge of the area, the real estate team at Michael Stoltzfus Group will provide friendly and professional support for your entire real estate transaction.
Contact us online where one of our professional team members will respond via email or call us today at 717-380-3367.