Buying a Home “As Is”– 5 Things You Must Know
So you want a good deal, eh? You have watched your fill of HGTV and know your local Home Depot folks by name, and are ready to buy a “fixer”! Or, perhaps you are wanting a “move in ready” house but stumble on a great listing online and it looks perfect….but that silly verbiage in the MLS listing says “AS IS”. If you are like most buyers, this brings up disturbing thoughts of the 80′s movie “The Money Pit” and you think, “What’s wrong with it then”! Well, here are a few bullet points to know when this happens.
1. AS IS Does NOT ALWAYS Mean Something is Wrong With It
What the verbiage AS IS in a sales contract means is that the seller is telling you upfront that you are buying the home in it’s current condition and they will not make any repairs or improvements if requested. That’s it.
2. Your Inspection Is For Informational Purposes Only and Not to Request Repairs
You are still able to write an inspection period in the contract and make the sale contingent on you getting an inspection unless the seller specifically states you must waive inspection. Now, after you have your pretty inspection report with digital photos (if you used a savvy inspector) and are reading it, you now must determine if you still want to buy the house. You now know (if you used a good inspector) everything that is wrong with the house and needs repair once you move in. Is it what you were expecting? Is it more? Is it less? You get to decide based on this information if you want to go forward with your offer.
3. Buyers Should Do a Pre-Inspection Prior to Offering
Since the inspection is for informational purposes only, I highly recommend doing a pre-inspection prior to making your offer. If you are doing the work yourself, then go back to the property when you are determining an offer price and you can calculate all your estimated repair costs so that you have an offer price that makes good financial sense. If you are having a contractor do the work, have him/her look at it and give you estimates so you can make an offer with these costs factored in.
4. You can Still Back Out After Inspection if It’s a “Money Pit”
You don’t have to buy the home if the inspection turns up anything you don’t want to tackle. Plain and simple. As long as you tell the seller by the inspection objection period you are covered and will get your earnest money (deposit) back.
5. If you are a “Normal Seller…Never Ever use the word AS IS” in your Marketing!
Banks will always market their homes “As Is”, but if you are a private owner and are selling your house, don’t use this verbiage! It scares buyers. They start thinking you are hiding something. Don’t do it. Let them do their inspection, if you know of ANY problems you legally have to disclose them anyway, and then be reasonable when it comes to any problems uncovered at inspection that you didn’t know about.
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